Recently, OYO rooms opened the doors to its first set of hotels in the Republic of China. The senior management including Ritesh Agarwal at OYO now set their alarm clocks to attend meetings based on China’s GMT +8 time zone.
To thrive in the world’s second-largest economy, an Indian consumer technology company will need a firm foundation, a loyal team, and a visionary founder. In the case of OYO, it’s Ritesh Agarwal.
Now, still only 26, Ritesh Agarwal is the second youngest self-made billionaire after Kylie Jenner. He wasn’t handed over OYO as an inheritance. He worked hard, backed his decisions, and influenced others to see his vision.
But where did all this start? Let’s trace Ritesh Agarwal’s life…
Early beginnings and germination of a Ritesh Agarwal’s IDEA
Ritesh Agarwal was born into a business family in Odisha. His growing-up and schooling days were fun. Computers fascinated him, and it wasn’t long before that fascination seeped into the software.
His brother’s programming books became his buddies, with Basic and Pascal already covered in the school curriculum. By the age of 8, he was already coding and wanted to pursue the same for his post-matriculation.
Somewhere in 2009, he was in Kota, studying engineering. The coding bug was still attached, but another hobby that got him hooked was writing.
Did you know? Ritesh Agarwal has inscribed a book called ‘Indian Engineering Colleges: A Complete Encyclopaedia of Top 100 Engineering Colleges’.
At Kota, traveling was a great time-killer. It allowed him time to think and relax. A trip to the Asian Science Camp at Mumbai fuelled the travel bug.
By the time 2011 came, he decided to skip his engineering college entrance exam and embarked on his entrepreneurial journey to Delhi. A brief enrolment at The University of London’s India campus also followed.
It is baffling to think that a 17-year old, with enough talent and engineering nous, could turn his back on a possibly successful career as an engineer.
United States (for which he also prepared for SAT for some time), a Tech company in Bangalore, or a high-paying corporate job awaited him.
Yet, here was Ritesh, devoting his time reading about entrepreneurs, businesses, startups, and that one big company – Airbnb.
It is uncertain if Airbnb was the ideal business model to follow, but it acted as a source of inspiration.
Travel had got him face-to-face with the ground reality of India’s budget hotels. The lack of basic amenities, customer service, and irregular pricing meant there was an opportunity here.
If only every single budget hotel could offer decent amenities to travelers. Can an Indian Airbnb be set up to make stay comfortable, accessible, and affordable?
This idea could have been the precursor to OYO.
Oravel and early STARTUP CHALLENGES
Ritesh started Oravel Stays! in 2012. It functioned as an aggregator for ‘bed and breakfast’ motels across India.
Early funding from accelerator firm, Venture Nursery (reportedly 30 lakhs), gave Ritesh the financial backing to cultivate his idea.
He presented this idea to the Thiel Fellowship, a global contest where ten students, below the age of 22, were awarded a sum of $100,000 for their business model.
To gain coverage, he attended conferences and events across India. This meant he checked into numerous B&B (bed & breakfast) motels. But this time, as the founder of an online aggregator, every check-in was a business opportunity.
Speaking about those experiences, Ritesh says,
“It helped as I got a pulse of what customers and hotel owners wanted. This also meant I didn’t need to work from an apartment.”
Oravel now had an idea and backing. But, similar to numerous early startups around the world, challenges beckoned. Perhaps, replicating the Airbnb model in India wasn’t getting the right coverage.
Ritesh Agarwal’s OYO is born and sees EARLY FUNDING
Ritesh identified what Oravel was lacking. What if he could provide affordable hotels for travelers but also create an online community to gather information. A traveler, then, would differentiate good hotels from the crappy ones, all thanks to user reviews and pictures.
By 2013, Ritesh relaunched Oravel as OYO Rooms. OYO means “On Your Own.” The goal was to expand into India’s largest chain of standardized budget rooms.
Funding from LightSpeed Venture Partners and DSG Consumer Partners, amounting to 14 Crores, helped launch OYO in metros, including Bangalore.
By 2014, OYO Rooms was operating in 73 cities across India.
Ritesh Agarwal’s core team and RAPID EXPANSION
OYO Rooms was on its way in becoming India’s largest chain hotels with no – gym, spa, or add-ons.
OYO’s team visited hotels to audit the hotel premises, standardizing its level of quality.
Bejul Somaia of LightSpeed saw this level of quality assurance in Ritesh during the funding days.
“Ritesh has a strong grip on all levers of business. He is well versed in minute details of property owners.”
OYO was now making a gross booking of up to 1 Crore per month.
The core team consisted of Maninder Gulati, Abhinav Sinha, Dinesh Ramamurthi, Kavikrut, Anuj Tejpal. All of them now hold respectable senior-level positions at OYO.
This tight-knit unit, combined with a visionary leader, took OYO’s operations to 350+ hotels and 4000 rooms by 2015.
The OYO Rooms app is downloaded more than 180,000 times, with close to 30,000 bookings coming from it.
Another round of funding by LightSpeed, Greenoaks, and Sequoia raised $25 Million. CB Insights for The New York Times has backed OYO Rooms to become the next startup unicorn.
When asked about the secret behind the success of OYO, Ritesh said, “The main reason is that our group always worked as a team. We may not be friends, but as a collective of qualified professionals, we make a larger impact.”
The recent bout of COVID-19 hasn’t deterred OYO. It raised $806.75 Million in Series F funding from Softbank Japan. OYO had raised $.1.5 Billion from Softbank in 2019.
Ritesh Agarwal’s accomplishments include being awarded the World’s Youngest CEO at 17, one of the Top 50 Entrepreneurs by TATA First Dot (2013), TiE-Lumis Entrepreneurial Excellence Award (2014), etc.
Ritesh Agarwal no longer lives in B&B hotels. He owns an apartment. Perhaps not as prestigious as his other achievements, but still one to note in this young entrepreneur’s stellar life.