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Ritesh Agarwal and OYO

Ritesh Agarwal and OYO: The Journey from Startup to Industry Leader

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OYO Rooms, commonly known as OYO, has redefined the budget accommodation sector with a tech-driven approach. The brainchild of Ritesh Agarwal, OYO began its journey in 2013. Ritesh identified a gap in affordable and standardized lodging while traveling across India. His firsthand experiences with inconsistent hotel services and unkempt accommodations led him to launch Oravel Stays in 2012, which later pivoted to OYO Rooms.

Early Life and Ambitions

Ritesh Agarwal and OYO

Image Source: sagartech.co.in

Ritesh Agarwal’s journey to becoming a hospitality titan is both unconventional and inspiring. Born in a small town in Odisha, India, Ritesh’s beginnings were modest, with his family running a simple shop. He attended Sacred Heart School in his hometown but harbored dreams much larger than his surroundings. His aspirations led him to Kota, Rajasthan, known for its rigorous coaching classes for engineering aspirants. However, his true calling lay outside the traditional education path.

Ritesh moved to Delhi and enrolled in college, but soon realized that his passion lay in startups and entrepreneurship. To make ends meet, he sold SIM cards, an experience that taught him resilience and the importance of self-reliance. This period was crucial, as it also saw him self-learning software development, skills that would be instrumental in his entrepreneurial journey.

The Birth of Oravel Stays

The turning point came in 2012 when Ritesh founded Oravel Stays, aiming to make budget stays accessible to everyone. This concept caught the attention of Venture Nursery, an accelerator program that invested in his vision and provided the initial capital to kickstart his dream. Ritesh’s ambitions soared when he became the first Indian to win the Thiel Fellowship, a program offering young entrepreneurs $100,000 to drop out of college and pursue their business ideas.

The Launch of OYO Rooms

Using the fellowship grant, Ritesh launched OYO Rooms in 2013. This platform would revolutionize budget accommodation in India and beyond. OYO’s business model was unique and scalable, initially functioning as an aggregator of budget hotels before evolving into a full-fledged franchise. It leveraged technology to standardize services, ensuring uniformity in room quality, amenities, and customer service across all its partner hotels.

OYO’s meteoric rise can be attributed to aggressive expansion and strategic funding. Starting with a single hotel in Gurgaon, OYO expanded rapidly across India and then ventured into international markets, including China, the US, Europe, and Southeast Asia. This global footprint was supported by substantial funding rounds from prominent investors like SoftBank, Sequoia Capital, and Lightspeed Venture Partners. By 2019, OYO had become the world’s third-largest hotel chain by room count.

Challenges and Controversies

Despite its rapid growth, OYO has faced several challenges and controversies. Issues related to quality control, customer service, and strained relationships with hotel partners have periodically surfaced. The company has also faced legal battles and regulatory hurdles in various markets. The COVID-19 pandemic posed another significant setback, severely impacting the hospitality industry and forcing OYO to restructure its operations and workforce.

Also Read: The Inspiring Story of Marc Benioff and Salesforce

The Legacy of Ritesh Agarwal

Ritesh Agarwal’s journey from selling SIM cards to becoming the youngest self-made billionaire is a testament to dreaming big and working hard. At just 29, his net worth soared to Rs. 16,000 crore ($2.1 billion), and OYO, the startup he founded, reached a valuation of Rs. 74,000 crore. His story underscores that with persistence, creativity, and a willingness to learn, it’s possible to turn humble beginnings into global success stories. Ritesh’s life teaches us that success comes from not just having a vision, but from the courage to pursue it against all odds, making him a true inspiration to aspiring entrepreneurs worldwide.

Oyo Talks to Apollo for $660 Million Refinance on IPO Delay

Oyo Talks to Apollo for $660 Million Refinance on IPO Delay

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Oyo Hotels, the hospitality startup backed by SoftBank Group Corp., is in discussions with Apollo Global Management Inc. to refinance a $660 million loan. This move comes as Oyo seeks additional time to reduce its debt, following a delay in its initial public offering (IPO), sources familiar with the matter revealed.

Oyo Talks to Apollo for $660 Million Refinance on IPO Delay
Image Source: bloomberg.com

Oravel Stays Pvt, Oyo’s parent company, is reportedly seeking to extend the loan’s maturity to five years, compared to the existing 2026 deadline. The negotiations are ongoing, with a decision potentially being reached as early as next month, according to insiders.

