Indian entrepreneur Ritesh Agarwal may have netted millions of dollars in venture capital funding at the tender age of 24, but his mother still worries about him.
“She believes, ‘If there’s no college degree on your biodata [résumé], how do we get you married?” I try to allay her concerns once in a while,” Agarwal told Business Insider over the phone.
Agarwal has bucked several Indian stereotypes of success. The youngest of four siblings, he grew up on the Orissa-Andhra Pradesh border in eastern India. He began to deviate from his family’s expectations when he moved to Delhi and dropped out of college after just three days to pursue his dream of becoming an entrepreneur.
“As I grew up, I was born and brought up with a view of, if you can get an engineering degree, getting a job is remarkably easy and that’s the ambition you should have,” Agarwal said. “I had three other siblings, and I was the youngest of the lot. So I guess being the black sheep was ok.”
At the age of 19, Agarwal was selected to join the Thiel Fellowship, a two-year entrepreneurial accelerator set up by PayPal cofounder and Facebook investor Peter Thiel.
A condition of the fellowship is that participants drop out of college. In return, they are given $100,000 in funding and access to Silicon Valley’s brightest minds. Agarwal says he was already a Thiel fan, having watched Wallace Langham’s portrayal of the investor in “The Social Network,” the fictionalised film account of Facebook’s origin story.
Two years later, Agarwal had netted $100 million from investors including SoftBank for his startup Oyo, a network of budget hotel rooms. His earlier funding round of $25 million was the biggest tranche of cash a Thiel Fellow had ever received.
Agarwal won the SoftBank funding before the Japanese conglomerate announced its Vision Fund, a $92 billion vehicle for investing in long-term tech companies. Since then, SoftBank has added Uber and WeWork to its portfolio. Masayoshi Son, SoftBank’s CEO, has talked up the promise of Oyo, praising its exponential growth and describing it as a “next-generation company.”
One of the benefits of being part of the SoftBank portfolio is the ability to rub shoulders with some of the most high-profile entrepreneurs in the world. Previous media reports have said that Son instructs his founders to treat each other like family, regularly meets them in person, and holds dinners so they can all meet each other.
Agarwal, who refers to Son by his Japanese title “Son-san”, said being part of the cohort was as valuable as the money and advice.
“It’s not just sharing that feedback,” he said. “It’s about working with us, and the broader family of the Vision Fund, which has top companies in every segment worldwide, to help us gain knowledge, and how to share our proprietary knowledge… that’s the group you become part of.”
Agarwal points to Didi Chuxing cofounder Cheng Wei, WeWork CEO Adam Neumann, and another entrepreneur from an as-yet-unnamed portfolio startup as particularly useful members of the cohort.
Didi Chuxing is a Chinese conglomerate whose business comprises ride-hailing, artificial intelligence, and driverless cars. WeWork is the buzzy property startup that turns drab office spaces into bright, “community-oriented” workspaces.
“Didi, the entrepreneur at the helm has created such a great platform for people across China, I’m learning from [him] how they executed at great scale, and how they operate at a great scale in China, it’s very inspirational for us,” Agarwal said.
“I think WeWork has of course executed very meaningfully and Adam [Neumann] is one of those entrepreneurs who has understood physical operations… he’s a clear hero in terms of how you create a large physical business across so many cities.”
At times, Agarwal sounds quite WeWork-ish when talking about the mission of Oyo, which has just expanded to the UK as its first European market outside of Asia.
“As a responsible consumer brand, we have not just built for the short term, but build for longer-term relationships,” he said.
The way Oyo works is by partnering up with smaller hotels, turning them into franchisees, and giving them a makeover. That hotel is brought up to a standardised level of decor and service, and its rooms are offered through Oyo’s app for travellers on a budget. The promise for consumers is better quality budget rooms. For hotel owners, it’s an increase in bookings, and a chance to hand over some of the admin.
Oyo says it has more than 8,000 employees across Asia, including in India, China, and Malaysia. Agarwal would not disclose the company’s financial performance, but SoftBank highlighted the company’s fast growth in a June investor presentation, saying that the company had increased the number of its hotel rooms in India alone 96-fold. Oyo says its app has been downloaded more than 14 million times.
Agarwal admits to some “good and bad days” from Oyo’s earlier, fast-growing chapter. But, he said, the company is now thriving in markets where it originally had difficulties, such as Malaysia.
“We hope to do that in every country we operate in, believing in that as a home market, rather than just one more market,” he said. “That’s our thesis, to operate in a few places and make them home, rather than operate in many places and not have significant ownership.”