Microsoft Corp MSFT is in late-stage talks to pick a stake in SoftBank Group Corp SFTBY-backed Indian hotel aggregator chain Oyo Rooms that values the startup at $9 billion, TechCrunch reported on Thursday, citing a person familiar with the matter.
What Happened: The budget hotel aggregator, which allows users to book rooms via their phones or the web, has navigated through the pandemic with layoffs and losses, could announce a deal on Friday.
The deal may require Oyo, which is considering an initial public offering, to use Microsoft’s cloud services, the report noted.
Oyo’s $10 billion valuation in 2019 has been reduced to $3 billion in recent quarters. Earlier this month, Oyo said it had raised $660 million in debt.
Why It Matters: Oyo had been growing fast until the pandemic hit the startup’s business like a ‘cyclone,’ forcing it to lay off employees and curb expansion plans even as it battled toxic culture and lapse in governance and relationship with many hotel owners.
Microsoft has in the past made investments in Indian startups that include news aggregator and short-video platform DailyHunt, Walmart Inc WMT-owned e-commerce giant Flipkart, and logistics SaaS firm FarEye.
Price Action: Microsoft shares closed 0.1% higher at $286.50 on Thursday and were down 0.73% in extended hours.
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