Masayoshi Son’s favorite founder is tightening his grip.
Oyo, an Indian hotel startup backed largely by SoftBank, is getting a cash infusion from its own CEO, Ritesh Aggarwal. The company said Monday that Aggarwal’s $700 million investment got approval from Indian regulatory authorities, part of a $1.5 billion round that will value the company at $10 billion. The investment will increase Aggarwal’s stake in the company from 10% to 30%.
It’s a head-scratching transaction. According to Bloomberg, Aggarwal is buying shares from existing investors Sequoia and Lightspeed and getting financing from Japanese banks Mizuho Financial Group and Nomura. It’s a risky bet for the 25-year-old Aggarwal if he’s taking out hefty loans to finance his stock purchases. The company first announced Aggarwal’s intention to purchase more stock in July.
Oyo says the new cash will help pay for a further expansion in Europe and the U.S., which we first wrote about in February.