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net4news · 4 years ago

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byju's: An $8.8 billion IPO wave sweeps across India as startups soar - Net4News

NEW DELHI: The market for initial public offerings (IPO) in India is turning into a feeding frenzy. The amount of money raised in IPOs this year has reached $8.8 billion, already surpassing the totals of the past three years though it’s only August. At the current pace, 2021 would exceed the all-time record of $11.8 billion. Founders, bankers, lawyers and advisers are racing to cash in on fervent demand for fresh public offerings. The catalyst, in a word, is Zomato Ltd. The food-delivery startup went public in July and, despite deep losses and mediocre prospects for profitability, shares have soared more than 70%. That has fueled the idea that similarly profit-challenged startups could find a strong reception from investors. Oyo Hotels & Homes Pvt, a long-troubled lodging giant, started work last week on its draft prospectus and aims to file in October, according to people familiar with the matter. The ride-hailing leader Ola and fintech startup Pine Labs Pvt have also begun talks with investment bankers, according to other people aware of the situation.

"India is definitely the star of the show – that is the new phenomenon,” said Udhay Furtado, co-head of Asia equity capital markets at Citigroup Inc, the lead foreign bank in Asia IPO league tables so far this year. “Zomato really opened people’s eyes to India and now we have all these privately funded unicorns coming to the public market.” The performance of recent IPOs, such as Zomato, has fed the enthusiasm. Newly listed Indian stocks are beating the benchmark Nifty 50 Index by more than 40 percentage points this year, the biggest gap in seven years. The country’s three most valuable startups are all considering or planning IPOs. Paytm, the country’s leader in digital payments, filed its preliminary offering documents, aiming to raise as much as Rs 16,600 crore ($2.2 billion). If it reaches that level, the IPO would be the country’s largest debut ever, eclipsing the more than Rs 15,000 crore raised by state-owned Coal India Ltd. Flipkart, the e-commerce giant controlled by Walmart Inc, is aiming for an IPO as soon as the fourth quarter, Bloomberg News has reported. Byju’s, a digital education startup valued at $16.5 billion, is in early discussions about an IPO and bankers are encouraging the company to take advantage of the red-hot market, according to people familiar with the matter. Byju’s is in the midst of absorbing several substantial acquisitions and is likely to hold off on any listing for at least a year. Such is the hysteria that PhonePe, a payments startup Walmart acquired as part of its Flipkart deal, is considering shifting its incorporation back to India from Singapore to capture local investor attention, according to two people familiar with the matter who did not want to be identified. The regulatory upheaval in China has also sent investors looking for promising opportunities in countries with more predictable government policies. “If global investors have to pick an emerging market, the balance is tilting in India’s favor after the regulatory action in the China internet ecosystem,” said Pankaj Naik, executive director and co-head, digital & technology at consultancy, Avendus Capital Pvt. “India may not be as attractive as China in the broader economic sense but it’s looking like a safer bet.” Oyo Hotels, PhonePe and Pine Labs did not respond to emails seeking comment. India’s success with startups has long lagged beyond that of the US or China. But this year has been something of a breakout. With the Covid-19 pandemic, many consumers have turned to online services for grocery deliveries and other e-commerce, along with math tutoring and medical diagnoses. Revenue has surged. Global investors like Fidelity Investments, KKR & Co and Singapore’s Temasek Holdings Pte have pumped money into India, while China’s crackdown on private enterprise has spooked financiers. The value of venture investments in India reached $7.9 billion in July, surpassing China for the first time on a monthly basis since 2013, according to researcher Preqin Ltd. That kind of financing has helped India build a substantial blessing of unicorns, startups worth $1 billion or more. There are more than 35 such companies, led by Byju’s, Paytm and Oyo, according to CB Insights, suggesting dozens more could go public in the years ahead. Whereas the biggest IPOs of the past were conglomerate or state-backed companies like Coal India, startups are now leading the surge.

"Many of India's technology unicorns have huge growth opportunities ahead of them," said Devarajan Nambakam, a managing director at Goldman Sachs Group Inc. in Mumbai. "Everything is relative and given the vast opportunity, India’s macro fundamentals, political stability and overall investment policies make it one of the better destinations for global investors.” Investment banks such as Goldman, Morgan Stanley, JPMorgan Chase & Co and Citigroup Inc are at the forefront of multiple discussions, the people said. Mumbai-headquartered Kotak Mahindra Bank’s investment banking team is also part of several of IPO conversations, the people said. Oyo, a SoftBank Group Corp-backed startup with a history of troubles, is one of the more surprising IPO candidates. The hotel-booking company, run by 27-year-old Ritesh Agarwal, botched a global expansion with overly aggressive targets and then was hammered by the Covid-19 pandemic. Last year, it cut its workforce, furloughed thousands and slashed compensation and marketing as it retreated. But the brutal overhaul allowed Oyo to survive as people stopped traveling and now bookings are recovering in Europe, the US and parts of Asia. Agarwal, in an interview with Bloomberg TV, said the coronavirus pandemic hit Oyo like “a cyclone” with business falling 66% in 30 days. But the company made difficult changes to focus on the technology and services most valuable to its hotel partners. The startup recently secured a $660 million debt financing from global investors to service its existing loans. Work began this week on Oyo’s draft prospectus with the goal of filing with regulators within the next 10 weeks, said a person familiar with the developments. Two banks, Kotak and JPMorgan, have already been selected and Citi is close to being added to a lineup that’s likely to grow. The timing, size and blend of primary and secondary shares have yet to be decided, multiple people said. Agarwal declined to comment specifically on IPO plans in his interview. “We are already operating like a public company, when we go public is up to the board,” he said. If Agarwal does test the public markets, he will have plenty of company. Beauty retailer Nykaa filed its initial offering documents this month for a share later this year. API Holdings, the owner of the country’s largest online pharmacy PharmEasy, is targeting an IPO of more than $1 billion with plans to file initial documents by mid-October, according to people familiar with the matter. Pine Labs, a fintech startup that operates in India and parts of Southeast Asia, is being courted by bankers who claim it could reach a $10 billion valuation, according to a person with knowledge of the discussions. It was last valued at $3 billion, according to CB Insights. “Indian public market investors have shown that they do indeed value the role of disruption and growth,” said Vani Kola, founder and managing director of the venture firm Kalaari Capital. “We will see hundreds of such IPOs over the next decade.” Source link Read the full article

