India Lodging Startup OYO Raises $1.5B Led By Founder, SoftBank

India-based hotel and booking startup OYO announced a $1.5 billion funding round led by founder Ritesh Agarwal, SoftBank’s Vision Fund, Lightspeed Venture Partners and Sequoia India, Bloomberg announced on Monday (Oct. 7).

Agarwal, who founded OYO in 2013, will triple his interest in the firm with a $700 million investment to buy new shares, bringing its valuation to $10 billion.

“We truly believe that we will be able to build a truly global brand out of India, while ensuring that the business is run efficiently and with a clear path to profitability,” Agarwal said in a statement to the media.

Japanese banks Mizuho Financial Group Inc. and Nomura Holdings Inc. are funding Agarwal’s share acquisition through RA Hospitality Holdings, sources told Bloomberg.

OYO offers 1.2 million rooms in 80 countries, including China, and more recently, in the U.S.

The unicorn ranks second among India’s startups, behind One97 Communications, the parent of digital payments pioneer Paytm.

Founder Agarwal, 25, launched the company six years ago after dropping out of college. The online service helps hotels improve and standardize in exchange for a percentage of rates charged, usually about 25 percent. After a makeover that includes rating rooms on 200 criteria, hotels get OYO signage and exposure.

In May, OYO acquired Leisure, a rental company based in Amsterdam, and rebranded it as OYO Vacation Homes.

OYO has around 23,000 hotels and around 125,000 vacation homes. The company said it has “doubled its growth” since it acquired Leisure.

There are 2.8 million people using the Leisure service throughout 118 countries every year. It has 115,000 homes throughout Europe and 300,000 around the world. The European vacation market is expected to be worth around $18.6 billion this year, with growth estimates of 4 to 8 percent per year.

OYO has also recently expanded into the co-working business, aiming to invest $300 million into U.S. expansion.