Ritesh Agarwal is a serial entrepreneur at the young age of 22. His latest venture OYO Rooms is now present in 170 cities in India, besides Malaysia
Ritesh Agarwal is a role model for aspiring entrepreneurs. He has achieved everything in life that an ordinary young man could not do at this age. He is India’s first graduate of the Thiel Fellowship, a programme started by PayPal Founder Peter Thiel. He is also author of a best-selling book The Encyclopaedia of Indian Engineering Colleges.
And now, he is Founder of one of the fastest-growing budget hotel marketplaces in the world that has got the backing from the likes of SoftBank.
Path to success
A college drop-out and geek, Agarwal plunged into entrepreneurship at the age of 17 in the year 2012 by starting Worth Growth Partners. He, however, went broke and was chucked out of his rented apartment by his land lord. A few months later, he started a short-stay accommodation portal, called Oravel Stays. The startup got noticed by leading investors, such as VentureNursery, DSG Consumer Partners and Lightspeed Venture Partners.
However, in mid-2014, Oravel was shut down as it failed to scale as expected. Around the same time, he launched OYO Rooms, a budget hotel-booking platform, a first of kind in India. It was an instant hit among the price-conscious middle class families in India. There was no looking back. The company is now one of the fastest-growing consumer Internet companies in India.
SoftBank comes in
In August 2015, SoftBank picked up a stake in the company by leading a US$100 million investment in the firm. Last month, SoftBank returned to co-lead another US$100 million in the startup, along with an undisclosed international sovereign fund. Existing investors Sequoia Capital, Lightspeed Venture Partners, Greenoaks Capital, DSG Consumer Partners and VentureNursery also co-invested.
The firm is now present in 170 cities, covering almost all major cities in India. The latest update is that it has hit unit profitability at an aggregate level across its presence in all 170 cities.
According to a press statement, OYO claims to have delivered 15x YoY growth with 2.3 million booked room-night transactions in Q1 Jan-Mar 2016. Surprisingly, about 95 per cent of its traffic comes from its own sales channels such as app, web and call centre.
“Profitability has come from innovating revenue-sharing models, a deep understanding of our markets and enabling new demand growth channels. These coupled with a strong data science driven approach help us dynamically control occupancy and room pricing. Far from being a hindrance, our large network and scale allow us to adopt a pricing portfolio approach and provide a wide inventory-choice for the guest. Our real-time demand prediction engine smartly balances revenue management versus an all-out discounting approach. This makes us the majority source of demand for our hotel partners and enables relationships that secure a superior experience for OYO’s guests,” said Agarwal.
OYO currently operates in more than 170 Indian cities including Delhi, Gurgaon, Mumbai, Bangalore, Hyderabad, Goa, Chennai and Kolkata. These include major metros, regional hubs, top leisure destinations, as well as pilgrimage towns. OYO has also recently launched operations in Malaysia.
Recently, OYO acquired smaller rival Zo Rooms.
Why OYO stands out
Essential standards and strong audit systems: OYO has dedicated on-ground teams conducting extensive audits of each and every room within the network and enabling personalised support for guests. All OYOs are audited rigorously for essential standards to identify best experience hotels (OYO Star Partners) as well as purge non-compliant hotels (121 last year) from the network.
Competitive pricing: OYO’s scale has enabled it to ensure real-time availability of inventory and a 30 per cent lower price compared to other online hotel sellers. OYO will continue to provide the best price for the industry with scale and subsidy.
Dedicated owner engagement (OE) team works hand-in-glove with hotel partners for feedback and assistance to build relationships that enable positive GX and high impact projects such as OYO Bazaar (marketplace for all hotel supplies) and OYO Care (on-demand housekeeping services)
Seven-day reconciliation cycle: A deeply integrated accounting system with its hotel partners enables live inventory and payment settlement that provides almost immediate access to earnings.
A consumer facing app (4.5 million+ downloads on Android and iOS) that enables a fast booking experience via access to a large network of trusted hotels. Mobile channels contribute over 50 per cent of demand.
OYO has developed capabilities to predict real-time demand and forecast demand trends across every latitude/longitude in 170-plus cities in India. This gives OYO an advantage in scaling up supply profitably and pricing capabilities to match that supply and demand.
from e27 http://ift.tt/1On0WW0