#Businessnews #byjuowner #ByjuRaveendran #byju's #IndiaIpoboom #IndiaIPOmarket #IndiaIPOwave #indiastartups #IndiastartupsIPO #zomatoIPO #zomatoltd

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apnajobs · 4 years ago

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Which are the top companies to work for in Delhi?

Looking for a job in Delhi but confused about where to apply? Check the list of top companies in Delhi to work for.

Delhi is not only the national capital but also the centre of innumerable job opportunities in variety of sectors. While searching for a job in Delhi NCR, most of the job seekers face dilemmas about which company to apply for or which company would best serve his/her interest among thousands of options. To solve this dilemma and help you make the right choice for yourself, we bring you the list of top companies to work in Delhi NCR. Read on to know more…

1. Google

Google is considered employees’ favourite company across the world. The reason behind its popularity is the incomparable facilities and perks that the company provides to its employees. This pampering feature makes it the best company to work in Delhi or anywhere else across the world. A few of the perks are free breakfast, lunch, and dinner, flexible working hours, gym, outdoor & indoor games, sleep pods, massage & haircut parlours, sleep pods, health insurance, etc.

2. Amazon

Among the big companies in Delhi, Amazon is the topmost name in the e-commerce sector. Apart from good pay and great atmosphere to work, it provides attractive perks such as transport facility, travelling allowance, internet allowance, insurance, stock option, etc. It offers jobs such as administrative, production, developer, business development, customer service, HR, IT support, etc.

3. American express

American Express popularly known as Amex is one of those organizations which have stimulated a cool and interactive corporate environment. It provides facilities such as smart savings program, fitness centre, child care centre, health benefits, tuition reimbursement, mother nursing rooms etc.

4. Adobe

Adobe India is headquartered in Noida and is known to remain committed to providing equal pay, healthy environment at and beyond the workplace. The common jobs offered by adobe are a Data scientist, designer, sales, finance, marketing and legal jobs.

5. Oyo rooms

The company was founded by an 18-year old guy Ritesh Agarwal and is currently the largest hospitality chain in the country. It provides an employee stock option plan (ESOP), health services, long term insurance etc. The common jobs are Business development, HR jobs, program manager, data analyst, software engineer, content jobs etc.

6. TCS

Among the IT companies, TCS is a well-known name in the industry. It’s also one of the largest employers in the IT sector. It has 3 offices in the region: Delhi, Noida and Gurgaon. You can find jobs in banking, insurance, financial services, HR, engineering and communication in this one of the best IT companies to work in Delhi.

7. Microsoft

Microsoft is counted in the top MNC companies in Delhi. It’s known for its amazing work culture where individual ideas are valued and nurtured. It promotes employees to contribute it others’ success, which also affects their performance evaluation.

8. SAP labs

SAP Labs is ranked top on employee retention and employee happiness level making it one of the most desirable companies in Delhi. It’s known to provide unique benefits specially to women such as long maternity leaves and work from home 4 days a month.

9. Flipkart

The indigenous e-commerce giant Flipkart is a quite popular workplace in India. Known for its employee empowering policies and ideals, it’s been a great employer for freshers as well as experienced job seekers.

10. Marriott Hotels

Mariott is a global hospitality giant which provides special benefits like staff discount, social engagement, onsite child care, maternity & paternity leaves, car wash etc.

If you are looking for job opportunities in the best companies in Delhi, try apna app. This app is a great platform to find suitable jobs in over 70 categories like recruitment executive, counsellor, E-com executive, cook, back office executive, driver, accountant, Customer support executive etc. The best feature of this app is that you can directly call the HR and schedule your interview instantly. Apart from this, you can also use it for learning new skills and professional networking.

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laurelkrugerr · 5 years ago

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The Secret to Sustainable Growth Is Identifying Trends Ahead of Time

August 12, 2020 6 min read

Opinions expressed by Entrepreneur contributors are their own.

Entrepreneurs have to walk a tightrope. Every day, we focus on keeping customers happy and making sure our businesses are running smoothly. (I share daily tips in my newsletter on my website.) But we have to balance that daily grind with looking ahead. Envisioning what customers may need in the future — most times before they even know what they’ll need — is the secret to sustainable growth.

