New financials, old problems: OYO's battle of the Bulge

OYO’s latest audited financials show a company struggling both home and away. These numbers highlight the long and winding path to profitability OYO must walk

OYO is still far from positive unit economics in India and unlikely to get closer to profitability

Its 2019 financials make for dire reading—its net loss increased 7X

OYO's topline operating revenue number of $581 million and gross margin of 14.7% seem impressive, but are misleading

With nearly 75% of its losses stemming from its China business, OYO faces a tough road ahead

OYO is currently the most important startup in India, if not the world.

Hyperbole?

Maybe not.

For one thing, the budget hospitality startup is currently the great white hope for SoftBank and its $100 billion Vision Fund, the biggest and most influential VC in the world. If SoftBank’s “crown jewel” turns out to be a lump of coal, the fund can all but kiss its chances of raising the second Vision Fund—which is already struggling to get off the ground—goodbye.

For another, OYO is India’s second-largest startup in terms of valuation.

AUTHOR

Sumanth Raghavendra

Sumanth is a serial entrepreneur with more than eighteen years experience in running startups. He is currently the founder of Deck App Technologies, a Bangalore-based startup attempting to re-imagine productivity software for the Post-PC era. Sumanth’s columns appear regularly in leading publications. He holds MBA degrees from the Indian Institute of Management, Bangalore and Thunderbird, The American Graduate School of International Management, USA.

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