Just a month after it became India’s latest unicorn (a startup valued at over $1 billion), hotel-room aggregator OYO has hired a professional with an ace track record to head its business in its largest markets—India and Nepal.
On Nov. 15, the Gurugram-based company said it has appointed Aditya Ghosh CEO for the two markets. Most recently, Ghosh was president at the budget aviation firm IndiGo Airlines, one of the few profitable companies in the industry. He resigned from the company in April with plans to start a new venture.
“As we grow our business, we feel it is essential to continue to invest in building one of the most influential leadership teams and bringing in professionals with an entrepreneurial mindset and from diverse backgrounds that can help lead the next wave of growth at OYO Hotels,” said Ritesh Agarwal, founder of OYO.
Following Ghosh’s appointment, Agarwal, who’s held that position since its inception in 2011, has been elevated as group CEO of OYO Hotels and Homes, which includes the company’s businesses across India, China, Malaysia, Nepal, the UK, UAE, and Indonesia.
OYO has also now joined the ranks of the few Indian unicorns where founders have made way for an external CEO with the skills required to lead a maturing company. OYO’s announcement comes just days after India’s largest homegrown e-commerce firm, Flipkart, announced the exit of its last-standing co-founder, Binny Bansal. The Walmart-owned company is now headed by Kalyan Krishnamurthy, who joined it in 2017.
“A seasoned professional like Aditya (Ghosh) will bring on board experience of scaling up effectively. Generally, a young founder is not necessarily equipped to handle scale and global expansion,” said Sanchit Vir Gogia, chief analyst and CEO of Greyhound Research.
Ghosh, whose appointment at OYO is effective from Dec. 01, will report to Agarwal. While Ghosh will be the head for day-to-day operations, Agarwal will be a “hands-on” group head, a company spokesperson said.
The all-season man
A law graduate from Delhi University, Ghosh began his career with a legal firm, J Sagar Associates where IndiGo’s parent, InterGlobe Enterprise, was his client. He was absorbed by IndiGo in 2007, where he was promoted as CEO the very next year after Bruce Ashby resigned.
His stint was instrumental in turning IndiGo into India’s largest and most profitable airline.
It was profitable for nine consecutive years in his decade-long stint. Last month, it posted a quarterly loss for the first time since it was listed on the stock exchange three years ago. Ghosh also led IndiGo’s international expansion, which now contributes about 20% to the airline’s overall revenue.
Ghosh’s leadership will be crucial for OYO not just in turning it profitable but also in terms of global expansion.
“Having built a company ground up, and driven its growth and expansion, I know that very few organisations have managed a global reach—seven countries, 500+ cities, 12,000+ franchised and leased hotels, and 330,000 rooms—in such a short span, and the brand loyalty that OYO Hotels enjoys,” Ghosh said in a statement released by OYO.
Unicorn OYO
Ghosh’s appointment at OYO comes after Japan’s SoftBank led an $800 million funding round for the company through its Vision Fund in September, which catapulted the five-year-old startup into the unicorn club. The funding reportedly valued OYO at about $5 billion, a major jump from its earlier valuations of about $900 million a year ago.
The company has raised up to $1.5 billion to date from investors ranging from SoftBank and Sequoia Capital to Lightspeed Venture Partners and Sunil Munjal’s Hero Enterprise.
OYO has been on a hyper-expansion mode. In 2016, it made its maiden overseas foray with Malaysia; now it has a presence across seven countries.
The company has also been experimenting with new business verticals. For example, in October, it launched OYO Living, a long-term rental product similar to NestAway. Earlier this year, the company also unveiled its premium stay option: OYO Townhouse.
For the financial year 2017, OYO’s operating revenue increased seven-fold to Rs125 crore ($174 million) from Rs17 crore in 2015-16. Its loss from continuing operations stood at Rs 330.97 crore, lower than Rs496.31 crore the previous year, owing to reduced expenses.
Now, the company is working on a leadership structure that would help it sustain and penetrate multiple verticals and geographies.
After announcing Ghosh’s appointment, OYO told Quartz that it will take a decision on the leadership of the remaining markets in due course. Currently, they are being handled by country managers under Agarwal’s leadership.
“The structure is still evolving,” a spokesperson said.