The COVID-19 pandemic has left thousands of businesses across industries struggling. No one can be sure how and when the economy will rebound, and more than 100,000 small businesses have closed forever, according to The Washington Post. It is now more vital than ever for founders to be flexible, ready to pivot, more daring and a bit more visionary.

I recently heard about SimplePractice’s story of product vision. Howard Spector’s foresight is one reason the electronic health record (EHR) platform is experiencing a growth surge during the pandemic. Spector, the cofounder and CEO of SimplePractice, studied to become a therapist when he saw the existing EHR systems on the market were complicated, incomplete and poorly designed. He built SimplePractice to combine the solutions practitioners need, such as scheduling, documentation, billing and client communication, in a single, beautifully designed and affordable platform.

Related: Technology as the Way Forward: The New Normal

Telehealth was on Spector’s radar, but demand was low. He and his team revisited it periodically. A couple of years ago, they started to see more standalone telehealth apps coming out and decided to add it to the platform. “I realized we should get out in front of this, so we prioritized it on our roadmap,” says Spector. “If we didn’t, we’d be suffering right now.”

SimplePractice encouraged its customers to use the video-enabled feature to ensure continuity of care for patients in rural areas or for patients who couldn’t get to an appointment because of traffic, storms and the like. About a quarter of SimplePractice’s clients took advantage of the service SimplePractice — until the pandemic.

Since then, almost 90 percent of customers have adopted telehealth. SimplePractice customers went from using five million telehealth minutes per month in January to 144 million in April. “We’ve also seen a massive spike in new customers beginning in March, and we believe it was primarily driven because we had telehealth integrated into our platform,” explains Spector.

SimplePractice continues to amp up the offering and has recently added a waiting room and screen-sharing capabilities. “Our work is never done,” he continues. “We’re always looking ahead at what’s next, what features our customers are asking for, and what features our customers need. We’ve intentionally created a very entrepreneurial culture that honors the individual’s ability to be adaptable and creatively problem solve.”

The lesson here is to learn how to spot industry trends and invest time and energy into these trends, even if it’s just to test them.

Related: Telemedicine is Laying the Roadmap for Healthcare’s Future

Bringing disruptive models to new industries

Visionary founders sometimes get the idea for their businesses by applying the thinking of disruptive companies in other industries to their fields, which is especially true in economies of despair. Think 2008-’09, when Uber adopted the taxi model and paired it with tech. Or when Venmo took PayPal’s approach and made it more user-friendly and mobile-centric. That adoptive tack is paying off for the founders of Jurny, a smart tech solution in the hospitality industry, and Vooks, a streaming platform for animated children’s books.

Watching how companies like Airbnb, Uber and Postmates used technology to enable shifts to on-demand services inspired Jurny cofounder and CEO Luca Zambello to explore bringing that business model to hospitality, an industry that has been slow to adopt new technology. While interviewing the two on my Entrepreneur podcast recently, I learned how Zambello and his cofounder developed a technology that helps hotel and multi-family building owners increase efficiency and profitability on vacant units while streamlining operations to give guests a simple way to plan and enjoy their stay with limited interaction.

For property owners, Jurny acts as an end-to-end managed service that includes interior design, sourcing and installation, marketing agency, cleaning management, customer support and security. Guests use the Jurny app to find available units, choose dates, book their stay, check-in, check-out and access everything they need during their stay.

Both founders are frequent travelers who loved the idea of being able to go from booking to check-in in seconds without having to wait or interact with anyone. That contact-minimizing solution has been ideal for people traveling during the pandemic, and Jurny’s revenue has been four times higher than the industry average. The company’s tech-first experience enables them to address social distancing measures and reduce potential contact points. The lesson here is that you don’t need to create a revolutionary new business model to disrupt an industry. Disruption can be copied from other spaces. Find industries that are outdated and apply a proven model to that industry.

The timing has also been great for Vooks. CEO Marshall Bex, former creative director for Nike, got the idea for a Netflix-style platform for children’s books after noticing his daughter didn’t like reading but enjoyed watching videos. Bex and his three cofounders — including Shannon Bex, a multi-platinum recording artist (Danity Kane) and TV personality (Making the Band and So You Think You Can Dance) — launched Vooks about two years ago as the world’s first streaming platform bringing storybooks to life through animation.

Related: Hotel Experiences Are Going to Be Completely Different: Ritesh Agarwal

Vooks quickly gained fans from educators to celebrities — a recent shout-out came from Michelle Obama. Since the pandemic started, it has really taken off. Vooks has seen record monthly growth in subscribers and daily users. It now has about one million registered users across 175 countries. Educators at 95 percent of elementary schools in the U.S. and Canada are using Vooks. The lesson here is to look for problems that people in your current sphere of influence are having. This takes the ability to be observant and skill to create solutions to existing problems.

While all of these companies have had their growth accelerate unexpectedly over the last several months, it’s a good bet to assume they will continue to succeed. Their founders have proven they can quickly respond to changing circumstances and spot opportunities, and the loyalty their products have gained with customers isn’t likely to end when the pandemic does. The new normal for entrepreneurs is there is no normal. You must stay agile and pivot as needed.

Website Design & SEO Delray Beach by DBL07.co

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source http://www.scpie.org/the-secret-to-sustainable-growth-is-identifying-trends-ahead-of-time/ source https://scpie1.blogspot.com/2020/08/the-secret-to-sustainable-growth-is.html

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riichardwilson · 5 years ago

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The Secret to Sustainable Growth Is Identifying Trends Ahead of Time

August 12, 2020 6 min read

Opinions expressed by Entrepreneur contributors are their own.

