Ritesh Agarwal's journey from being a SIM-seller to the

helm of OYO Rooms

Madhav Chanchani, ET Bureau Aug 3, 2015, 10.20AM IST

Tags:

Softbank|
Ritesh Agarwal|
OYO Rooms|
Oravel Stays|
Bejul Somaia

(For Agarwal, who left)

MUMBAI: When Ritesh Agarwal walked into a meeting with venture investor Bejul Somaia last year, his
rucksack attracted immediate attention. Curious as to what the young entrepreneur was carting around,
Somaia asked him about it and was amazed to hear the answer.
For Agarwal, who left home in Odisha as a teenager to seek his fortune, carrying all his possessions
wherever he went was second nature. And now, as cofounder of an online aggregator of budget hotel
rooms, checking into a new room every night was also business.

"It helps me get a pulse of what customers and hotel owners want and also gives me the convenience of
not maintaining a home," says the itinerant founder whose startup, OYO Rooms, has recently raised
funds from Japan's SoftBank.
Some four years after he landed in Delhi, Agarwal, who once sold SIM cards in his hometown, has built
one of the most valuable Internet startups in India by a college dropout.

The hands-on approach is a big reason why Agarwal has been able to aggressively ramp up OYO
Roomsfrom five cities in December 2014 to 73 cities now.
"He has a very strong grip on all the levers of the business. In five minutes he can go from a strategic
conversation to drilling down into the minute details important to a property owner," said Somaia, whose
firm Lightspeed invested in OYO in January 2014.
Agarwal, hailing from a business family, moved to Delhi in 2011 to start his entrepreneurial journey after
deciding to skip engineering college entrance exams. He had also briefly enrolled in University of
London's India campus.
It was when he was 18 that he founded Oravel Stays, which was building the Indian version of home
sharing portal AirBnB. Agarwal got in touch with accelerator VentureNursery, flew down to Mumbai and
got seed funding of around Rs 30 lakh after a three-month programme.
Agarwal, who stayed at over 100 bed-and-breakfast rooms while running Oravel, soon discovered that the
problem for these portals was not discovery. "The big problem was that these portals are not
standardised," said Agarwal.
It was around the same time that Agarwal became the first Indian to be chosen for Thiel Fellowship,
where he was given $100,000 grant by early Facebook investor and PayPal cofounder Peter Thiel. The
fellowship is given to entrepreneurs below 20 years of age who skip college for two years to start running
their own business.
"One big learning from Thiel fellowship was think really big and create an impact, without thinking if
anybody has done it before," said Agarwal, who decided to pivot the model to OYO Rooms, putting most
of the Thiel grant into the business.
And investors feel that Agarwal has the maturity to build an organisation and execution capabilities. "I
always thought Ritesh was unusual for his age (or any age) in terms of his clarity of thought and purpose.
He embraces the concept of hiring people better than him and giving them the freedom to contribute,"
said Somaia, adding that experienced founders also struggle with this.
Perhaps as part of his growing up, Agarwal decided to move out of OYO to an apartment two months ago.

FEATURED ARTICLES

Oyo Roomss 21-year-old CEO raises $25M for budget

hotel platform [UPDATED]
CommentPrint

Mar 25.2015
Ritesh Agarwal is the 21-year-old founder of hotel listings startup Oyo Rooms in
New Delhi. He has just raised $25 million (Rupees 150 crore) from San
Francisco-based Greenoaks Capital and existing investors Sequoia, DSG
Consumer Partners, and LightSpeed Ventures.
CORRECTION: I originally wrote $20 million (Rupees 125 crore). Sorry.
Becoming an 100-employee company with a $100 million valuation took time. But
not much time.
Three years ago, Agarwal founded Oravel, a clone of peer-to-peer lodging
website Airbnb. He then received a Thiel Fellowship that paid him $100,000 over
two years to create a start-up.
He pivoted to a new business model called Oyo Rooms, a marketplace for
branded budget hotels in southeast Asia.
Oyo Rooms is an Indian virtual hospitality brand. It aggregates budget hotels and
guesthouses, making inventory discoverable and bookable online. Its branding
provides a franchise-like consistency of product. Its a managed marketplace of
properties.
In December 2012, Oyo Rooms received seed funding. This was followed in July
2013 by more seed funding from Lightspeed Venture Partners (LSVP) and DSG
Consumer Partners.
In May 2014 it received about $650,000 from Sequoia Capital and LSVP at a premoney valuation of $60 million.

Its unclear how well the business is actually doing.

