Here is a story of a run-away kid who emerged as a millionaire years later. Dropping out of college to pursue his dreams is indeed a quality of a risk-taker. People without formal education are usually looked down upon. However, Ritesh Agarwal proved to be a success.
Ritesh Agarwal is a 27-year-old billionaire. The CEO and founder of OYO Rooms were born on 16th November 1993 in Bissam Cuttack, Rayagada; he became the world’s youngest billionaire in 2020. He was brought up in Titilagarh. Ritesh schooled at the Sacred Heart School in Rayagada, Orissa.
As a fun fact, Ritesh Agarwal can speak four different languages: Telugu, Haryanvi, Mandarin, Bengali, and Odia.
Ritesh Agarwal is a recipient of the Business World Young Entrepreneur Award.
Ritesh’s early years
He loved having fun and learning when he was younger. But he had unconventional ways of studying and learning than other kids. When he was eight years old, he began coding.
He enjoyed played around with the computers. He gained a keen interest in software while he was still young. His curiosity grew towards computers. He borrowed his elder brother’s books for programming and learned basic languages such as Pascal and BASIC. He learned technical skills and terms from Google too. Furthermore, when he reached 10th grade, he realized he wanted to do coding for a living.
“My childhood was similar to any small-town kid’s. I was raised in a middle-class family in Rayagada. I was good at my studies and played sports. The only difference was I had big dreams even as a child – I always knew I wanted to be an entrepreneur.”
– Ritesh Agarwal
Development of interests
When Ritesh Agarwal was 13 years old, he used to sell SIM cards for pocket money.
In 2009 when Ritesh was 15, he left for Kot to join IIT. He figured that Kota was the best place to learn to code. Ritesh Agarwal attended Bansal Tutorials that his dad enrolled him in. In his free time, he would travel a lot.
When Ritesh turned 16, he was chosen among 240 children to be a part of the Asian Science Camp. The camp was held at the Tata Institute of Fundamental Research (TIFR) in Mumbai.
The camp was aimed at pre-collegiate students. At that time, Ritesh had to travel a lot. He traveled by train to Delhi and stayed at odd bed and breakfast (B&B) places. Ritesh also attended conferences and events to meet entrepreneurs. However, Ritesh could not afford the registration costs, and therefore, he would often sneak in.
In fact, Ritesh recalled a teacher who taught him programming in one of his interviews.
“He was an engineer by education and had shifted to Rayagada to be with his family. he was the first person to teach me the importance of perseverance. I failed many times, but he never gave up on me”, he said.
This was when the light bulb moment occurred. He thought of a way to fill the gap.
In 2011, he graduated from St. Johns Senior Secondary School and moved to Delhi for college.
Life after school
Mr. Ritesh Agarwal apparently skipped college. He doubted his own abilities to excel in college or work for someone else. Therefore, he decided to come up with his own business.
“I knew if I had gone to college, I would not have done well. And then my family would hate me. So I felt if my family were to hate me anyway, I would rather do what I feel very excited about!” he said.
Ritesh Agarwal comes from a middle-class family. The family runs a small local shop in Southern Orissa. He knew he had to do something, or he would end up overseeing the shop. He wanted to do something exciting that would make him happy to work on every day and feel motivated.
Ritesh worked for small business enterprises (SMEs) and attempted to increase their sales. Moreover, it was only his second venture. He began achieving success already but slowly.
Ritesh moved to Delhi in 2011. He thought of beginning something of his own. Moreover, he prepared for his SAT examinations as he wanted to move to the United States for further education.
He had would have pocket money of around 15,000 Indian Rupees a month. Furthermore, he also had savings in his Kota account.
However, SAT never happened, unfortunately. Therefore, he spent his time reading about business start-ups, entrepreneurs, and Airbnb. He also met a few entrepreneurs during his free hours.
Later, Ritesh Agarwal joined the University of London – India campus. However, after three days of joining the university, he decided to leave as he was passionate about becoming an entrepreneur quickly.
Ritesh as an author
On the 1st of January 2011, Ritesh Agarwal published a book called “Indian Engineering Colleges: A Complete Encyclopedia of Top 100 Engineering Colleges”. G.K. Publishers (P) Ltd published the book.
The book became massively popular. It sold out in Flipkart and Amazon. Moreover, the tutorials also had this book, and his picture was on the cover of the book.
Moreover, Ritesh also wrote a book called “Kaleidoscope.” The book has 25 award-winning short stories. SpringTide, an online contest, nominated the stories.
The beginning of Oravel Stays
In 2012, Ritesh began his first venture – Oravel Stays!
Oravel Stays! was inspired by the way he felt and saw that the budget hotels in India did not quite meet the basic need of a budget traveler. Therefore, he capitalized on this chance.
He secured 30 lakhs of Indian Rupees (around $39,000) from VentureNursery to fund his business. VentureNursery is a firm that brings together investors to nurture start-up businesses.
Ritesh Agarwal later presented the idea at Thiel Fellowship. Thiel fellowship is a global contest intended for students under 20 years of age to present their business plans. At this time, he was 18 years old. Ritesh emerged as a top ten winner and received 2.7 Lakhs Indian Rupees ($100,000). The program is initiated by Peter Thiel, co-founder of PayPal and Facebook investor.
Ritesh decided to go ahead with his business plan. However, things did not go as plan as the business model he designed did not seem to be picking up.
Moreover, Ritesh Agarwal approached Manish Sinha of Gurgaon-based Cinnamon Stays as their co-founder. Unfortunately, Manish Sinha eventually had to quit Oravel.
