Branded hotel rooms aggregator OYO Rooms has been taken to court for alleged non payment of fees of over Rs 1.5 crore to Mumbai-based Noesis Capital Advisors. According to Delhi High Court documents, Noesis filed a winding-up petition against Oravel Stays, the company that owns OYO Rooms, on April 26th this year. The development was first reported by the Economic Times.
A winding-up petition is filed to recover dues by forcing an insolvent company into compulsory liquidation. The petition said that OYO Rooms failed to to pay Rs 1,50,39,575 to Noesis.
MediaNama contacted OYO Rooms founder Ritesh Agarwal for a comment regarding the petition. We will update once we hear from them. However, an OYO spokesperson told the Economic Times said that the company had availed services of Noesis through an exclusive, noncompete contract.
The report added that half way through the term of the agreement, OYO found evidence that Noesis had breached the agreement and terminated their services. “We also sent them a legal notice to recover dues paid in good faith. That matter is presently sub-judice,” the spokesperson added.
Who is Noesis?: Noesis Capital Advisors is a hospitality focused research and advisory firm with operations in more than 60 cities of South Asia. The firm offers advisory services, entry strategy, site selection and negotiations, debt and equity finance for the hospitality sector.
It’s worth noting that earlier in year, OYO started international operations and forayed into Malaysia. At the time, Agarwal said that the company is looking to expand to other countries in South-East Asia, Africa and South America.
Funding: In August 2015, OYO Rooms raised $100 million in a funding round led by SoftBank group and participation from existing investors Greenoaks Capital, Sequoia Capital and Lightspeed India.
In March 2015, the company raised $20 million in a funding round led by Greenoaks Capital and other existing investors. In March 2014, Oravel had raised funding from DSG Consumer Partners, apart from Lightspeed Venture Partners. Oravel had raised its seed funding from angel investors which included Shravan Shroff, founder of Fame Cinemas, and Ravi Kiran, former CEO – South East & South Asia – Starcom MediaVest Group
For the financial year 2014-15, OYO Room posted a net loss of Rs 20.8 crore compared to the loss of Rs 56.25 lakh in the preceding year. Expenses shot up to Rs 32.04 crore compared to Rs 1.07 crore in the previous year. Revenues for 2014-15 stood at Rs 2.42 crore compared to Rs 50.75 lakh.