Business Models

How a Sim Card Seller Went on to Build a $10 Billion Company

From Kashmir to Kanyakumari, travel anywhere in India and one sign stares out at you from billboards, hoardings on the road, and nondescript buildings. You could see the same sign in Japan, China, the Philippines, the UAE, and a host of other countries. It is none other than the red logo of OYO.

In complete contrast, the person behind OYO is not easy to find in a crowd. He is a tall, thin guy who puts in 16 hours a day to make his dream come true. Yes, we are talking about Ritesh Agarwal, India’s youngest self-made billionaire.

In this post, I am gonna share Ritesh Agarwal’s story that has inspired so many young entrepreneurs across the country.

Ritesh Agarwal’s non-typical childhood

The journey of our hero began rather early than normal. Born into a business class family in Bissam Cuttack in Orissa, Ritesh was rather unconventional from those of other kids.

He attended the Sacred Heart School in Rayagada, Orissa. During the growing up days, it was all about fun and learning for him. In the entire Ritesh Agarwal’s story, his childhood is the period that laid the foundation for what he has built today.

His fun elements including screwing around with the computer, and trying hard to find opportunities to make mistakes, so that he could learn new stuff. And doing that he gained a keen interest in software.

To quench his thirst, he borrowed his elder brother’s books for programming. and learned some of the basic languages like Basic and Pascal the rest he managed to learn from Google. Interestingly, he had started coding when he was just 8 years old.

In 2009, Ritesh happened to leave for Kota to join IIT and in no time he figured that Kota was anything but a place where one could learn coding. Hence, his dream of coding took a backseat.

When he turned 16, Ritesh was chosen among the 240 children to be a part of the Asian Science Camp, which is aimed at promoting discussion for the betterment of science in the region, held at the Tata Institute of Fundamental Research (TIFR) in Mumbai.

How it all started – Formation of Oravel

In 2011, Ritesh moved to Delhi with intentions of starting up something of his own and at the same time to prepare for SAT to move to the US for further studies. But fortunately or unfortunately, the SAT never happened.

During that time, Ritesh, due to the leverage of the free time, used to travel a lot and stayed in PG’s, budget hotels, etc. He used to stay at odd bed & breakfast (B&B) places.

He also used his spare time to read about entrepreneurs, attend events and conferences to meet entrepreneurs.

Unlike others, Ritesh, during his days of being a wayfarer, had seen and always felt that budget hotels in India didn’t even meet the very basic needs of a budget traveler. Hence, capitalizing on this opportunity, he started his first venture Oravel Stays in 2012, which he modeled after Airbnb. This is where Ritesh Agarwal’s story takes a turn.

It was an aggregator of bed and breakfast stays across India. In simpler terms, it was meant to be a destination for short and midterm rentals for bed and breakfast joints, private rooms, and serviced apartments.

In a matter of no time, he secured a funding of Rs 30 lakhs from VentureNursery. He also presented his idea at the Thiel Fellowship (from PayPal co-founder and Facebook investor – Peter Thiel).

It is a global contest intended for students under the age of 20 who drop out of school and create a start-up. He managed to reach amongst the top ten winners who received a sum of $100,000 over two years (about Rs 2.7 lakhs/month).

However, the business model didn’t seem to be picking up and as much as he tried, things just weren’t falling in place.

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How he began the real game

Agarwal, who stayed at over 100 bed-and-breakfast rooms while running Oravel, soon discovered that the problem for these portals was not discovery but was that these portals are not standardized.

That is when Ritesh went into the thinking mode and realized that, the biggest pain on the face of this earth while traveling was to find a good, affordable & most importantly available hotel to stay in but like always, most of us ended up staying in a crappy place with equally crappy staff, food, etc. which killed the whole trip.

This also reminded of the time when he couldn’t have the remote control at relatives’ homes. He was then motivated to start OYO (ON YOUR OWN) so that everyone could be in control of the TV remote.

A little about OYO Rooms

OYO Rooms was nothing but an idea to create a system where hotels are not owned, instead, Oyo ties up with certain hotels and acquires a few rooms to be given to people who want to avail the services of OYO. It focuses on standardizing the hotels in the non-branded hospitality sector.

Today, OYO has widely expanded its presence to 800 cities in 80 countries. comprising more than 43,000 hotels with over 1 million rooms.

In 2019, OYO registered a revenue of $951 million, a 4.5X increase on a year on year basis, as compared to $211 million. With total funding of $3.2 billion (up to date), OYO stands with a valuation of $8 billion (down from $10 Billion because of Covid).

Some quick facts

  • Ritesh is the first resident Asian to win the ’20 Under 20’ Thiel Fellowship (2013).
  • He is the world’s youngest CEO at 17 (recognized at 16).
  • Apart from an entrepreneur, Ritesh is also an author, a coder, and a great orator.
  • Ritesh even wrote a book – ‘Indian Engineering Colleges: A Complete Encyclopaedia of Top 100 Engineering Colleges’. This book turned out to become huge on Flipkart and was sold out in a while too. In fact, the tutorials he went to also had this book and his picture was right on the cover.
  • In 2011, Ritesh had joined the University of London’s Indian campus. But just after 3 days of joining he could not control his craving to kick-start his venture. One day he took a day’s leave to work on his project and funnily he never went back.
  • Oyopreneurs is the word OYO uses to refer to its employees.

Final words

When OYO was running just one hotel in Gurgaon, Ritesh used to handle housekeeping, sales, CEO duties, etc. He would literally wear the OYO Rooms uniform for housekeeping and would show the room to customers.

This tells us the level of dedication Ritesh had when he first started his venture. Ritesh Agarwal’s story continues to teach us that absolutely nothing is impossible! No wonder why his story has inspired hundreds of youth across the country.

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Thanks for reading. Let me know if you have ever been to a OYO room. Share your views in the comment section below.

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