Oyo, the Indian startup known for its budget hotel aggregation services, is in advanced discussions to raise INR 1,000 crore (USD 120 million) in new funding. This initiative follows Oyo’s decision to withdraw its IPO application earlier this year.

Oyo is now focusing on securing investments from prominent family offices, which manage the wealth of affluent families. Among the potential investors are the family offices of Anand Jain, a former executive at Reliance, and the Juneja brothers, founders of Mankind Pharma. This move underscores the increasing role of family offices in funding Indian startups, particularly those exploring alternatives after facing public market challenges.

The new funding round values Oyo at USD 2.5 billion, significantly down from its peak valuation of USD 9 billion in 2021. This 72% reduction mirrors a broader correction in the startup valuation landscape, with many companies experiencing similar declines recently. Additionally, Oyo is nearing the final stages of negotiations with Malaysia’s sovereign wealth fund, Khazanah Nasional, for further investment, which could increase the total raised in this round.

Oyo has streamlined its operations to concentrate on core markets such as India, Europe, Malaysia, and Indonesia, while exiting less profitable regions like the US and China. The company has also implemented significant cost-cutting measures, including an 82% reduction in employee benefits and a 60% cut in marketing expenses. These efforts have improved Oyo’s financial health.