OYO May Not See Profits In China, India Until 2022

India-based OYO has filed a valuation report with India’s ministry of corporate affairs indicating that the company did not expect to turn a profit until 2022, Reuters reported on Monday (Nov. 25).

The losses were six times higher in 2019 through March compared to 2018, but its revenue more than quadrupled for the same time period. Losses were partially blamed on the company’s rapid expansion, but it was that growth into China, the U.S., the U.K. and other markets that positioned it among the world’s largest hospitality brands by room count.

Projections show OYO could report a net profit of $45.2 million in 2022. Forecasts show two-year growth could rocket to $586.9 million, almost 13 times higher.

“These are not the final audited financials, and the same will be issued later by the company along with the annual report that we issue every year,” OYO said in a statement. It added that the report was comprised of “certain provisional financials” for the year ending March 2019.

A valuer in Gurugram, OYO’s home base, told Reuters that figures through March 2019 were not yet audited and were provided by the company’s management.

In January through March 2019, OYO recorded a net loss of 23.85 billion rupees ($332 million). Last year’s loss was 3.6 billion rupees, the valuation report showed. Conversely, revenue went up to 64.57 billion rupees ($900 million) compared to roughly 14.13 billion rupees in 2018.

Founder and CEO Ritesh Agarwal launched OYO in 2013. It is now India’s largest hospitality company, reaching over 230 Indian cities. The company also has an international presence for budget accommodations, with hotels in Malaysia and Nepal.

SoftBank, a multinational conglomerate headquartered in Tokyo, backed OYO with $1 billion through its Vision Fund. This month, the investment group reported its first quarterly loss in 14 years, due in part to WeWork’s botched initial public offering and Uber’s losses.

OYO was most recently valued at $10 billion. Last month, the company announced a $1.5 billion funding round led by Agarwal and SoftBank, as well as Lightspeed Venture Partners and Sequoia India.

The unicorn ranks second among India’s startups, behind One97 Communications, the parent of digital payments pioneer Paytm.