Related: Technology as the Way Forward: The New Normal

The lesson here is to learn how to spot industry trends and invest time and energy into these trends, even if it’s just to test them.

Related: Telemedicine is Laying the Roadmap for Healthcare’s Future

Bringing disruptive models to new industries

Related: Hotel Experiences Are Going to Be Completely Different: Ritesh Agarwal

Website Design & SEO Delray Beach by DBL07.co

Delray Beach SEO

source http://www.scpie.org/the-secret-to-sustainable-growth-is-identifying-trends-ahead-of-time/ source https://scpie.tumblr.com/post/626317624626855936

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scpie · 5 years ago

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The Secret to Sustainable Growth Is Identifying Trends Ahead of Time

August 12, 2020 6 min read

Opinions expressed by Entrepreneur contributors are their own.

Related: Technology as the Way Forward: The New Normal

The lesson here is to learn how to spot industry trends and invest time and energy into these trends, even if it’s just to test them.

Related: Telemedicine is Laying the Roadmap for Healthcare’s Future

Bringing disruptive models to new industries

Related: Hotel Experiences Are Going to Be Completely Different: Ritesh Agarwal

Website Design & SEO Delray Beach by DBL07.co

Delray Beach SEO

source http://www.scpie.org/the-secret-to-sustainable-growth-is-identifying-trends-ahead-of-time/

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aapias · 5 years ago

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omgdilipsoni · 5 years ago

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Oyo CEO Defends Business Practices That Anger Some Hoteliers After downsizing his U.S. business, Oyo CEO Ritesh Agarwal defended the hotel chain’s business model, and gave no hint that he would be seeking to decelerate Oyo’s growth. At the same time, Agarwal, in an interview with members of the editorial and research … Read Full Story ...

#Business #Defends

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kevinjona4 · 5 years ago

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Watch blovnews.com's full interview with OYO CEO Ritesh Agarwal Ritesh Agarwal, CEO of OYO Hotels, joins "Squawk Alley" to discuss the company's recent layoffs, strategy and more.

#Business #Top News #Trending

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arifulislam312 · 5 years ago

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Top 10 Most Inspiring Entrepreneurs of India

When the word “Entrepreneur” comes to mind, the connotation that arrives along with it is “risk-taker”. Encyclopedias and dictionaries define entrepreneurship to be the act of creation. Designing, creating and running a small venture is what entrepreneurship in its essence is.

Deep down though, entrepreneurs and entrepreneurship are largely running around the ability to be a risk-taker. The ability to believe in yourself and creating something meaningful, taking the risks involved in it heads-on. Entrepreneurship is about solving problems. Identifying the needs, wants and desires of a customer segment, and providing the products or services.

Economics has a rather intriguing definition for entrepreneurship. The discipline of economics views an entrepreneur as someone who looks up the commercial foundations of the opportunities. The entrepreneur makes use of technology to create a new tomorrow, solving problems at the core of their focused discipline.

Lots of jargon? Let’s simplify. An entrepreneur is a problem solver, except for that fact that she is also willing to find the best solution, taking utmost riskiest factor into consideration. Furthermore, it’s a battle, and they are hell-bent to emerge as winners.

India has become one of the topmost countries to produce startup unicorns. Our glorifying entrepreneurship history has given us legends like Ambani, Birla, Tata and Mittal. Moreover, let’s take a look at the Top 10 Most Inspiring Entrepreneurs in India.

10.| Shradha Sharma

Shradha Sharma founded the popular entrepreneurship blog cum news platform, YourStory. It focuses on the Indian startup ecosystem, covering news ranging from stories of entrepreneurs to funding alerts. Apart from the Indian startup ecosystem, it also covers Europe, the USA and almost every other continent and country.

It publishes its articles in various vernacular languages, as well, languages foreign to India. Sharma started it in October 2008 and has been operating it ever since. Furthermore, Sharma regularly interviews new entrepreneurs and features stories from across the world.

9.| Sriharsha Majety

Around the time Uber was changing the way people take cabs in 2014, Majety was changing the way people eat food in India. Starting from being a courier aggregator, Majety shifted to food ordering and delivery services. Thus, in 2014, Swiggy was born. Swiggy went on to become India’s fastest-growing unicorn.

Swiggy is a food ordering and delivery service’s aggregator. Although it is facing stiff competition from other players such as Zomato and Uber Eats, the journey of Majety and his mates, Reddy and Jaimini still remains inspirational.

8.| Phanindra Sama

The lack of centralized information providing platform regarding bus tickets during Diwali Vacations prompted Sama to create redBus. The journey of Sama is quite intriguing to young entrepreneurs. The problem Sama faced while trying to search for information regarding buses from Bangalore to Hyderabad, made him realize that the internet could be a medium to connect the vendors and the customers.

Furthermore, by 2014, redBus was already in collaboration with Uber and Ibibo Group.

7.| Sandeep Aggarwal

Sandeep can be described as a serial entrepreneur. After co-founding the successful Indian marketplace, Shopclues, he went on to create Droom. Droom is becoming India’s biggest automobile marketplace for buying and selling vehicles. Over these years, Aggarwal with his efforts expanded Droom to become a full-fledged automobile company, that does everything except manufacturing.

