OYO - Success Story
Oyo Rooms is a popular Indian hotel chain that has made a name for itself in the hospitality industry. The company was founded in 2013 by Ritesh Agarwal, who is now the CEO of Oyo. At just 19 years old, Agarwal dropped out of college and started his entrepreneurial journey by launching Oravel Stays, a platform for budget accommodations. However, it was Oyo Rooms that really put him on the map.
Oyo Rooms was created with a vision to provide affordable and comfortable accommodations to travelers across India. Agarwal recognized that the budget hotel industry was fragmented, with many hotels lacking proper maintenance, cleanliness, and consistency. He wanted to change that by bringing in standardization, technology, and a focus on customer satisfaction.
Agarwal’s efforts paid off, and Oyo Rooms quickly became popular among budget travelers. The company now has a presence in over 5 countries, with more than 23,000 hotels and 1 million rooms under its brand. Oyo has also expanded its offerings to include premium hotels, vacation rentals, and long-term stays.
Agarwal’s success with Oyo has made him one of the youngest and most successful entrepreneurs in India. He has won several awards and accolades, including the Business World Young Entrepreneur Award and the Forbes 30 Under 30 Asia list. Agarwal’s story is an inspiration to many young entrepreneurs, showing that with hard work, dedication, and a vision, anything is possible.
OYO - Company Highlights
| Company Name | OYO |
|---|---|
| Headquarters | Gurgaon |
| Industry | Hospitality |
| Founders | Ritesh Agarwal |
| Founded | 2012 |
| Operational Revenue | Rs 3,961.6 crore ($495.56 million) in FY21 |
| Areas Served | Europe, Asia and United States |
| Website | oyorooms.com |
Company Highlights
OYO – About
OYO – Founders and Team
OYO – Startup Story
OYO – Mission and Vision
OYO – Name and Logo
OYO – Business and Revenue Model
OYO – Challenges Faced
OYO – Funding and Investors
OYO – Acquisitions and Investments
OYO – Growth and Revenue
OYO – IPO
OYO – Competitors
OYO – Future Plans
OYO - About
OYO, also referred to as OYO rooms or OYO hotels, is a hospitality platform operating worldwide that assists individuals in discovering affordable rooms and lodgings. The company showcases its leased and franchised hotels on its platform, providing customers with a range of options for their living spaces at cost-effective prices. OYO has experienced remarkable success over the years, thanks to its ambitious expansion plans and marketing tactics.
Established in 2012, OYO is based in Gurgaon, Haryana and was founded by Ritesh Agarwal, who started the company at the age of 19. According to reports in 2019, the company has expanded its operations to more than 800 cities across 80 countries. OYO not only assists individuals in locating hotels and rooms, but also offers solutions for finding homes, vacation stays, short/long term rentals, and business/corporate travel requirements.
OYO - Founders and Team
Ritesh Agarwal, born on November 16, 1993, in Odisha, is the founder and group CEO of the online hospitality chain OYO. His early interest in business led him to drop out of college and join the Thiel Fellowship program in 2013, which helped lay the foundation for OYO.
Aditya Ghosh serves as a board member at OYO since 2019. He has over 24 years of experience in management and served as the CEO of the company’s South Asian region. Ghosh recently completed an advanced management program in business administration at Harvard Business School.
Troy Alstead, a board member at OYO, served as the COO of Starbucks for 24 years starting in 1992. He also serves on the director’s boards of several big companies such as Harley-Davidson, Levi Strauss, Top Golf, and more.
Rohit Kapoor, OYO’s former global chief marketing officer, reportedly resigned from the company in July 2022 and is expected to join Swiggy as its CEO or assume any other leadership position in the same. Paralympian Deepa Malik was recently announced as an independent director of the company, with founder and OYO Group CEO Ritesh Agarwal acknowledging her contributions to building a more inclusive and diverse ecosystem for stakeholders.
As of 2021, OYO had a workforce of over 5000 employees.
OYO - Startup Story
OYO’s origin story can be traced back to Ritesh Agarwal’s personal travel experiences. After dropping out of college, Ritesh had a desire to start his own venture. He founded an online hotel and room booking platform called Oravel, which offered budget-friendly accommodations through partnerships with local hotels. In 2013, Oravel evolved into OYO, a global hospitality marketplace that provides affordable accommodations in leased and franchised hotels across the world. The company has since grown rapidly through aggressive expansion and innovative marketing strategies. OYO’s success is a testament to Ritesh’s vision and determination to make budget travel accessible to everyone. More Startup Stories…
OYO - Mission and Vision
OYO’s mission is centered around providing affordable and reliable accommodation options that can be booked quickly and easily. The company aims to simplify the process of finding the right place to stay for its customers. In addition, OYO has a broader vision of supporting entrepreneurs and small businesses by providing them with opportunities to increase their earnings and streamline their operations through home and hotel partnerships. OYO’s focus on dealer welfare sets it apart from other companies in the hospitality industry.
OYO - Name and Logo
The name OYO stands for ‘On Your Own’ rooms. Earlier, the company was named ‘Oravel‘ but later changed to OYO. The logo of the company carries the three-letter name ‘OYO’ in bold red.
OYO - Business and Revenue Model
OYO’s business operation primarily involves leasing rooms from local hotels and other stays and renting them out to customers. OYO started with this leasing model and later expanded its business to a franchise model where it partnered with local hotels and made them its franchisee. This franchise model has been very successful for OYO, contributing to 90% of its revenue.
OYO targets budget travelers who are looking for affordable accommodation options and offers competitive prices for its rooms. The company aims to make the process of booking a room simple and convenient for its customers. In addition to its focus on customers, OYO also prioritizes the welfare of its franchisees and aims to empower entrepreneurs and small businesses by providing them with opportunities to increase their earnings and simplify their operations.
