Microsoft in talks to back India’s Oyo

Indian budget hotel chain Oyo may have lost a lot of business amid the pandemic, but it is inching closer to finding a new investor: Microsoft.

Microsoft is in advanced stages of talks to invest in Oyo, according to two people with knowledge of the matter. The size of the investment and the valuation are unclear. Oyo was valued at about $10 billion in 2019, though as of earlier this year SoftBank, a major investor in Oyo, had slashed the Indian startup’s valuation to $3 billion.

The deal may also involve Oyo shifting to use Microsoft’s cloud services, one of the people said. Both the sources requested anonymity as the matter is private.

Microsoft and Oyo founder and chief executive Ritesh Agarwal declined to comment Thursday evening.

The Indian startup, which laid off thousands of employees globally earlier this year as nations across the world enforced lockdowns, still has about $780 to $800 million in its bank, Agarwal said at a recent virtual conference.

Earlier this month, and after Agarwal’s remarks at the aforementioned conference, Oyo said it had raised $660 million in debt. That debt was used to clear the previous debt, a third person familiar with the matter told TechCrunch.

This is a developing story. More to follow…