6.| Bhavish Aggarwal

Bhavish Aggarwal co-founded OlaCabs, the Indian solution to cab disorganization problem. Uber is a good analogy and a competitor to OlaCabs in India. Aggarwal started off as a Researcher in Microsoft after completing college from the premier Indian Institute of Technology, Bombay. In 2011, he wanted to create a solution for outstation rentals in India. They gradually pivoted to ride-hailing services.

They were hailed as the youngest richest Indians in 2015, and since then, have become investors themselves, investing in companies such as Vogo.

5.| Sridhar Vembu

Vembu is the man behind the corporate SaaS provider platform, Zoho. It has a come to a long way from selling network equipment to creating applications focused on the B2B (Business to Business) market segment. Vembu, a pass out of the esteemed Princeton University, and Indian Institute of Technology, Madras, created Zoho due to the lack of proper online applications.

Zoho, apart from providing applications focused on the corporate, also provides basic business tools to nurturing startups. Furthermore, it has a coveted 40 million active users now, with over 45 products in their catalogue.

4.| Kunal Shah

Shah brought the work of recharging mobile into the hands of the consumers through their online portal, in India. Started in 2010, Freecharge founded by Kunal Shah and Sandeep Tandon has come a long way from just being a mobile recharge platform. They were acquired by the eCommerce platform Snapdeal.

Recently, Axis Bank bought Freecharge. Kunal Shah left from the post of the Chief Executive Officer just after the Snapdeal Deal.

3.| Vijay Shekhar Sharma

Sharma was born and brought up in the small town of Aligarh. His story of founding PayTM is a historical saga, for some and for some it is a real entrepreneurial journey. He passed out of the prestigious Delhi Technological University in 1998. While in college he created various web platforms and sold them.

He started One97 Communications in 2000 as one in all platform for news and blog. In 2010, he started PayTM. He bootstrapped it with his own money, and in the phase of demonetisation in India around November 2016, gave it a boost.

Sharma also became the youngest Indian to be on the Forbes’ Billionaires list in 2017.

2.| Ritesh Agarwal

Ritesh Agarwal has become the poster boy for Entrepreneurs in India. While travelling he realized the lack of proper facilities for a budget traveller. That drove him to drop out of college, and start Oravel Stays. He became the first and only entrepreneur in India to receive the Theil Fellowship. He gradually pivoted Oravel to OYO Rooms.

According to the stats, it has become the third-largest hotel chain in the world. Agarwal expanded OYO to China, the United Kingdom, and has plans for the United States also.

1.| Sachin Bansal

Sachin Bansal co-founded Flipkart, one of India’s biggest eCommerce platform, with Binny Bansal. A pass out from the Indian Institute of Technology, Delhi, Bansal served as the Chief Executive Officer for about 11 years. Flipkart was bought by Walmart for about $16-$19 billion dollars. After the Walmart deal, Bansal left Flipkart as the CEO, and Binny was promoted to the position.

Bansal is described as an enthusiastic coder and a really avid gamer. He was known to organize gaming and coding challenges in the company. Furthermore, he was an engineer in the Amazon Web Services, which he left in 2007 for Flipkart.

Moreover, he has been the Entrepreneur of the Year award by Economics Time in 2013. Since the Walmart deal, he has become an active investor in companies such as OlaCabs, InShorts and Unacademy.

https://ift.tt/39GeLQF https://ift.tt/2OZobif

#IFTTT #Blogger

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vsplusonline · 5 years ago

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Masayoshi Son’s real estate bet has some big problems

New Post has been published on https://apzweb.com/masayoshi-sons-real-estate-bet-has-some-big-problems/

Masayoshi Son’s real estate bet has some big problems

By Pavel Alpeyev and Takahiko Hyuga

Last March, months before the meltdown at WeWork, Masayoshi Son worked through the prospects for another one of his favorite portfolio companies — a startup from India called Oyo. In a spacious conference hall at his Tokyo headquarters, the Japanese billionaire huddled with lieutenants from the startup and his own SoftBank Group Corp. to brainstorm strategy. He figured Oyo had the potential to disrupt both the staid hotel business and short-term apartment rentals in Japan, according to people in the room.

One bullet point scribbled on a floor-to-ceiling whiteboard, in particular, caught Son’s eye: a target of one million rooms within a year. In a burst of enthusiasm, he had everyone sign off on the goals right on the whiteboard, scrawling signatures under the words “BINDING” in all caps, according to a copy seen by Bloomberg News and the people present.

Today, the Oyo unit handling apartments has about 7,500 rooms, less than 1% of the whiteboard target. Son’s aspirations turned out to be an example of dramatic overreach, part of a year in which the Japanese investor’s reputation was battered by troubles at WeWork and Uber Technologies Inc.

The shortfall, which hasn’t been reported before, signals more trouble ahead for SoftBank and one of its most highly touted investments. Perhaps more concerning, the episode reveals a fundamental flaw in SoftBank’s investment strategy: Pumping billions into startups and pushing them toward outsized growth often undermines promising businesses. With its chaotic rush to expand in Japan, Oyo infuriated potential partners, alienated workers and jeopardized its reputation with local customers, according to interviews with more than two dozen of them. One incensed local customer went so far as to set up an Oyo Life Victims Association account on Twitter. Similar frustrations have been voiced by customers and hotels in India and other overseas markets.

