SoftBank-supported Oyo cuts IPO target by 66% amid tech obstacles
Oyo, the SoftBank-backed hotel aggregator, has reduced its initial public offering (IPO) target by a significant 66%. This development comes in the wake of several technological obstacles faced by the company, causing investors to lose confidence.
Oyo had initially planned to raise $1.2 billion through its IPO, but it has now scaled back its expectations and is targeting a more modest $400 million. The IPO was initially planned for the latter half of 2021, but it has been delayed due to a variety of issues, including regulatory concerns and technical difficulties.
Oyo was founded in 2013 and quickly became one of the largest hotel aggregators in the world, with a presence in more than 80 countries. The company was backed by SoftBank, which poured billions of dollars into the company to fuel its rapid expansion. However, Oyo's growth has been accompanied by several controversies, including accusations of mismanagement, unethical business practices, and concerns over the safety and cleanliness of its hotels.
Despite these challenges, Oyo has continued to grow its business, with revenue increasing by more than 40% in 2021. However, the company has also faced significant technological hurdles, including problems with its reservation system, which has led to cancellations and delays for many of its customers.
The company has also faced challenges with its mobile app, which has been criticized for being slow and unreliable. Oyo has been working to address these issues, but they have continued to plague the company, leading to concerns among investors about the company's ability to deliver on its promises.
The decision to cut its IPO target is a significant blow to Oyo, which had hoped to use the funds to fuel its expansion into new markets and to continue to develop its technology platform. However, the company is still expected to go public in the coming months, and it will be interesting to see how the market reacts to its offering.
Investors will be closely watching to see how Oyo addresses the technological challenges that have plagued the company in recent months. If the company is able to successfully navigate these issues and continue to grow its business, it could be a strong contender in the highly competitive hospitality industry.
In conclusion, Oyo's decision to cut its IPO target by 66% is a significant setback for the company, which has faced several challenges in recent months. However, if the company can successfully address its technological issues and continue to grow its business, it could still emerge as a major player in the global hospitality industry.