Ritesh Agarwal, founder and group CEO of SoftBank-backed hospitality decacorn Oyo Hotels & Homes, has set up a new VC fund, Aroa Ventures, to back growth-stage businesses in the consumer, technology, and leisure infrastructure sectors.
Agarwal, who established Oyo in 2013 when he was 20 years old, has roped in Gaurav Gulati, a founding member and former COO of co-working startup Innov8, to head Aroa Ventures. Oyo had acquired Innov8 in March 2019 for USD 31 million.
Based in Singapore, Aroa Ventures will write checks ranging from USD 500,000 to USD 5 million to startups that churn out annual revenue between USD 1 million and USD 10 million with an annual growth rate of 20%.
“We believe that the long-term environment will always be favorable for making value-add investments in companies with proven unit economics and high potential to scale,” the company said on its website.
“Beyond capital, our team of serial entrepreneurs and experienced professionals work alongside portfolio companies to accelerate their growth and to deliver better risk-adjusted returns,” it added.
The development was first reported by local media Entrackr. The new fund is sponsored by RA Hospitality Holdings Co. Pte, an entity that Agarwal registered in Singapore last year, according to the regulatory filings.
Last year, Agarwal floated another investment vehicle with the same name RA Hospitality, which he registered in Cayman Islands. Through RA Hospitality, he bought Oyo’s shares worth USD 1.5 billion from its early backers – Sequoia Capital and Lightspeed Venture Partners. Furthermore, along with some of the senior Oyo executives, Agarwal also set up Raaga Partners LLP, an entity in which all the members pool in their individual angel investments to fund ventures.
This makes Aroa, the third investment platform that Agarwal has set up.
Agarwal has become the latest entrepreneur to float entities to invest in startups. Paytm founder Vijay Shekhar Sharma, along with his wife Mridula Parashar, had incorporated two new entities – VSS Investco and VSS Holdings in early February. According to regulatory filings, accessed by Entrackr, the objective of both the entities was to “carry on the business of an investment company and to invest in and acquire or hold securities, shares or debentures in one or more companies and to sell, purchase or otherwise deal in shares, stocks, and bonds.”
In September 2019, Snapdeal co-founders Kunal Bahl and Rohit Bansal also set up an investment vehicle called Titan Capital through which, they said, they would be making their future investments, by infusing money in the individual capacity. Similarly, Flipkart co-founder, Sachin Bansal had created an entity called BAC Acquisitions in December 2018 to fund ventures in the financial sector, and a year later he renamed it as Navi Technologies, while infusing USD 123 million in the investment vehicle.