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Oyo's business model is looking a lot like WeWork's

SoftBank has much riding on Indian hotel company

| India
Oyo founder Ritesh Agarwal borrowed $2 billion backed by his Oyo shares then recycled the borrowed money in the form of $700 million of fresh equity. (Photo by Akira Kodaka)

The parallels between hotel chain unicorn Oyo and office-sharing unicorn WeWork -- whose value plunged from $47 billion to "a pretty high probability of being a zero," according to a veteran investor after seeing its IPO filing -- point to their common DNA and raise similar questions. SoftBank Group, directly and through its Vision Fund, is heavily invested in both.

Three symptoms stand out: first, a questionable business model; second, Oyo's numbers, and in particular its shockingly small revenue; and third, a heady valuation propped up by a financial maneuver previously used by SoftBank family members.

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