OYO - ROOMS

Presented By –
Presented To –
Amar Singh (19249)
Prof Veena Kumar
Snehashis Kundu

06/07/2020 Group - 7 Oyo - Case Study 1

Oyo Rooms

■ Ritesh Agarwal the founder and CEO of Oyo Rooms was established in January
2013
■ Headquarter in Gurugram, Haryana
■ Oyo Rooms is currently operating 450,000 listings in 5,000 cities in India,
Malaysia, UAE, Nepal, China and Indonesia.
■ At present Oyo has over 13,000 franchised and leased hotels and over 450,000
rooms, adding over 64,000 rooms every month globally.
■ Oyo Rooms is India’s largest branded network of hotel

06/07/2020 Group - 7 Oyo - Case Study 2

Valuation of Oyo

• Ritesh Agarwal, purchased $2 billion in shares

from risk capital firms Sequoia Capital and
Lightspeed Venture Partners
• The fast-growing Indian hospitality business Oyo has
garnered a valuation of $10 billion
• Mr. Agarwal opted to extend his 10% stake to 30% via
a Cayman Islands company called RA Hospitality
Holdings, consistent with The Wall Street Journal
• SoftBank has also increased its percent ownership
as a part of this round, now owning nearly 1/2 the
corporate

06/07/2020 Group - 7 Oyo - Case Study 3

Fun Facts About Oyo Rooms
• Oyo Rooms stands for On Your Own Rooms

• In December 2019, an average of 750,000 guests chose to stay at an OYO

every night. They continued to delight our guests, with average ratings on
OTA (Online Travel Agency) platforms were 7.5+/10. 

• Oyo hosted over 180 million guests from 120+ nationalities in 2019.

• Oyo Application is among top 3 hotel booking Apps globally.

06/07/2020 Group - 7 Oyo - Case Study 4

Cont.
• Daily active user – 300,000 people

• Total rooms - 1.2 million under management

• Number of countries where present: 80 plus

• 3.8x YoY growth in revenue in Aug 2019 (vs Aug 2018)

• Number of Oyo application downloads: 10 million

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 Business Models of Oyo
• Books a part of hotel’s inventory beforehand.
• Organize those hotel rooms under their brand name – Oyo Rooms.
• These partner hotels provide standardized service to customers of those rooms
as decided in a contract with Oyo.
• Bookings are made through the Oyo Rooms website and mobile application

■ The main focus, is on quality of the service provided. Hence, to maintain the
name, they make the partners provide services at predetermined standards
while they make them more visible to their user base.

06/07/2020 Group - 7 Oyo - Case Study 6

 Aggregator Business Model
■ Oyo Rooms business model is a hotel aggregator model.

■ This aggregator model has certain characteristics:

• The firm organizes the unorganized businesses operating under their

domain.
• Make them work as their partners by signing of a contract and sell
their products under its own brand.

06/07/2020 Group - 7 Oyo - Case Study 7

OYO: Rise of a little giant
■ Oravel Stays Pvt. Ltd
■ Peter Thiel Fellowship, where Mr. Ritesh Agarwal was given $100,000 grant by
early Facebook investor and PayPal cofounder Peter Thiel
■ 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
■ Then OYO Stays received funding of about Rs.36 crore from Sequoia Capital
and LSVP at a pre-money valuation of $60 million
■ Oyo Raises $1.5 Billion At $10 Billion Valuation; To Focus On US Market(2019)

Group - 7 Oyo - Case Study

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 Market Strategy
• The most essential aspect while trying to make it big globally is to understand the market
and innovate accordingly
• Oyo believe localization is key to succeeding
• Oyo, follow a hyper-local strategy
• Every region cluster has a local leadership with full autonomy to make decisions required
to localise the product and build their own localised version of “OYO” while emulating the
best of the OYO model in India. This has helped us to understand what works well for each
market

For example, when Oyo entered the UK market, they realised that the market had immense
opportunity and demand in the mid-market category. So, they decided to enter with OYO
Townhouse to address that requirement immediately.

06/07/2020 Group - 7 Oyo - Case Study 9

 Different Business Model
Oyo Café
■ In Delhi, the coffee outlet, launched earlier this month, is
in the premises of the Townhouse in the market at Siri
Fort area. It started off as a takeaway and a delivery
service. The cafe is also listed on the food delivery app
Zomato.
■ The café not only caters to the guests staying in the
property but is open to all customers.
■ The company is following its room-pricing model for
cafes as well. Food items are competitively priced and
range between Rs 100 and Rs 250.

06/07/2020 Group - 7 Oyo - Case Study 10

 Cont.

Oyo Life and

Home
2019

Cloud Kitchen
2019
• Adarq
• O’Biryani
Weddingz
2018
Auto Party
06/07/2020 11
Merger And Acquisition
Acquiree Name Amount Year Sector
Danmica - Denmark $10M September 2. market's best and most user-
2019 friendly pricing tool to vacation
rental agencies.

Qianyu Islands – Mar 26, 2019 Qianyu Islands transforms

China traditional accommodation industry
with an internet-based way to fill
the market for urban mid-end
accommodation.

Innov8 is a Y- Combinator backed

Innov8 Coworking- $30M Mar 15, 2019 company that offers coworking and
India shared office spaces

06/07/2020 Group - 7 Oyo - Case Study 12

Cont.
Acquiree Name Amount Year Sector
The @Leisure Group is one of the
$415M May 1, 2019 largest players in the European online
Leisure Group market for accommodation rentals.

Novascotia Boutique Mar 18, 2018 Novascotia Boutique Homes is a

Homes Chennai-based service apartment
operator.

Weddingz – India 2018 Weddingz counts Singularity Ventures

and Sixth Sense Ventures as well as
Google India Managing Director Rajan
Anandan among its backers. It was
founded in 2015 by  Sandeep Lodha.

06/07/2020 Group - 7 Oyo - Case Study 13

Downfall of Oyo Rooms
■ “It’s a bubble that will burst,” said Saurabh Mukhopadhyay
■ 80 percent of Oyo’s employees had been at the company for less than a year,
so training has been a challenge
■ Huge pressures were put on company employees.
■ Some efforts to expand in countries like Japan have flopped
■ Sequoia Capital and Lightspeed Venture Partners, reduced their holdings.
■ “The culture is really very toxic”

06/07/2020 Group - 7 Oyo - Case Study 14

Cont.…

■ Lack of profitability-Room are given for as low as $4 a night in order to grab

market share.

■ Huge pressure from investors -SoftBank’s Vision Fund has so

far invested about US$1.5 billion in Oyo

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Current Scenario

■ Entering into luxurious hotel market

■ Employee layoff
■ India gross margin has been increased by 4.1%
■ Every night almost 500,000 heads rest on a pillow in OYO

Group - 7 Oyo - Case Study

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Oyo Travelopedia

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