Ritesh Agarwal Success Story: How a 23 Year Old Became 2nd Youngest Billionaire

Sunday, July 16th, 2023

Good Morning ☕

Dear readers,

📰 Welcome to the Moneymint’s Business Tales and Trails Edition: Spotlight on Ritesh Agarwal, the CEO of OYO Rooms 🌟

We trust that this issue of our newsletter discovers you in good cheer and eager to explore the captivating realm of business and entrepreneurship. Presently, we direct our attention towards an extraordinary individual who has made a lasting impact on the financial realm of India. In this weekend's edition, we present to you the inspirational narrative of Ritesh Agarwal, the Chief Executive Officer of OYO Rooms.

The Beginning💰📈

Bissam Cuttack, a small town in Orissa, a teenage boy named Ritesh Agarwal was born into a business-class family. From an early age, Ritesh showed a fascination with computers and a thirst for knowledge. While his peers were engaged in traditional childhood activities, Ritesh was busy exploring the world of software, always seeking opportunities to learn and grow.

Ritesh attended Sacred Heart School in Rayagada, Orissa, where he discovered his passion for programming. With limited resources at his disposal, he borrowed his elder brother's programming books and utilized Google to teach himself various languages like Basic and Pascal. Determined to pursue his dreams, he even sold SIM cards to make ends meet, fearing that his family would discourage his entrepreneurial aspirations and force him to return home.

When Ritesh found himself in Kota, Rajasthan, supposedly preparing for his engineering entrance exams, he couldn't resist the urge to escape to Delhi every weekend. It was there that he met like-minded individuals pursuing their own ventures. At the age of 19, he embarked on a journey that involved traveling for months, staying in budget hotels, answering customer calls, and immersing himself in every experience to understand the needs and expectations of budget hotel customers. This hands-on learning proved invaluable when he eventually pivoted from Oravel to OYO.

Unlike traditional hotel chains, OYO Rooms does not own hotels but rather partners with existing hotels, acquiring rooms to offer OYO's services. The company's focus is on standardizing non-branded budget hotels, providing affordable, clean, and readily available accommodation in Tier-I and Tier-II cities across India. OYO quickly gained success, attracting significant funding from investors like Sequoia Capital and Softbank.

However, despite the fairy tale-like story of OYO's rise, investigations into the founder's narrative revealed cracks in the perception of the startup. Unhappy accounts on blogs and personal experiences shared on Twitter shed light on some issues faced by customers. Nevertheless, Ritesh's entrepreneurial journey remained impressive.

The Journey🌊

At the age of 17, Ritesh dropped out of college to launch his first startup, Oravel Stays Pvt. Ltd., in 2012. Initially designed as a platform for budget accommodation listings and bookings, Ritesh realized that the budget hospitality sector lacked predictability. In response, he rebranded the company to OYO Rooms in 2013, focusing on affordable and standardized accommodation. Backed by investors like Softbank Group, Greenoaks Capital, Sequoia Capital, and Lightspeed India, OYO became one of the leading unicorns in the hotel industry, with a valuation of nearly $10 billion.

In 2013, Ritesh was selected for the prestigious "20 under 20" Thiel Fellowship. This two-year program provided him with a $100,000 grant and mentorship from renowned tech entrepreneurs, investors, and scientists. Ritesh's dedication and hard work led OYO Rooms to offer efficient, affordable, and standardized rooms without unnecessary add-ons, catering to the needs of modern travelers.

From coding at the age of 8 to being selected as one of the youngest speakers on the Think EDU panel in 2014, Ritesh's passion for entrepreneurship and learning has been evident throughout his life. OYO Rooms continued to thrive, raising funds from investors like Lightspeed Venture Partners and DSG Consumer Partners, further validating Ritesh's vision. The company expanded its presence to over 20,000 hotels and 1 million rooms in 337 cities, with the OYO Rooms mobile app reaching over 10 million downloads and 5 million bookings.

In recent news, Ritesh Agarwal, the founder of OYO, made a significant investment by purchasing $2 billion worth of shares from venture capital firms Sequoia Capital and Lightspeed Venture Partners. This move showcased his confidence in the company and its future growth.

Ritesh Agarwal's journey from a small town in Orissa to the helm of one of India's most valuable startups is a testament to his determination, entrepreneurial spirit, and ability to seize opportunities. Despite facing challenges along the way, Ritesh's story serves as an inspiration to aspiring entrepreneurs around the world.

Academic Doubt to 500000 rooms in 417 cities

Ritesh Agarwal lacked confidence in his academic pursuits and his ability to thrive in a traditional work environment. This uncertainty led him to dive into the endeavor of building OYO. He expressed, "I knew that if I had gone to college, I wouldn't have performed well. And then my family would have disapproved of me. So, if my family was going to disapprove of me anyway, I would rather pursue something that truly excited me!"

Before finding success, Ritesh experienced six failures along the way. He once remarked, "If you haven't failed, you haven't toughened yourself."

Coming from a modest background, Ritesh's family operated a small local shop in Southern Orissa. If he hadn't chosen a different path, he would have ended up overseeing the shop. Ritesh desired something more exciting and embarked on working with SMEs, attempting to generate sales. It was only in his second venture that he began to achieve slow but steady success.

Initially, convincing venture capitalists to invest in his vision was no easy task for Ritesh. When he introduced the concept of OYO, which aimed to revolutionize hotel bookings, it was a novel idea. Investors questioned if there was any existing model similar to what he was trying to build. While some initially perceived his venture as a real estate business, their perspectives shifted when competition emerged.

The path to success for OYO was an arduous one. Managing the element of predictability posed a significant challenge. Even after standardizing 45,000 rooms in 160 cities, consistently maintaining facilities, addressing arising issues, maintaining a 4-star rating on TripAdvisor, and ensuring customer satisfaction proved to be a daunting task that required immense effort.

In the international market, OYO has a favorable business landscape. Ritesh asserts that OYO does not face direct competition on a global scale, allowing the company to minimize discounting and cash burn. As a result, OYO enjoys a more favorable economic position as it continues on its journey.

As we bring this edition of our business and finance newsletter to a close, we hope the insights and information shared have empowered you to navigate the ever-changing landscape of the global markets. Remember, success in the world of business and finance is a result of continuous learning, adaptability, and strategic decision-making.

We'll be back soon with more valuable content to fuel your ambitions and guide you towards prosperity. See you tomorrow!