OYO valuation drops to $8 billion ⁠— but it's the smallest drop compared to other major hotel chains

• The Hurun Global Unicorn Report 2020 values the hospitality unicorn at $8 billion as opposed to the last known market valuation of $10 billion.
• OYO’s valuation had soared to $10 billion in November 2019, when founder and CEO Ritesh Agarwal pumped in $2 billion into the company.
• With the drop in valuation, OYO will be the third most-valued Indian startup, after Paytm ($16 billion) and BYJU’s ($10.5 billion after its latest fundraise).

OYO’s valuation has dropped to $8 billion, according to the latest report by Hurun. The Hurun Global Unicorn Report 2020 values the hospitality unicorn at $8 billion as opposed to the last known market valuation of $10 billion.

However, other major hotel chains like Indian Hotels Co, Lemon Tree and Chalet Hotels to name a few have sharper fall in net worth compared to OYO, which even after this drop is the third biggest startup in India after Paytm ($16 billion) and Byju’s ($10.5 billion after its latest fundraise). OYO’s drop in valuation is a fair estimate when compared to the market beating its publicly listed competitors have seen.

OYO has not yet responded to the query sent by Business Insider. The article will be updated with the response from OYO.

According to Hurun, the fall in valuation has been marked in line with the AirBnB valuation markdown to factor the Covid19 impact on the hospitality business. “We took into account the post COVID scenario and we have adjusted the valuation of some of the businesses. Hospitality, it’s a no brainer, is one of the highly impacted sectors. AirBnB has downgraded its valuation and we have taken a conservative in-line approach of reducing the valuation in terms of the nearest comparable data,” said Hurun Report India MD and Chief Researcher Anas Rahman Junaid.

OYO’s valuation had soared to $10 billion in November 2019, when founder and CEO Ritesh Agarwal pumped in $2 billion into the company. With that move, Agarwal had nearly doubled the valuation of OYO.

However, the hospitality unicorn has been severely impacted due to the Covid19 pandemic. In a video message to its employees in April, founder Ritesh Agarwal said that he cannot imagine any other industry being worse impacted than travel, tourism and hospitality due to coronavirus. Earlier, Agarwal had estimated a 15-20% drop in revenues and occupancy over Covid-19. Later Agarwal had said that its revenues for March dropped by over 50%-60% globally.

While the market has gradually reopened and hotels have opened doors, it’s still going to take time before normalcy sets in as India continues to report high numbers of coronavirus cases.

SEE ALSO:

OYO’s Ritesh Agarwal joins the long list of founders who have turned investors

Byju’s is now a decacorn with the latest investment from Mary Meeker’s BOND