The troubles are so pronounced Son faced questions about Oyo during his earnings briefing in Tokyo last week. He conceded there have been “some conflicts with hotel owners,” but said that is normal in such businesses and overall the performance is good. “Oyo is a wonderful company,” he said.

SoftBank declined to comment on the startup’s internal issues and practices beyond Son’s comments, but said it believes the company can have a sustainable expansion in Japan with good corporate governance.

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Oyo, founded by 26-year-old Ritesh Agarwal, has drawn particular attention in SoftBank’s portfolio of startups because of its similarities to WeWork. Both are trying to change traditional real estate businesses with technology. Both have charismatic young founders. Now, skeptics say Oyo could also fall short, further undermining Son’s grand ideas about technology investing.

“Oyo is a WeWork in the making,” says Santosh Rao, head of research at New York-based Manhattan Venture Partners. “They need to slow down and pull back.”

Oyo says patience is in order. In an interview, Agarwal argues his company is bringing new concepts to a business in need of fresh thinking, especially in markets like Japan. He acknowledges “teething issues” that are to be expected for a fast-growing, innovative startup and defended the use of ambitious goals.

“Leaders at Oyo aspire for ambitious targets which act as directional north stars for building for scale,” he said. “From our shareholders perspective, they have said – you have a good business plan, you have continued operating as per your business plan, please keep delivering against that.”

SoftBank is the largest outside shareholder at the company, whose backers also include Sequoia India and Airbnb Inc.

The last thing Son needs now is another big mistake. He wants to raise capital for a successor to his $100 billion Vision Fund, but potential backers have been spooked by WeWork and Uber, as he conceded last week. At the same time, activist Paul Singer has taken a stake in SoftBank, advocating for changes to boost its share price including a buyback and more transparency.

“Son needs to focus on rebuilding his reputation,” says Atul Goyal, senior analyst at Jefferies Group. “If Oyo blows up, that won’t be easy.”

Agarwal got the idea for Oyo after roaming around India on a shoestring budget, witnessing first-hand the opportunity to bring order to the anarchic industry. At 19, he set up a reservation website and began working with small hoteliers on service, design and standardized accouterments like bedding and toiletries to draw more travelers. Oyo took 25% of sales.

In India, the concept took off. The reassurance of basic quality fostered trust with customers and brought in extra revenue. Enamored of the idea and Agarwal, Son invested in 2015, two years after founding.

But as SoftBank started the original $100 billion Vision Fund in 2017 and Son invested in the world’s biggest startups, he began to stoke Agarwal’s dreams with money and ambition, according to people directly involved. Son poured about $1.5 billion into the company and encouraged the young founder to try to become the world’s largest hotel operator by room count. That would mean surpassing Marriott International Inc., founded in 1927.

The business model that worked so well in India wasn’t an obvious fit for markets like the U.S. and Europe, which already had well-established hotel chains and largely predictable quality. Yet Agarwal slogged ahead overseas, even buying a few properties outright, including the Hooters Casino Hotel in Las Vegas.

Japan was supposed to be like a second home. Son is a local hero and SoftBank’s brand is ubiquitous: It operates one of the largest wireless carriers, runs the leading web portal and owns the Fukuoka SoftBank Hawks, which have won five of the last six baseball championships. SoftBank set up joint ventures through two subsidiaries to promote Oyo’s local business.

That support fueled Oyo’s confidence as it entered Japan in early 2019. Agarwal decided to push into both its traditional hotels business and a newer operation called Oyo Life, which offers furnished apartments without the typical hassles of security deposits or guarantors. With Son’s enthusiastic backing at the March meeting, Agarwal and his team set the audacious goal of becoming the biggest operator in both businesses — in one year.

“Many entrepreneurs want to do a land grab, and it’s often the right thing to do, but you have to balance between your desire and ability to do it,” says Ben Narasin, venture partner at New Enterprise Associates Inc., which isn’t involved with Oyo.

There were missteps at Oyo from the start. The Japan hotel team, led by a transplant from India named Prasun Choudhary, figured they could get to as many as 75,000 rooms in the first year, which would put them ahead of the Apa Hotels chain in the No. 1 spot. But they took as their starting point an inflated addressable market of 1.6 million rooms based on numbers from the local tourism authority: They included campgrounds, bed-and-breakfasts and pay-by-the-hour love hotels, which weren’t part of Oyo’s business plan, according to people involved at the time.

Oyo Life, the apartment rentals business led by another Indian lieutenant called Kavikrut (who like many Indians goes by one name), set the goal of 1 million rooms in part because it was a stunning, round number that would exceed the capacity of the Japan market leader, the people said. That was the target that caught Son’s attention in March.

To reach their goals, the two lieutenants began hiring furiously. Human resources staff conducted as many as 15 interviews a day, making offers to many the same day, people involved said. At job hunting events, prospects would get recruited on the spot, sometimes signing hand-written offer letters. Oyo Hotels surged to more than 580 people, while Oyo Life added 300, the company said.

“Oyo believes that building a highly-motivated local team and strong management leadership is an important strategy for launching and succeeding in a new market,” Choudhary said in an interview. “This team is what has made it possible for us to partner with over 190 hotels.”

