OYO raises $1 billion fund: How 24-year-old Ritesh Agarwal turned his idea into India's second most valuable start-up
OYO, a hospitality firm started by 24-year-old Ritesh Agarwal's hospitality firm, recently announced it had raised a capital of $1 billion (around Rs 7,280 crore) in a fresh round of funding led by SoftBank Investment Advisers (SBIA) through SoftBank Vision Fund for further expansion.
The company has already raised $800 million and has a further commitment of $200 million. At a $5 billion valuation, OYO would be India's most-valuable startup after Paytm.
Agarwal is the youngest wealthy Indian according to a Barclays-Hurun India rich list. A college dropout, Agarwal got the idea for Oyo while travelling across the country on a shoestring budget and lodging at some "truly horrible guest houses", according to Bloomberg.
Born and raised in Bissamcuttack and Rayagada in Odisha, he dropped out of college at 17 to pursue his entrepreneurial dreams. He hails from a business family.
In 2013, Agarwal got the two-year $100,000 fellowship from Peter Thiel, the PayPal co-founder which is given to entrepreneurs below 20 years of age who skip college to start their own business.
In 2015, he got $100 million in venture funding from investors including Sequoia Capital and Japan's SoftBank Group Corp.
OYO Hotels now aims to shake up Britain’s budget accommodation market with a franchising and marketing strategy to sign up 300 independent hotels before 2020.
Marking its first expansion outside Asia, the franchiser said it planned to invest 40 million pounds ($53 million) to launch in 10 British cities in the next 18 months via a smartphone-based service for franchise owners and guests.
Agarwal recently said OYO would launch its first two hotels in the London districts of Edgware and Ilford next month.
Since its founding in 2013, OYO has become South Asia’s largest hotel chain, offering 211,000 rooms in 349 cities. OYO has raised $450 million, according to Crunchbase data. Alongside Vision Fund, other funders include Greenoak Capital and Lightspeed Venture Partners.
"In the last 12 months, we have increased our international footprint to five countries - India, China, Malaysia and Nepal, and more recently in the UK," Agarwal said recently after announcing a capital raise of $1 billion. "With this additional funding, we plan to rapidly scale our business in these countries, while continuing to invest further in technology and talent," he added.
With inputs from agencies
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Ritesh Agarwal, the company’s chief executive, said Oyo was focused on sustainable growth and profitability — which meant layoffs.
SoftBank-backed Oyo is in the market to raise about $1bn; looming deal will spawn another Indian unicorn
Oyo is reportedly in talks with two consortia to raise between $500 million and $1 billion.
If the deal fructifies, SoftBank's shareholding in Oyo Rooms would top 50 percent