OYO Rooms told the Economic Times that it facilitated bookings for 45,000
rooms nights in February. But an investigation by MINT claimed that the founder
has fibbed repeatedly about the actual performance of his projects. He denies
this.
Oyos site today says that, as of mid-January, it had 200 properties in 11 cities
across India.
Tnooz counted only 172 hotels as listed properties on the site today.
CEO Agarwal responded to Tnooz:
As you mentioned that its difficult to confirm whether we are doing well, I wanted
to request you to check our Alexa rank and traffic from Comscore including
channel of traffic and youd know that we are a large branded network of budget
hotels since they would be factual by any means. Happy to send screenshots
and links if needed.
Thank you again for the coverage, we are excited about building a proposition for
guests. And solving a problem which has been there but solving it was tough but
important.

Oyo is unique in the market, but its closest competitor is Stayzilla, which has a
mixed business model of listing properties and rentals, and which raised $15
million in Series B funding last month.

OYO Rooms is an Indian brand having a large network of hotels. OYO Rooms currently operates in
more than 160 Indian cities including Ahmedabad, Delhi, Gurgaon, Jaipur, Mumbai, Bangalore,
Hyderabad, Goa, Chennai, Kolkata, and others. OYO is present in major metros, regional hubs,
leisure destinations and pilgrimage towns. The company's CEO and Founder, Ritesh Agarwal,
announced OYO's launch in Malaysia through a post on the company's official blog in Jan 2016. [1]
According to a research carried out by CB Insights for The New York Times, OYO Rooms has been
deemed as one of the upcoming start-up unicorns. [2] The company is backed by investors like
the Softbank Group, Greenoaks Capital, Sequoia Capital and Lightspeed India.[3]
OYO Rooms provides standardized hotel rooms with features such as an air-conditioner, TV,
complimentary breakfast and Wi-Fi with 24x7 customer service support. There is also an OYO
Rooms App for guests for booking rooms, ordering beverages and requesting room service.
Contents
[hide]

1Business Model

2Founder

3Funding

4Growth

5Awards

6Listing of hotels

7Booking Platforms

8References

Business Model[edit]
OYO Rooms is a branded network of hotels. OYO partners with hotels with the aim of
standardization on various measures in each room including free WiFi and breakfast, flat-screen
TVs, spotless white bed linen of a certain thread count, branded toiletries, 6-inch shower heads, a
beverage tray and so on. The standards are audited every few days so that the customers are

assured of a quality experience. OYOs budget stays range from 999 ($16) to 4000 rupees ($66).
OYO provides property owners with support such as quality standardized supplies and service
training.[4]

Founder[edit]
Ritesh Agarwal, is the founder and CEO of OYO Rooms. Ritesh started his entrepreneurial journey
when he was 17 years old. He dropped out of college and launched his first startup Oravel Stays
Pvt. Ltd. in the year 2012.[5] Oravel was designed as a platform to enable listing and booking of
budget and premium accommodations. He soon realized that the budget hospitality sector lacked
predictability. Therefore, he pivoted Oravel to OYO Rooms in 2013 with the key proposition of
offering affordable and standardized accommodation.[6]
Ritesh was selected for the Thiel Fellowship, a two-year program started by Paypal founder, Peter
Thiel, in 2013. Through the fellowship Ritesh received a support grant of $100,000 to pursue his
start-up idea.[7]
Ritesh's story has been widely covered by the Indian media. [8] He has won Business World Young
Entrepreneur Award[9] and the TiE-Lumis Entrepreneurial Excellence Award.[10]More recently, he was
named by Forbes in its "30 Under 30" list in the consumer tech sector.[11]

Funding[edit]
This section is in a list format that may be better presented using prose. You can
help by converting this section to prose, ifappropriate. Editing help is available. (June 2015)

OYO Rooms got its first round of funding from Venture Nursery in December 2012. [12] Then
another round of funding came from Lightspeed Ventures in February 2014. [13] In March 2015,
OYO Rooms raised $25 million from Lightspeed, Sequoia and others.[14] After that in July 2015,
OYO Rooms raised $100 million from SoftBank.[15]

Growth[edit]
OYO Rooms started with 1 city and 1 hotel (OYO Rooms Huda City Centre) in Gurgaon in May 2013
and has seen a tremendous growth. The company as of November 2015 has 4,000+ hotels (more
than 40,000 rooms) in 160+ cities of India.[16] OYO Rooms has been named India's largest budget
hotel chain.[17] Recently, OYO launched in Malaysia.[18]

Awards[edit]
Express IT Awards - Start-up of the Year,[19] India International Travel Mart Award and Lufthansa ET
Now Runway to Success Award.[20]

Listing of hotels[edit]
OYO Rooms reaches out to prospective hotels to partner with them. A hotel owner can also reach
out to OYO through their webpage.[21] The OYO team then contacts the hotel and audits the hotel to
understand the changes needed to standardize the property as per OYO standards, and shares
other details of the partnership agreement.
OYO is now active in more than 160 cities across India and growing rapidly.

Booking Platforms[edit]
OYO Rooms can be booked from multiple platforms, including the OYO Rooms App
on Android and Windows Phone.[22] A person can also login to their website to book a room.