OYO - Challenges Faced
In addition to these challenges, OYO has also faced criticisms for its aggressive expansion strategy, which led to quality control issues and customer complaints about cleanliness and service standards. The company has since taken steps to address these issues, including launching new initiatives focused on improving the quality of its hotels and standardizing its services.
Moreover, there were reports of layoffs in some of the countries where OYO operates, which led to criticism from local governments and labor unions. OYO has also faced controversies related to its corporate governance, including allegations of financial mismanagement and improper conduct by senior executives.
Despite these challenges and controversies, OYO continues to operate and expand its business, while also taking steps to address its shortcomings and improve its services. The company has received significant investments from major players in the tech and hospitality industries, and it remains to be seen how it will navigate the challenges and opportunities that lie ahead.
OYO - Funding and Investors
| Date | Round | Money | Investors |
|---|---|---|---|
| January 13, 2022 | Secondary Market | $29.72 million | Qatar Insurance Company |
| December 16, 2021 | Debt Financing | – | – |
| July 29, 2021 | Series F | $5 million | Microsoft |
| July 16, 2021 | Debt Financing | $660 million | Citadel and Varde Partners |
| March 11, 2021 | Debt Financing | $200 million | SoftBank Vision Fund |
| January 6, 2021 | Series F | $7 million | Hindustan Media Venture |
| December 10, 2019 | Series F | $1.5 billion | Ritesh Agarwal and SoftBank |
| November 30, 2019 | Debt Financing | $6.73 million | MyPreffered Transformation |
| April 1, 2019 | Series E | $75 million | Airbnb |
| February 14, 2019 | Series E | $100 million | Didi |
| December 7, 2018 | Series E | $100 million | Grab |
| September 25, 2018 | Series E | $1 billion | SoftBank Vision Fund |
| September 7, 2017 | Series D | $250 million | SoftBank Vision Fund |
| September 1, 2017 | Series D | $10 million | Huazhu Hotels Group |
| August 16, 2016 | Series C | $90 million | SoftBank Group |
OYO - Acquisitions and Investments
| Acquisition Date | Name of the Company | Amount |
|---|---|---|
| August 10, 2022 | Bornholmske Feriehuse | – |
| May 9, 2022 | Direct Booker | – |
| September 2, 2019 | Danamica | $10 million |
| May 1, 2019 | Leisure Group | $415 million |
| March 26, 2019 | Qianyu Islands | – |
| March 15, 2019 | Innov8 Coworking | $30 million |
| August 13, 2018 | Weddingz | – |
| July 10, 2018 | AblePlus Solutions Pvt Ltd. | – |
| March 18, 2018 | Novascotia Boutique Homes | – |
OYO Investments:
OYO has also invested $3 billion in one of its business wings OYO Life.
| Investment Date | Name of the Company | Deal Value | Funding Round | Lead Investor |
|---|---|---|---|---|
| October 30, 2018 | OYO Life | $3 bn | – | – |
OYO - Growth and Revenue
Overall, OYO’s growth story is a remarkable one. From a small startup to a multinational hotel chain business, the company has come a long way. Its aggressive expansion strategies and focus on providing affordable accommodation to customers have helped it gain popularity and recognition worldwide. However, the company has also faced challenges and controversies along the way, especially in terms of profitability and contracts with hotel owners. The Covid-19 pandemic has also had a significant impact on OYO’s business, but the company has shown resilience and is slowly recovering.
OYO - IPO
As of my knowledge cutoff in September 2021, OYO had not yet gone public with an IPO (Initial Public Offering). However, the company has reportedly been considering the option of going public in the near future, with plans to potentially list on the Indian stock market as well as in the US. OYO’s IPO plans have been subject to speculation and rumors for several years, and the company has raised billions of dollars in funding from investors in preparation for a potential IPO. However, any concrete plans for an IPO are subject to market conditions and regulatory approvals, and the company has not yet announced any official timeline or details for a public offering.
OYO - Competitors
OYO faces competition from several other players in the hospitality industry. Some of its major competitors include:
Airbnb – A global online marketplace for booking vacation rentals, homes, and apartments.
Booking.com – An online travel agency that allows customers to book hotels, flights, rental cars, and vacation rentals.
Expedia – Another online travel agency that provides booking services for hotels, flights, rental cars, cruises, and vacation packages.
Agoda – A booking platform that focuses on hotels and vacation rentals in Asia.
Traveloka – A Southeast Asian online travel booking platform that offers flights, hotels, and other travel-related services.
MakeMyTrip – An Indian online travel company that provides booking services for flights, hotels, holiday packages, and more.
Treebo – An Indian budget hotel chain that offers standardized accommodation options.
These companies offer similar services to OYO, and compete with it for market share in the hospitality industry. However, OYO has managed to carve out a niche for itself with its focus on affordable and standardized accommodation options, as well as its strong technology platform and distribution network.
OYO - Future Plans
OYO’s future plans include expanding its presence in the markets where it is already operating and entering new markets as well. The company aims to become the world’s largest hotel chain by 2023, with a goal of reaching over 2.5 million rooms globally.
In addition to its existing services, OYO plans to diversify into other areas such as food and beverage, coworking spaces, and event management. It also aims to increase its focus on sustainability and reduce its carbon footprint.
OYO has also announced plans to go public in the future, although the timing of the IPO is yet to be confirmed. The company is expected to raise significant funds from the IPO, which it plans to use for further expansion and growth.
Overall, OYO’s future plans revolve around continued growth and expansion, as well as diversification into new areas of business.
