Microsoft in talks to back India’s Oyo

Indian budget hotel chain Oyo may have lost a significant portion of its business amid the pandemic, but it is inching closer to finding a new investor: Microsoft.

Microsoft is in advanced stages of talks to invest in Oyo, according to two people with knowledge of the matter. The size of the investment and the valuation are unclear. Oyo was

valued at about $10 billion in 2019

, though SoftBank, a major investor in Oyo, had slashed the Indian startup’s valuation to $3 billion earlier this year.

The deal may also involve Oyo shifting to use Microsoft’s cloud services, one of the people said. Both the sources requested anonymity as the matter is private.

Microsoft and Oyo founder and chief executive Ritesh Agarwal declined to comment Thursday evening.

The Indian startup, which

laid off thousands of employees globally

earlier this year as nations across the world enforced lockdowns, still has between $780 to $800 million in its bank, Agarwal said at a recent virtual conference. (The startup had about $1 billion in bank

in December 2020.)

The pandemic hit the startup like a “cyclone,” he told Bloomberg TV earlier this month. “We built something for so many years and it took just 30 days for it drop by over 60%,” he said.

Earlier this month, and after Agarwal’s remarks at the aforementioned conference, Oyo said it had raised $660 million in debt. That debt was used to clear the previous debt, a third person familiar with the matter told TechCrunch.