CEO Ritesh Agarwal seems to have assembled a 14-member leadership team that can take the company to an IPO and beyond
The senior leadership behind Agarwal has an average tenure of eight years in the company
There have been reshuffles at top undoubtedly, but a bulk of top management continues to stick close to Agarwal and are actively involved in leading the company
One of the more curious things about Indian startups is the lack of information about the key people leading the operations behind big-name founders and CEOs. Take OYO
and Ritesh Agarwal, for instance.
Everyone knows the hospitality unicorn is led by founder and CEO Agarwal, but the senior leadership behind has an average tenure of eight years in the company as against Agarwal’s tenure of 11 years. With everything that’s going on at OYO — from a temporary hiatus in its IPO plans, to a critical fundraise, to its first profitable fiscal year, and yet another overseas acquisition — it’s only right to take a peek behind the curtain and see who’s leading the turnaround at OYO.
Some interesting insights about people at power in OYO:
- Seven of the 14 people — of the top brass at OYO are IIT graduates, with three getting their degrees from IIT Kharagpur
- Five CXOs worked with McKinsey & Co before joining OYO
But it would be best to set the context of how OYO turned it around before we look at the people driving this change.
OYO’s net profit for FY24 stood at INR 229.57 Cr in stark contrast to a net loss of INR 1,286.51 Cr in FY23. As we reported in July 2024, the hospitality startup’s turnaround recipe was built on these key pillars:
- Business Model Tweaks: The startup ditched its minimum guarantee price model and instead adopted a revenue sharing model after the pandemic, which immediately reduced costs. The company also culled its low quality hotels and those that were not seeing traction. In FY23, the hotel count decreased from 12,000 to 8,000, according to sources we spoke to
- Move Towards Premiumisation: Premium category is driving revenue growth for OYO as the startup zeroed in on key properties and improved their visibility, while also launching new brands. The branded and organised hotel segment in India is seeing decade-high numbers, which OYO is cashing in on. In April 2024, OYO launched the luxury hotel chain brand ‘Sunday’ in a JV with SoftBank, targeting Tier 1 and Tier 2 cities, and at the same time, expanded the OYO Palette chain of premium hotels and resorts
- Tapping New Categories, Customers: While spiritual tourism and sports tourism raked in revenue for OYO in FY24, another big change has been its move to attract first-generation hotel owners, who do not have the traditional baggage and are also positioning themselves in the premium categories for hospitality, just like OYO wants to
- Capturing Market Share Overseas: Like in India, OYO removed hotels from its overseas inventory as well as its overseas presence. From 80 geographies in 2021, the company is currently present in 35 today. It is doubling down on the revenue generating geographies like UK and US, while scaling back in China. It’s also acquiring companies — like Paris-based Checkmyguest for $27.4 Mn — to shore up relatively weaker markets like Western Europe
And now to the people who have brought about this change.
OYO’S Hidden Secret: Leadership Retention
Like any other startup, OYO too has faced an attrition of some CXOs in the past two years. First, there was the great resignation in the pandemic years, and then came a number of strategic changes in OYO which required new leaders to take over.
However, one thing is amply clear — CEO Agarwal has managed to retain a core group of function heads for several years, which creates a wealth of institutional knowledge that can be super critical for companies to survive tough times and transitions.
OYO did resort to cost-cutting and laid off hundreds of employees in late 2022, but the top brass remained in place to help the company tide over challenges.
There have been reshuffles undoubtedly — chief marketing officer and former India CEO Rohit Kapoor and former head of European business Mandar Vaidya are two examples — but a bulk of the top management comprises long-time OYO executives.
Other key exits in recent months include Ankit Gupta, the CEO of India operations who quit last year and former CFO Abhishek Gupta who moved to an advisory role in 2024.
While the CMO position is still vacant, Gautam Swaroop took over the reins from Vaidya in 2023, and was elevated to CEO of the international business. Swaroop has been with OYO since 2019.
His elevation has worked in terms of business performance. OYO only saw a marginal 1.3% YoY decline in FY24 revenue, but this would have been significantly worse had it not been for the international business.
Revenue from outside India grew 2.5% from INR 4,081 Cr to INR 4,185 Cr in the fiscal year, while the India revenue shrank by 12%.
Another vital role is that of chief financial officer (CFO) Rakesh Kumar, who was elevated to the position in December 2023.
While Agarwal is leading talks with investors regarding a $100 Mn fund infusion in recent months, sources indicate that Ankit Tandon has been doing most of the groundwork, and the CFO is also instrumental in securing the right terms for the $450 Mn debt refinancing.
The latter is critical for OYO to make another bid for an IPO.
With the post-pandemic and strategic restructuring completed in the past year, CEO Agarwal seems to have assembled a 14-member leadership team that can take the company to an IPO and beyond.
Once the debt refinancing is settled, Agarwal and co will look to capitalise on the momentum set in the past year.
The IPO is undoubtedly a big motivation for the team leading OYO. The company’s ESOP pool is worth over $1 Bn and covers over 80% of the employees. A successful outcome in the IPO would not only be a great payoff for OYO’s biggest investor SoftBank, but a massive wealth creation opportunity for its employees.
Edited by Nikhil Subramaniam
