Oyo, once hailed as India’s second-most valuable startup with a staggering valuation of $10 billion, has seen its market worth dramatically decline to $2.4 billion in a recent Series G funding round. The Gurugram-based company, which operates a chain of budget hotels, raised $173.5 million from investors including Patient Capital, led by Oyo’s founder Ritesh Agarwal; InCred Wealth, which aggregates capital from high-net-worth individuals; and J&A Partners.

This latest valuation plunge is significant, as it now places Oyo’s worth below the total capital it has raised—approximately $3.3 billion in combined equity and debt financing, according to data insights platform Tracxn. The company’s valuation woes are not new; in 2022, SoftBank, which holds a substantial 40% stake in Oyo, internally reduced its valuation to $2.7 billion. At the time, Oyo dismissed the markdown as lacking a "rational basis."

This funding round and valuation cut come on the heels of Oyo’s decision to withdraw its draft red herring prospectus for an IPO earlier this year—the second time it has done so. Initially aiming to raise $1.2 billion at a $12 billion valuation when it filed for an IPO in 2021, the startup has faced repeated setbacks, with India’s market regulator, SEBI, yet to approve its application.

Oyo’s founder, Ritesh Agarwal, has previously invested heavily in the company, committing $1.5 billion in 2019 at its peak valuation. However, questions remain unanswered about the terms of that investment and its current status. The startup, embroiled in various controversies, has not commented on this recent funding round or its implications.

Oyo’s backers include prominent names such as SoftBank, Airbnb, Peak XV Partners, Microsoft, and Lightspeed Venture Partners, but the company’s trajectory appears increasingly uncertain amidst these ongoing financial challenges.