Room For Expansion

A look at how 2016 alumnus Ritesh Agarwal is carving a niche in the global hospitality market.

- Anuradha Raghunathan

Ritesh Agarwal began his entrepreneurial journey selling SIM cards while in the eighth grade in his hometown in eastern India. The 25-year-old college dropout now dreams of dominating the world’s budget hotel industry, spurred by an early endorsement from PayPal co-founder Peter Thiel and financial backing from Japanese billionaire Masayoshi Son.

Founded by Agarwal in 2012 when he was 19, Oyo franchises and leases budget hotel rooms pooled from independent property owners. The company has amassed 515,000 rooms, making it the world’s eighth-largest hotel chain by rooms under management, according to hospitality research firm STR.

To finance further expansion, Oyo has raised over $1 billion in funding—first from Son’s SoftBank in September for $800 million, and then Singapore’s ride-hailing giant Grab in December for $100 million and China’s ride-hailing major Didi Chuxing in February for $100 million. Last month, Airbnb also took a stake in Oyo for an undisclosed amount. This staggered round valued the Gurugrambased company at $5 billion, allowing Oyo to plan an expansion to tap Asia’s fast-growing tourism sector. Oyo will quintuple its rooms in the next four years to over 2 million—which would be more than the world’s largest hotel chain Marriott’s 1.3 million rooms. Oyo is tapping into a large and growing market, as the World Tourism Organization projects that tourist arrivals in Asia will grow by 66 percent to 535 million tourist arrivals by 2030, from 323 million in 2017.