Oyo hotels, a chain notoriously famous for many reasons including all the controversies, one cannot deny that it has indubitably disrupted the hospitality industry in India. Well, the popularity of Oyo hotels precedes its founder’s success, Ritesh Agrawal, who was only second to Kylie Jenner in the list of world’s youngest self-made billionaire in 2020. Oyo Hotels was founded by Ritesh Agarwal in 2013 at the age of 24. With a net worth of $1.1 billion, Agarwal’s journey from a humble background to the forefront of the hospitality industry is a testament to his unwavering determination and entrepreneurial spirit.
Oyo Hotels, a 2013 startup sponsored by SoftBank, has grown to be India’s largest hotel network and is now valued at $10 billion. Oyo has big goals to overtake all other hotel chains in the globe by 2023 as it grows into the US and Europe after overtaking the second-largest chain in China.
College dropout Ritesh Agarwal is the richest self-made Indian under 40. The co-founders of Zerodha, Nithin and Nikhil Kamath, are among India’s youngest self-made billionaires and are both in their 30s. Following them are Byjus’ Raveendran family ($1.4 billion) and the Bansals, who co-founded Flipkart ($1 billion apiece).
Early Life and Entrepreneurial Spirit
He embarked on his entrepreneurial journey by selling SIM cards at just 13 years old. Following his schooling at St. Johns Senior Secondary School in Kota, Rajasthan, Agarwal moved to Delhi to pursue further studies.
Hailing from a small shop in Odisha’s Rayagarh district, Ritesh Agarwal’s journey to success was far from conventional. His father, Ramesh Agarwal, dreamt of his son becoming an engineer, but Ritesh had other plans. In pursuit of his dreams, Ritesh relocated to Delhi during his 10th grade to prepare for the IIT-JEE entrance exam. It was during this time that he started selling SIM cards, not only to gain business acumen but also to support himself without relying on his family’s finances. Despite enrolling in an engineering college, Ritesh made the bold decision to drop out and embark on his entrepreneurial journey.
The Thiel Fellowship and the Birth of Oravel Stays
However, Agarwal’s thirst for entrepreneurship led him to drop out of college and pursue his vision. In 2013, at the age of 19, he was selected for the prestigious Thiel Fellowship, an initiative started by Peter Thiel. The fellowship provided Agarwal with a $100,000 grant to bring his ideas to life. Building on this opportunity, he launched a budget accommodation portal called Oravel Stays in September 2012, which marked the beginning of his journey towards disrupting the hospitality industry.
OYO Rooms: A Game-Changing Venture
In 2012, at the young age of 18, Ritesh Agarwal ventured into the business world with his first endeavor called Oravel Stays. The concept received a grant of Rs 30 lakh, and the following year, Agarwal secured the prestigious Thiel Fellowship, which provided him with a grant of $1 lakh. However, it was in 2013 that Agarwal’s vision truly came to life when he transformed Oravel Stays into Oyo Rooms, marking the beginning of a disruptive revolution in the hospitality industry.
The success of Oravel Stays paved the way for the birth of OYO Rooms in May 2013. This revolutionary hotel network quickly gained traction, offering affordable and standardized accommodations across India. Agarwal’s dedication and innovative strategies attracted significant funding, with the company raising $1 billion by September 2018. The visionary entrepreneur’s leadership enabled OYO Rooms to expand its presence to 154 cities in India, becoming the country’s largest hotel network.
Global Expansion and Unicorn Status
The success story of OYO Rooms extended beyond India’s borders. In 2016, Agarwal achieved a milestone as the hotel chain hit the one-million check-ins mark and expanded its operations to Malaysia. The following year, OYO Rooms launched in Nepal, solidifying its presence in South Asia. In 2018, the company established operations in the UK, UAE, Dubai, China, Singapore, and Indonesia, propelling it to unicorn status. By 2019, OYO Rooms had gained more than 330,000 rooms in 500 cities globally, showcasing Agarwal’s remarkable ability to lead and expand his empire.
Net Worth and Accolades
As a testament to his success, Ritesh Agarwal’s net worth in 2020 was estimated to be approximately $1.1 billion (Rs 7253 crore). This made him the youngest self-made billionaire globally, as recognized by the Hurun Rich List. Agarwal’s achievements did not go unnoticed, as he was featured in Forbes’ 30 under 30 list for Asia, solidifying his status as a prominent young entrepreneur.
Challenges and Controversies
Agarwal’s journey to success has not been without its fair share of challenges and controversies. OYO Rooms faced backlash from hotel owners in India who alleged that the company took a significant portion of their revenues through undisclosed fees. Additionally, accusations of fraud and allegations of cheating by OYO’s co-founder tarnished Agarwal’s reputation. OYO also faced legal action and fines in the United States for operating without proper registration.
Personal life
Only 3 days after his marriage with Getansha Sood, Agrawal’s father’s demise was a big shock.
Moving Forward
Oyo, the hospitality and travel tech startup led by Ritesh Agarwal, has achieved a significant milestone by turning cash flow positive in the fourth quarter of the financial year 2023. According to a presentation shared with employees, the company ended Q4FY23 with a surplus of Rs 90 crore in cash flow, indicating a positive financial trajectory. This achievement positions Oyo on track to achieve its goal of recording its first profitable year since its establishment in 2013, with an estimated adjusted EBITDA of approximately Rs 245 crore for FY23.
This positive cash flow demonstrates Oyo’s ability to generate revenue and effectively manage its expenses. It highlights the company’s commitment to financial stability and its progress towards sustainable growth. Oyo’s focus on enhancing operational efficiency and optimizing its business model has yielded positive results, culminating in this significant financial milestone.
The cash flow surplus signifies that Oyo has managed to generate more cash inflows than outflows during the specified period. This accomplishment is particularly noteworthy as it sets the stage for Oyo’s upcoming initial public offering (IPO), instilling confidence in potential investors. The IPO-bound company’s ability to demonstrate profitability and positive cash flow is crucial in attracting investors and establishing a strong foundation for future growth.
Ritesh Agarwal, the visionary founder and CEO of Oyo, has played a pivotal role in the company’s success. Under his leadership, Oyo has disrupted the hospitality industry and expanded its global footprint, becoming one of the world’s largest hotel networks. Agarwal’s strategic vision and relentless pursuit of excellence have propelled Oyo’s growth and positioned it as a major player in the travel and hospitality sectors.