But Oyo’s technology wasn’t ready. In the first three months after launch, the hotel operation double booked rooms because it had failed to integrate with local travel agencies, according to Oyo and former employees. Staff in India entered reservations made in Japanese manually, introducing errors. Some hotel owners found their rates reduced to just pennies by inscrutable algorithms. When they complained, the fix would take days because pricing was controlled in India, according to former employees.

At the same time, Oyo Life workers struggled to keep track of keys they received from landlords because of software created in India. One tenant interviewed by Bloomberg spent the night in his car outside of his new apartment because he was given a wrong code for a lock box containing the keys. Even though it was during working hours, no one was manning the help lines at the company, he said. Two other customers interviewed by Bloomberg also had trouble getting into their apartments.

“Oyo operated like they were driving a Ferrari, instead of a hatchback,” said Taito Ito, executive officer at Japan Accommodation and Lodging Foundation, a hotel industry group handling about a dozen complaints against the company from its members. “It’s difficult to see this business going anywhere in Japan.”

There were some satisfied customers, including one Oyo Life user who raved about the convenience of getting an apartment via an app and raking in points by paying rent with a credit card.

Despite the rocky start, Agarwal landed a starring role in July at SoftBank World, an annual event Son hosts in Tokyo. On stage in front of hundreds of the Japanese company’s suppliers and customers, Agarwal explained how Oyo is using data to beat the competition. Its algorithms can evaluate properties in under five days, compared with months for traditional hotels, he said. Artificial intelligence helps Oyo predict what kind of interior design can boost demand — like pictures of Marilyn Monroe — and adjust prices more than 43,000 times a minute.

Beaming on stage, Son said it was only a matter of time before Oyo, the third-biggest hotel chain by room count, would surpass the established giants.

“In three months, he will become the world’s biggest hotel king,” Son said at the time. “This would be a first in human history.”

Unbeknownst to the crowd, Agarwal and Son were in talks about an unprecedented deal at the time. To increase his stake in Oyo, the young founder would borrow $2 billion to buy out some of his earlier investors. To reassure banks including Mizuho Financial Group Inc. to lend the money, Son personally guaranteed those loans, a highly unusual arrangement. The deal would double Oyo’s valuation to $10 billion.

Just weeks later, in early August, it became clear Oyo’s hotel business in Japan was falling far short of its targets. Agarwal told Choudhary to start firing under-performing staff, according to a message reviewed by Bloomberg News. But top management didn’t realize at first that labor laws in Japan prohibit such layoffs, according to former HR staff.

Oyo had begun hiring before it set up all its operations, so many employees joined under temporary contracts through an outside recruiter with a plan of making them full-time after six months. When that time came, Oyo tried to cut salaries for a number of them as much as 50%, according to former employees and copies of documents seen by Bloomberg News.

Alarmed by worker complaints, SoftBank sent its own compliance staff into Oyo for a week-long internal audit, the people said. In the end, Agarwal’s management withdrew the low-ball offers and said the revisions were an administrative mistake. Oyo says it wasn’t downsizing and was only making a fair assessment of staff. Choudhary acknowledges that, at first, Oyo thought it could manage performance in Japan like it has in the rest of the world.

Several former Oyo Life employees, who declined to be named because they signed confidentiality agreements, described a chaotic, disorganized work environment. The company poached executives from top-tier consulting and technology firms who excelled at inspirational talk, but had little understanding of real estate and even less patience for the industry’s slow-moving ways, the people said. One of them said the real estate industry just doesn’t run on startup time.

The push for growth hurt Oyo’s relationship with suppliers too. In one instance, the company placed a 100 million yen ($910,000) furniture order with Japanese maker Takumi Otsuka, clinching the deal with a handshake. A month later, Oyo canceled even though the manufacturer had already set up a dedicated line and began production, according to staff from Oyo.

Oyo denied the cancellation of any confirmed orders, but acknowledged there were lapses in communication in its early dealings with Takumi Otsuka. Oyo says the two companies now share a healthy business relationship and the furniture maker remains one of its valuable suppliers. Takumi Otsuka declined to comment.

In October, with Oyo Hotels short of its original targets, the company mobilized support staff to do sales. It launched Project Yukichi, named after a famed educator whose face is on the 10,000 yen bill, with the goal of that many new rooms a month. The workers, already struggling to keep up with complaints from hotel owners, were told they are also responsible for producing 30 new sales leads a month, according to former employees and company presentations. The “OYOpreneurs,” as they were called, got a three-day training session from Bain & Co. to get them up to speed, the people said.

With so much energy focused on sales, customer service suffered. One Oyo Life tenant told Bloomberg News he moved into his room to find bed sheets and covers, but no bed or mattress to put them on. After facing a prospect of sleeping on the floor for a week, he hauled over a futon from his parent’s house.

Yutaro Kondo, a 25-year-old entrepreneur, paid 86,000 yen for a 21-square-meter studio about an hour by train from central Tokyo. While a premium to similar listings, the contract covered internet access, all utilities and the last month free of rent. But he didn’t have heat for weeks so he moved out in December. Shortly after, he got a bill for the month that was supposed to be free.

“The simplicity they offered is attractive to a lot of young people,” Kondo said. “I feel pretty disappointed they didn’t deliver on that promise.”

