Ritesh Agarwal to invest $700M in Oyo’s new $1.5B financing round

India’s largest budget lodging startup Oyo Hotels and Homes said today it plans to raise about $1.5 billion as part of a new financing round as the startup looks to expand its footprints in the U.S. and Europe.

Ritesh Agarwal, the founder and CEO of Oyo, said he will invest $700 million in the startup’s new financing round — Series F — as he looks to buy more shares in the company, which has already become one of the largest hotel chains in Asia. Existing investors SoftBank Group, Lightspeed Venture Partners, Sequoia India will also participate in the round, which would value the six-year-old startup at $10 billion.

In a statement, the 25-year-old founder said the “continued support of our investors like SoftBank Vision Fund, Lightspeed, Sequoia Capital is a testament to the love, trust, and relentless support of our asset owners and customers.”

He added that the startup, which today operates in over 80 markets and manages over 1.2 million rooms, “can build a truly global brand out of India, while ensuring that the business is run efficiently and with a clear path to profitability.”

Oyo, which employs about 20,000 people, said it maintains a strong balance sheet of about $2 billion across different verticals, and plans to invest a significant part of it in the business. Agarwal said the startup is “operating profitably at the building level but at the same time our EBIDTA has also improved by 50%” over the last year.

Oyo, which entered China last year, claims to have 590,000 rooms there and presence in 332 cities. In the U.S., it has established presence in 21 states and 60 cities. In August, Oyo acquired the Hooters Casino Hotel Las Vegas in its first U.S. property purchase for about $135 million. In the same month, the company said it was investing $335 million in its rental business in Europe. In May, Oyo acquired Leisure Group for $415 million in a major Europe push.

Agarwal’s push to raise his stake in the company remains a bold and unheard of story for startups in India. In July this year, he said he was planning to spend $2 billion through an entity called RA Hospitality Holdings to raise his stake in the company from 10% to 30%. Early investors Lightspeed and Sequoia have agreed to sell part of their stake in the startup. Startup founders and investors cheered the move.

The $10 billion valuation makes Oyo one of the most valuable startup in India after financial services firm Paytm, and e-commerce giant Flipkart, which sold majority stake to Walmart last year for $16 billion. The growth of Oyo would also provide some comfort to SoftBank, which has seen some of its recent bets — in WeWork and Uber — deviate from the plan.

Prior to today’s announcement, Oyo had raised about $1.7 billion — $1 billion of which came from its last year’s financing round. Oyo today counts Airbnb as one of its investors.