BENGALURU: Ritesh Agarwal, the founder of hospitality startup Oyo, has floated an early-stage venture capital fund called Aroa Ventures, which will focus on investments in growth-stage startups in the consumer, technology, and leisure infrastructure sectors.
The fund also includes Gaurav Gulati, co-founder, and ex- COO of Innov8 as co-owner. Oyo acquired co-working space provider Innov8 for $ 31 million in an all-cash deal in March 2019.
Aro Ventures will look to invest in new companies with annual revenues of between $ 500,000 to $1 million. The Venture Capital Fund indicates that the investment firm will have an average transaction size of between $1 million and $10 million.
Through this, Agarwal will join a growing number of founders who have become owner-investors such as Sachin Bansal, Kunal Bahl, Kunal Shah, and Vijay Shekhar Sharma who have launched separate portfolio entities to invest and pick-up equity in startups.
In July, the founder of Paytm Sharma formed two separate investment entities, VSS Holdings Pvt Ltd and VSS Investco Pvt Ltd, to invest directly in startups. Prior to this in September 2019, the co-founders of Snapdeal Kunal Bahl and Rohit Bansal also turned to angel investing through VC firm Titan Capital.
This development was first reported by the tech news portal Entrackr. According to the deposits reached by the publication, Aroa Ventures was registered in Singapore in 2019 with Agarwal and Thomas Hufnagel as shareholders of the entity. However, Agarwal owns 100% of Aroa Ventures.
" Beyond capital, our serial entrepreneurs and experienced professionals work alongside portfolio companies to accelerate their growth and deliver better risk-adjusted returns," Aroa Ventures website said.
The new Agarwal VC fund comes almost a year after the young founder increased his stake in Oyo by creating a new entity called RA Hospitality Holdings (Cayman). In July 2018, RA Hospitality received a signal from the Competition Commission (CCI) to merge with Oyo's parent entities.
In October of last year, Oyo raised $ 1.5 billion through RA Hospitality and Japan’s Softbank, part of the hospitality startup’s Series F funding round.
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