The valuation of Oyo, once India’s second-most valuable startup at $10 billion, has dipped to $2.4 billion in a new funding round, multiple sources told TechCrunch.

The Gurugram-headquartered startup, which operates a chain of budget hotels, has raised $173.5 million in a Series G funding. Patient Capital, run by Oyo founder and chief executive Ritesh Agarwal; InCred Wealth, which pools capital from high net-worth individuals, and J&A Partners delivered most of the capital in the new round.

Oyo’s current valuation has fallen below its total capital raised, which Tracxn, a data insight platform, reports as approximately $3.3 billion in combined equity and debt financing.

TechCrunch reported in May that Oyo was seeking to raise a funding round that could lower its valuation to $3 billion or lower. “We deny any rumors, including that of the valuation in the article,” a spokesperson for the budget hotel chain told TechCrunch in May. “There is no concrete transaction, let alone a valuation discussion at this stage.”

The startup, mired in a series of controversies, did not respond to a request for comment.

This isn’t the first time Oyo’s Agarwal has invested in the startup. He agreed to invest $1.5 billion in Oyo at a valuation of $10 billion in 2019. To date, Oyo hasn’t commented on how Agarwal secured that capital, at what terms, and what is its current status.

The new cut in valuation is hardly a surprise. SoftBank, which owns more than 40% of Oyo, internally cut the valuation of the Indian startup to $2.7 billion in 2022. Oyo said at the time that there was “no rational basis” for the markdown of its valuation.

Oyo counts SoftBank, Airbnb, Peak XV Partners, Microsoft and Lightspeed Venture Partners among its backers.

The new funding follows Oyo withdrawing its draft red herring prospectus for an initial public offering for the second time earlier this year. The Indian startup originally filed the paperwork to go public in 2021, seeking to raise about $1.2 billion at a valuation of $12 billion at the time.

India’s market regulator, SEBI, has never approved the startup’s application for an IPO.