In the lockdown months, business trips to big cities by owners of small enterprises and household ‘staycations‘ at hill stations and seaside cities helped hospitality startup Oyo stay afloat

Throughout the lockdown months, business trips to big cities by owners of small enterprises and household ‘staycations‘ at hill stations and seaside cities helped hospitality startup Oyo stay afloat in spite of the the pandemic, says founder and chief govt officer Ritesh Agarwal.

Speaking at a panel discussion on the Prarambha: Startup India International Summit. Agarwal said that Oyo’s home revenues “was down to nothing” in the preliminary months of the Coronavirus-induced lockdown that crippled the journey and hospitality business in India.

“As you can imagine, the hospitality sector got impacted severely due to supply-side constraints as well as customer constraints. Hotels were all shut down and revenues went down to almost zero in India,” claimed Agarwal.

The panel discussion titled ‘Building a Unicorn’ was moderated by Sanjeev Bikhchandani, founder of Info Edge India. The discussion also featured chief executives of startup unicorns BigBasket, Zerodha and Zoho together with Agarwal.

“Initially our response was to try and make sure whatever demand existed our hotel owners continued to receive it…We saw some recovery in June and July. We spoke to over 5000 customers and thousands of small hotel owners to understand what’s going on,” averred Agarwal.

“We learned a few things,” he added. “Business trips by small and medium business owners, families and employees moving to holiday homes during lockdown these were some of the trends that we caught on. We started redesigning our supply to focus on these trends. We also simplified our contracts from more complex minimum guarantees to straight through revenue sharing models,” he added.

The firm’s Indian business revenues have now recovered to 60-65 per cent whereas the margins are at 85-90 per cent, the 27-year old founder stated. Agarwal is among the many young entrepreneurs on the planet to personalise a business value over billion-dollars which within the startup ecosystem is colloquially termed as a “unicorn”.

The Gurgaon-based startup’s determination to restructure business throughout peak pandemic which led to lay-offs and furloughs for a number of hundred staff in India and overseas, was among the many “toughest decision” the younger govt needed to take, he stated.

“We were constantly monitoring our cash positions and also making sure active engagements with employees because of how anxious everyone was,” he stated, recalling the administration challenges in navigating via the early days of the pandemic. “We had to make substantial restructuring decisions – perhaps the hardest in my career.”

When requested if there are plans to take his firm public, Agarwal stated: “At some point of time we will. This is primarily because of the external capital we have raised,” with out specifying a timeline.

The Softbank- and Lightspeed-backed startup is among the many most valued in India regardless of going through the brunt of the coronavirus and public backlash even earlier than the pandemic resulting from alleged malpractices that concerned placing pretend resort names on its discovery platforms to pump valuation.

“This might be true for a lot of businesses but every two years these cycles come where you speak to people about Oyo, they’d say that the business is killing it, and then people would say there are troubles. In our company we always think we are learning from customers and going at it consistently,” he stated.