IPO-bound hospitality unicorn OYO reported a 34% decrease in its net loss to INR 1,286.5 Cr in the financial year 2022-23 (FY23) from INR 1,941.5 Cr, as expenses declined marginally despite growth in business.
The SoftBank-backed startup’s operating revenue grew 14% to INR 5,463.9 Cr in FY23 from INR 4,781.3 Cr in the previous fiscal year. It mainly earns revenue from sales of accommodation services, commission from bookings, and subscriptions.
Including other income, total revenue also jumped 14% to INR 5,601.7 Cr from INR 4,904.7 Cr in FY22.
Founded in 2012 by Ritesh Agarwal, OYO offers holiday homes, casino hotels, coworking spaces, budget hotels, corporate stays and more.
Where Did OYO Spend?
The startup, last valued at around $9 Bn, managed to reduce its expenses during the year under review despite the growth in its business. Total expenditure fell 3% to INR 6,799.6 Cr from INR 6,985.3 Cr in the previous fiscal year.
Employee Benefit Expenses Fall: The hospitality unicorn spent INR 1,548 Cr on employee benefit expenses in FY23, a decline of 17% from INR 1,861.7 Cr a year ago. It must be noted that OYO laid off around 600 employees during FY23 as part of a restructuring exercise.
Lease-Related Costs Rise: OYO’s lease-related costs, which include service component of lease and lease rentals, rose 10% to INR 2,843 Cr in FY23 from INR 2,578 in the previous year.
Advertising Expenses Decline: OYO’s marketing expenses narrowed 17% INR 154.8 Cr in FY23 from narrowed its INR 1,861.7 Cr in FY22.
OYO, which entered the unicorn club in 2018, has raised over $3 Bn in funding till date. It counts the likes of Microsoft, Airbnb, Peak XV Partners among its investors
As per an internal mail accessed by Inc42, OYO was on track to report its first ever profitable quarter in the second quarter of FY24, with a projected profit of INR 16 Cr. Earlier, the startup told its employees that it posted an adjusted EBITDA of about INR 175 Cr in Q1 FY24.
Currently, the startup is looking to raise $250 Mn from investors amid the delay in its initial public offering (IPO). A substantial portion of this funding will be allocated to settle its $660 Mn term loan B.
Earlier this year, the startup took the confidential route to pre-file its draft documents for its public offering and reduced its IPO size to INR 3,286 Cr–INR 4,929 Cr ($400 Mn – $600 Mn).
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