Ritesh Agarwal: 25-year-old hotel billionaire who dropped out of university
- Ritesh Agarwal, India's youngest billionaire, first founded his company Oravel Travels, now OYO at the age of 19
- OYO provides online hotel services, update and resales of available hotel rooms and also signs on affiliates through franchise and lease agreements
- From being a college dropout to CEO of a company worth $10 billion, one of India's youngest billionaire's personal and business history is captured by Legit.ng
From a college dropout to India’s youngest billionaire, Ritesh Agarwal’s story of overcoming his odds to inking his name in the 'billionaire history book' has earned attention from major eyeballs around the world.
According to CNN, in just six years, Ritesh Agarwal went from a college dropout to one of India's youngest billionaires.
At 19, he founded budget hotel chain, OYO, which first started as Oravel Travel in the city of Gurgaon, just outside India's capital.
Growing up in the Eastern Indian state of Odisha, Agarwal led a simple life. He knew early on he had an entrepreneurial hunger. At 13, he took a summer job selling SIM cards for mobile phones to other stores in the area.
However, his family wasn't pleased because they wanted him to focus on education first.
''My older siblings went to engineering school and business school. I was like the black sheep," Agarwal revealed.
After finishing 10th grade, Agarwal moved to another town to attend better schools and eventually study engineering.
He would attend school during the week, and on weekends travel to Delhi for networking events to meet entrepreneurs.
During these trips, he would often grow frustrated by the lack of cheap and clean accommodations. That's when he got the idea for Oravel Stays. But when he launched Oravel, Agarwal felt something lacking with the venture.
"As an entrepreneur, you have a gut feeling about whether your idea will become something big or just grow incrementally. The underlying uniqueness was missing," he said.
For three months, he traveled around the country staying with some of his former Oravel clients and studying the hotel industry. He eventually spotted the opportunity: smaller budget hotels.
Now, at 25, the entrepreneur has grown the brand globally and is looking to expand his empire in the US.
While India is OYO's biggest market, with 18,000 locations, its presence in China is quickly catching up, with nearly 13,000 OYO hotels across 338 Chinese cities.
The company's distinctive red and white logo can also be found on hotels in the United Kingdom, Indonesia, the Philippines, and the United Arab Emirates.
The United States, however, is where Argawal sees the next big opportunity.
OYO, an acronym that stood for "On Your Own'', was initially born in 2012 as an online service called Oravel Travel that aggregated budget hotel room listings, inventory of branded budget hotel rooms across India with standardized amenities, such as free WiFi, flatscreen TVs, quality linens and branded toiletries.
Bejul Somaia, a partner at venture capital firm Lightspeed Venture Partners first met Agarwal after he was accepted for a Thiel Fellowship in 2013.
The two-year program created by PayPal founder Peter Thiel awards $100,000 (N36,150,000) in grants to entrepreneurs who either skipped or dropped out of college so they may pursue an innovative business idea.
But Somaia wasn't all that impressed by Agarwal's business idea and told him it wasn't the right model for India.
That's when Agarwal told Somaia about OYO Rooms, an offshoot business he'd quietly launched in 2013 that was doing just that.
The idea clicked and Lightspeed Ventures became an early investor, investing $600,000 (N216,900,000) in seed capital.
By 2016, OYO expanded the business model. Rather than just updating and reselling available hotel rooms, OYO would rebrand the hotels entirely as OYO properties and sign on affiliates through franchise and lease agreements.
He leased the first OYO location in Gurgaon and it took off from there. "In the first few months, we were adding one to two hotels a day."
The company now has more than 35,000 hotels in 800 cities and employs 20,000 people, half of them in India.
OYO, whose other investors include SoftBank, Sequoia Capital India, Airbnb and Greenoaks Capital, is estimated to be valued at $10 billion.
In October, the company raised another $1.5 billion, including a $700 million investment from Agarwal, who now owns a 30% stake in the company.
He also bought $1.3 billion worth of existing shares from investors Lightspeed Venture Partners and Sequoia Capital.
According to the young billionaire, approximately 90% of OYO's business comes from repeat customers and word-of-mouth referrals.
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Agarwal recognises that he still has a lot to learn. "I am only 25, but I am lucky to be surrounded by some of the best talent[s] and leaders who push me to do better," he said. "I have always believed in the big picture and aiming high. I will keep trying."
Meanwhile, Legit.ng earlier reported that a group of young boys triumphed over the fate that sought to put them down and made something great of themselves as they owned their own bottled water company.
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Source: Legit.ng
