Oyo, the budget hotel chain based in India, is close to securing a new investment of approximately $100 million to $125 million, which would mark its valuation down to $2.5 billion, according to two sources familiar with the matter who spoke to TechCrunch.

This represents a significant reduction from its peak valuation of $10 billion in 2019. Recently, the Gurgaon-based company has found it challenging to attract funds from institutional investors and has turned to pitching high-net-worth individuals.

A representative from InCred, a financial firm collaborating with Oyo, described the investment as highly sensible given its profitability and a substantial 70% discount from its previous valuation, with an anticipated listing in the next 18-24 months.

Last month, reports surfaced that Oyo was seeking funding at a valuation of $3 billion or less, claims which the company strongly refuted at the time. The ongoing fundraising efforts are expected to increase in size, say sources who wish to remain anonymous as the discussions are confidential.

Following the abandonment of its initial public offering plans last month, Oyo, supported by notable investors like SoftBank, Peak XV Ventures, Lightspeed, Airbnb, and Microsoft, has twice withdrawn its IPO filings with the Securities and Exchange Board of India over the past four years.

Initially, Oyo filed for an IPO in 2021, aiming to raise $1.2 billion at a $12 billion valuation, but later withdrew and refiled in 2023. The company, which has raised over $3 billion to date, has scaled back its international operations, although it continues to manage a digital platform that assists hoteliers with online bookings and payments.