At Rise My Venture, we recently heard about funding news of budget hotel chain Oyo Rooms. Budget hotel chain Oyo Rooms has raised $100 million round led by SoftBank Group with participation from existing investors — Greenoaks Capital, Sequoia Capital, and Lightspeed India. The company will use funds to implement new customer experience initiatives, build technology products, and extend its domination in the budget hotel segment.
Check Rise My Venture Startup Services : http://risemyventure.com/startup-services/
Check Rise My Venture Mentorship : http://risemyventure.com/mentorship/
The Gurgaon-based company’s round comes on the heels of its rival Zo Rooms, which announced an undisclosed amount of Series A round last month. Importantly, Oyo Rooms secured $25 million above VCs (except Softbank) in March this year.
While Oyo offers three-tap booking app and convenient payment channels for consumers, it empowers unbranded hoteliers to increase revenues by providing access to technology, operational best practices and a national ecosystem of vendors and sales channels.
Ritesh Agarwal, Founder and CEO of OYO Rooms, said – “We are at the forefront of solving a problem of lack of predictability of experience across hotels in the country. Our vision is to provide a standardized experience — the OYO experience to anyone, anywhere looking for a place to stay when not at home. We are excited to have global investors like SoftBank partner with us in this vision. Their experience in building innovative companies globally will bolster our efforts to grow into one of the world’s most trusted hotel businesses.”
Oyo Rooms currently has an inventory of 12,000 plus available rooms and operates across 70 Indian cities, including major metros, regional hubs, top leisure destinations, and pilgrimage towns. Besides the Web, the Sequoia-funded company has amassed over 500K app downloads across Android and iOS platforms.
At present, India is short of 150000 budget hotel rooms, and it’s an over $20 billion opportunity and growing at a high double-digit rate. A good portion of this demand is fueled by the emerging tier two and three cities where there is a severe dearth of quality accommodation.
Oyo Rooms broadly competes with Zo Rooms and Treebo, including new entrants like Gurgaon-based Awesome Stays and Zip Rooms amongst others.
Procuring inventory and upgrading infrastructure (of independent and budget hoteliers) are deep pocket game for players like Oyo Rooms. The massive $100 million round will help Oyo to board new properties aggressively and avoid hassle-free experience for consumers.
The budget hotel accommodation space is having a ball in India this year. So far, investors have pumped in over $165 million across five deals in the space this year. In February this year, budget accommodation marketplace StayZilla raised $20 million while Oyo and Treebo secured $125 million (including this round) and $6 million respectively this year.
Importantly, Oyo Rooms had earlier shown an appetite for expanding into neighboring Asian countries, and with Softbank backing, the company will be in a better position to hit global terrain quickly.
Ritesh Agarwal, the wunderkind :
1. Born in Bissamcuttack, a village in Rayagada district of Odisha, Ritesh started coding software when he was eight years old.
2. At 16, Ritesh was among 240 children selected to be part of the Asian Science Camp held at the Tata Institute of Fundamental
3. Research (TIFR) in Mumbai. The camp is an annual forum for pre-collegiate students, aimed at promoting discussion for the betterment of science in the region.
4. When he was 17, Ritesh authored a best-selling book; The Encyclopedia of Indian Engineering Colleges.
5. When he was 17, he became the youngest chief executive officer (CEO) in India. Of a company called Worth Growth Partners.
6. The same year he went broke. He spent several nights on the stairs leading to his flat in Masjid Moth in New Delhi because his landlord wouldn’t let him in before he paid his dues.
7. When he was 18, he founded Oravel, an Indian version of the online rental site Airbnb. The same year, he secured funding of Rs.30 lakh from Venture Nursery, an accelerator which brought together a bunch of storied investors to nurture start-ups.
8. When he was 19, Ritesh was selected for the Thiel Fellowship—a global contest in which he was the only winner from India. Started by venture capitalist Peter Thiel, the founder and former CEO of PayPal Inc., the fellowship is intended for students under the age of 20. It offers them $100,000 over two years (about Rs.2.7 lakh per month), as well as guidance and other resources, to drop out of school and create a start-up.
9. When he was 19, Ritesh keenly watched and learnt the spirit of entrepreneurship from Valley legends such as Thiel; Elon Musk, founder of Space X and Tesla Motors Inc., and Sean Parker, co-founder of Napster and founding president of Facebook Inc.
10. When he was 19, he chucked the idea of Oravel, the Airbnb clone, and changed his business to OYO Stays, a marketplace for branded budget hotels, just as Olacabs is a marketplace for cabs.
11. When Ritesh was 19, OYO Stays received funding of Rs.4 crore from Lightspeed Venture Partners (LSVP) and DSG Consumer Partners, Singapore, at a pre-money valuation of Rs.14 crore. Pre-money refers to the valuation of a company prior to investment or financing.
12. When he was 20, Ritesh finally gave up on landlords. The always suspecting ones, worried that he would bring girls to their flats. He moved into an OYO room in Gurgaon.
This article has been well researched by Rise My Venture team.