Ritesh later tried to replicate the AirBnB model. However, this did not work as planned as Oravel was unable to pick up and gain substantial transactions.
The billionaire did not give up despite the hurdles. He decided to go back to the drawing books and think about how he can fill in the gap. Ritesh Agarwal then realized that finding a good, affordable, and “available” hotel was hectic for almost every traveler. Mr. Agarwal realized that most travelers end up staying in hotels that do not provide good food and services, thus killing the traveler’s entire trip.
Ritesh remembered the issues he faced when he traveled. He recalled the times when he spent a lot of money for a crappy place. Ritesh decided to create an online social community to gather information about all the good places one can stay in on one platform.
Creation of OYO Rooms
In 2013, Ritesh re-launched Oravel Stays! to OYO Rooms. OYO stands for On Your Own. He aimed at creating India’s biggest chain of young, efficient, standardized rooms. Ritesh intended to build a unique chain of no add-on rooms that might not have gyms, spas, etc. He decided to create rooms that will live up to the basic standards and expectations for prices that are low like never before.
OYO Rooms reached out to prospective hotels or hotel owners first. OYO’s team would reach out to them to inspect if the hotels met their expectations. The team audits the hotel to gain an understanding of the changes that would be required to make the hotels match OYO standards. The team aimed at sharing the same standards they want to maintain with the hotels.
Furthermore, Ritesh Agarwal faced mixed emotions from his family and friends towards his idea. However, that began changing with time.
Once OYO launched, Ritesh Agarwal got on board with Bhawna Agarwal, who was the former Chief Executive Officer at SeventyMM. Bhawna Agarwal shared critical business advice with Ritesh.
Ritesh went ahead and collaborated with several hotels. With the collaboration, they offered rooms to their customers. The plan worked. The demand increased over time. The OYO team raised from two to fifteen people to twenty-five employees.
Growth of OYO
In 2014, OYO Rooms raised 4 Crores Indian Rupees ($500,000) from Lightspeed Venture Partners (LSVP) and DSG Consumer Partners. In addition to that, at a pre-money valuation (valuation of a company prior to investment or financing), OYO Rooms raised 14 crores of Indian Rupees ($1,800,000).
OYO Rooms was now grossing at almost 1 crore rupees ($100,000) per month.
The company became India’s first technology-driven network of standardized branded budget hotels. Moreover, OYO Rooms expanded broadly and was present to more than 350+ hotels. Furthermore, it was available in 20 cities around India, offering more than 4000 rooms. The cities include Gurgaon, Bangalore, Mumbai, Delhi, Puna, Hyderabad, Jaipur, Pune, and Goa.
Ritesh launched the OYO Rooms mobile apps, which were downloaded more than 160,000 times. At that time, 20,000 bookings were already made through the app. On Google Play Store, it was listed as the top three apps under the ‘Travel and Local’ category.
In 2015, OYO Rooms recently raised Rs 650 crore ($100 million) in funding from Japan’s Soft-bank.
In an interview with EconomicTimes, Ritesh said he encourages students to drop out.
“Hopefully, in the next few years, we will have more high-quality dropouts. When I go to colleges for talks, I encourage the students to drop out.” Ritesh said.
In addition to that, Ritesh revealed that his two big inspirations are Bill Gates and Bhavish Agarwal. When the interviewer asked who his inspiration was, he said, “Bill Gates. He knew when was the right time to leave and share his wealth with real people in the world and impact their lives. I find Bhavish Aggarwal inspirational. His entire team is very helpful to us.”
OYO Rooms in China
In 2018, OYO tremendously grew in China. At that time, OYO Rooms managed 180,000 rooms across 4,000 hotels in China.
OYO Rooms then valued at $5.5 billion.
In 2019, Ritesh Agarwal’s net worth grew to a million dollars.
Furthermore, in an interview in 2019, Ritesh revealed his secret to success. He said that perseverance is important for every entrepreneur, and that was his secret.
“There is always light at the end of the tunnel,” he said.
“Way too many people give up early without realizing that impactful or big things take time. It’s important to keep putting in the effort. Keep at it.”
– Ritesh Agarwal
Donald Trump praised Ritesh Agarwal.
During the former United States President Donald Trump’s visit to India in 2020, he praised Ritesh Agarwal.
Donald Trump called Ritesh Agarwal a ‘brilliant businessman.’ Additionally, Mr. Donald Trump asked Ritesh how many hotels he has. Ritesh informed him that he has 330 within India and 40,000 hotels worldwide.
“That’s fantastic. I actually know of your company. Good Job,” Donald Trump praised.
In February 2020, Ritesh earned the title ‘the world’s youngest billionaire.’
Controversies Ritesh Agarwal faced
In March 2019, Ritesh Agarwal faced a controversy. Apparently, hotel owners in the United States rebranded under the OYO name in exchange for compensation and guaranteed revenue. However, they left out the crucial detail that OYO Rooms is unauthorized to operate franchise business in the state of California.
Consequently, California regulators fined OYO $200,000 in March 2019. Moreover, OYO Rooms received a cease-and-desist order from Washington after regulators found OYO made offers to many hotel managers and owners with no proper registration in accordance with the law.
Similarly, during October 2019, 10,000 hotel owners in India claimed OYO took up half or more of the revenues through fees that are undisclosed at that time. The owners filed a case against Ritesh Agarwal, claiming it was a fraud.
Later in September 2020, a Chandigarh-based businessman filed a case against Ritesh Agarwal for alleged fraud. He claimed Ritesh was a fraudster and filed a case on criminal conspiracy and cheating.
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