The talks with Apollo come on the heels of Oyo reporting its first-ever annual profit. Fitch Ratings anticipates further improvement in earnings as the travel industry continues to recover. Oyo, initially heralded as the first Indian unicorn to secure debt from foreign institutions, had offered generous terms and maintenance covenants, a practice common among firms considered risky by investors.

A spokesperson for Oyo addressed the refinancing discussions, stating, “Due to an increase in profits, we regularly get approached for cheaper financing options, but the company’s board hasn’t approved anything, including prepaying some portion.” Apollo declined to comment on the matter.

As of now, there’s no final decision on the refinancing terms, and Oyo’s loan was indicated at 86.5 cents on the dollar according to data compiled by Bloomberg.

Oyo’s prolonged wait for its IPO has proven to be more protracted than anticipated. The anticipated proceeds from the IPO could have assisted the company in reducing its debt, but instead, Oyo is exploring refinancing options. The startup’s founder, Ritesh Agarwal, has been striving for years to bring Oyo public. The company, 47% owned by SoftBank, also counts Airbnb Inc. among its backers.

Also Read: Dell Says Servers, Not PCs, Are Its Main Growth Engine in the AI Era

Oyo had initially filed for an IPO in 2021, aiming to raise 84.3 billion rupees ($1 billion). However, it faced challenges as technology valuations plummeted, impacting startups globally. Although Oyo filed fresh IPO documents on April 1, key details such as the amount sought, advisors, and financial specifics remain undisclosed.

The ongoing negotiations with Apollo underscore Oyo’s strategic financial moves as it navigates the complexities of the hospitality industry and seeks to strengthen its position in the market.

Flipkart Tops the List of Best Company for Employees in India Third Time in a Row; Beats Amazon and Oyo

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LinkedIn has released the 4th edition of the ‘2019 Top Companies in India’, and Flipkart is the one that topped the list of the most preferred workplace for Indians. The Walmart acquired company Flipkart is a home for over 14000 employees and is one of the fastest growing companies in India.

flipkart
Image Source: amarujala.com

The list from LinkedIn has ranked Amazon and OYO at the second and the third places, and the parent company of PayTm, One97, got shifted to fourth place from the third place which it held in the last year’s list.

LinkedIn, with the help of its 54 million users in India, shortlists the companies for ranking in the list and take four major criteria into account – interest in the company, engagement with employees, job demand and employee retention. Also, another requirement for the companies to get ranked into the list was to have employed over 500 employees as of February 1, 2018.

The evaluation of the best company was among the private companies operating in India, and any non-profit firm, government institutions and the recruiting companies were excluded from the competition. Also, LinkedIn and its parent company, Microsoft, were also not included in the contest to keep it fair.

Though Flipkart has been winning this race for the past three years, consecutively, as it has made to the top of the same list in 2016 and 2017, it is a great achievement for any company to be in a list of the most loved company by the employees.

Flipkart is one of the most successful startups in India and houses major e-commerce service providers including Myntra, Jabong and PhonePe, in India. It was also credited for having the fairest in working conditions and wages for ‘gig economy’ workers by an Oxford Internet Institute study.

This annual survey of the companies is done globally to determine the top companies to work for in India, Australia, Brazil, China, France, Germany, the U.K, and the U.S., among others. Following is the list of top 25 companies to work with according to LinkedIn:

  1. Flipkart (Walmart) – Internet
  2. Amazon – Internet
  3. Oyo – Hospitality
  4. One97 Communications (Paytm) – Internet
  5. Uber – Internet
  6. Swiggy – Internet
  7. Tata Consultancy Services – Information technology and services
  8. Zomato – Consumer services
  9. Alphabet – Internet
  10. Reliance Industries – Oil and energy
  11. EY – Accounting
  12. Adobe – Computer software
  13. Boston Consulting Group – Management consulting
  14. Yes Bank – Banking
  15. IBM – Information
  16. Daimler AG – Automotive technology and services
  17. Freshworks – Information technology and services
  18. Accenture – Information technology and services
  19. Ola – Internet
  20. ICICI Bank – Banking
  21. PwC India – Management consulting
  22. KPMG India – Management consulting
  23. Larsen & Toubro – Construction
  24. Oracle – Information technology and services
  25. Qualcomm – Wireless