OYO, one of India’s top startups was one of the companies that took the worst hit from the coronavirus pandemic, as lockdowns around the world prevented people from traveling. However, as the lockdowns are being lifted and the situation has started to come back to normal, Oyo is also recovering better than most. According to the founder and Group CEO Ritesh Agarwal, the company has around USD 1 billion in cash to fund its operations.
In a fireside chat with Rohit Kapoor, chief executive of Oyo India and SA, and Troy Alstead, a board member Ritesh Agarwal said that the company has had a strong recovery over the last few months.
He said, “At the same time, we’ve been very disciplined in making sure that we can respond to the crisis in a good way to try and ensure that we can come out of it at the right time.”
He also added, “… the company has a good amount of cash, we have continued to hold on to close to a billion dollars of cash… at the same time, we have been very disciplined in making sure that we can respond to the crisis in a good way to try and ensure that we can come out of it at the right time.”
This revelation would be a huge reassurance to the people working for the company and also for its hotel partners. Back in April, at the peak of coronavirus pandemic in India, the company eliminated over 5000 jobs and had also reported that the pandemic had cut its revenue and demand by more than 50%. For the financial year that ended on March 31, 2019, the company reported a loss of $335 million on $951 million revenue globally and earlier reported that it would cut down spending.
Ritesh Agarwal also said, “Together globally, we were able to get to around 85% of the gross margin dollars of our pre COVID levels. This I can tell you were extremely hard. But in my view was probably only possible because of the efforts of our teams in each one of the geographies.” He also added that in recent months Oyo Vacation has been critical for businesses and has been able to deliver “packed” hotel rooms, according to a TechCrunch report.
He also said, “our view is that our management”s focus is to make sure that we give a very well designed, IPO-ready company, available for our shareholders and our board members to make the right decision.”
While he did not provide any timeline for the company to go public, his statements signify that it is definitely in the cards.
Troy Alstead, a board member who previously acted as the chief executive officer of Starbucks also added in saying, “I think that OYO is made up of a combination of assets, its hotels, its homes, its vacation homes. That’s unique, I think in the industry in the category, I think it makes it probably a little more challenging sometimes for people externally to measure and compare and benchmark a unique portfolio company like this. But I’d also tell you, I think that makes OYO resilient. It makes OYO balanced for the future. It gives OYO several sorts of vertical opportunities to address both customers needs at any time, whether it be a hotel or a small hotel or a vacation home.”
“And it also gives opportunities and expands that interaction in a good healthy way with the property owners, with the partners, who have an opportunity depending on what asset type they have partnered with OYO in different ways, and also to have the access to a technology platform and continued investment in that innovative platform for customers. So all those things, I think a balanced portfolio, a technology platform, a heavy focus on putting the customer first, putting the business partner first — all those things, in my view, are what positioned OYO for the future.”