Hotel owners are unhappy too, especially with disputes over money. Oyo aimed to increase business for its partners by dropping rates at first and then increasing the price as occupancy went up. To help ease the pain, it guaranteed owners a minimum level of revenue provided they met certain criteria. Instead, a number of hotels found the payments fell short and the company unwilling to make up the difference.

Oyo acknowledged such disputes and said that in some cases hotels failed to fulfill their contractual obligations. Still, it said it decided to pay in full to mend relations. One SoftBank executive said there were troubles between Oyo and about 40 hotels out of about 200, emphasizing many hotel owners are satisfied.

“Employees are exhausted from dealing with Oyo,” said Shingo Ozaki, who manages Hamakan Hotel on the southwestern island of Kyushu, which is considering ending its relationship with the startup.

Oyo said it is continuously working to improve software and it launched a call center that in the past month handled 1,700 tickets from partners and guests.

Late last year, after the debacle at WeWork, Son overhauled his approach to startups. At a gathering of portfolio companies in California, he cautioned founders that they need to have a strategy for profitability and that growth couldn’t be the sole target.

But any changes may be too late for Oyo in Japan. In December, news leaked out that SoftBank’s Yahoo Japan sold its stake in Oyo Life, liquidating the partnership without any explanation. In Japan, the hotel room count has stalled at little over 5,000, with just over 300 new rooms added in December.

“Entrepreneurship is a game where you have to learn to crawl, then walk and only then to jog and run,” said Narasin of NEA. “Skipping steps can be dangerous.”

At least some hotels are giving up, tired of the troubles they’ve had with Oyo. Shoji Sato, president of the company that runs an Oyo affiliate called Sawara Kita Hotel, said the company didn’t pay revenue guaranteed for January after reducing room prices to draw more customers. He said Oyo workers often ignore his inquiries or are slow to respond too. Oyo said there is no delay in payment because the January cycle closes in mid-February.

“I believed in Oyo after the salesman showed me a brochure with details about SoftBank. SoftBank is led by Masayoshi Son, who is very famous and popular in Japan,” says Sato. “Now we want to end the relationship. I am angry, of course, of course.”

–With assistance from Saritha Rai.

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un-enfant-immature · 5 years ago

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Investors, startup founders in India pool $13M to fund projects that fight coronavirus

More than 150 investors and entrepreneurs in India are funding dozens of projects in a bid to help millions better combat the COVID-19 epidemic and help the nation’s booming startup ecosystem withstand the economic devastation it has caused.

The investors said they have contributed 1 billion Indian rupees — or $13 million — of their own money to the ACT Grants initiative, which was unveiled late last month.

The group — which includes several prominent industry figures including Nandan Nilekani, Paytm’s Vijay Shekhar Sharma, Flipkart’s Kalyan Krishnamurthy, Oyo’s Ritesh Agarwal, Udaan’s Sujeet Kumar, Freshworks’ Girish Mathrubootham, CRED’s Kunal Shah, and Times Internet’s Miten Sampat — has funded 32 projects to date.

These projects span six themes, including solutions that could help curtail the spread of the Covid-19 disease, development of testing and detection kits, building medical equipment such as ventilators, and taking care of mental health.

The group came together last month when India had just begun to see cases of the coronavirus disease.

“As governments across the globe started to take measures to combat this pandemic, one thing that came up in our conversations with other investors, startup founders, and startup employees was this urgency to not sit and watch what the government does but help and pitch in as an industry,” said Dev Khare, a partner at Lightspeed Venture Partners, in an interview with TechCrunch.

There have been 29,435 known cases of coronavirus in India, according to the Ministry of Health and Welfare. As of Tuesday evening, at least 886 people had died.

Investors from dozens of venture capital and private equity firms including Accel, Lightspeed Venture Partners, Bessemer Venture Partners, Matrix Partners India, Kalaari Capital, Eight Roads Ventures, 3One4Capital, Sequoia Capital India, and Tiger Global have personally participated in the initiative.

VCs in India moved quickly last month to warn startups in the country to be aware of the effect the pandemic might have on their businesses — despite the record $14.5 billion Indian startups raised in the past year.

In a joint letter earlier this month, several prominent tech investment funds told startup founders that they may find it especially challenging to raise fresh capital in the next few months as they enter the “worst period.” (They have also requested the government to provide a relief package.)

Several trade bodies including Nasscom and TIE Global that count American tech giants such as Facebook, Google, and Amazon among their members are also supporting ACT Grants. Amazon’s AWS additionally is helping these projects with infrastructure services.

On left, some of the startup founders and other industry figures who have contributed to ACT Grants. On right, names of VC and PE funds whose partners have contributed in their personal capacity

One of the projects to receive the grant has been developed by Pune-based MyLab, a startup that has emerged as one of the biggest manufacturers of test kits in India.

“They manufactured between 20,000 to 25,000 test kits last year. In the past few weeks, the number has ballooned to 300,000,” said Abhiraj Singh Bhal, co-founder and chief executive of Urban Company, which runs an online marketplace for freelance labor.

“We offered them the grant money, but also our expertise in scaling their operation,” said Bhal. ACT Grants also went to another six testing projects, he said.

Grants aren’t going solely to testing projects. StepOne, another grant-winning project, has built a cloud infrastructure to handle over 30,000 calls a day and offer telemedicine services to complement helpline numbers run by state governments that are struggling to keep up with high traffic.

And some of the projects that have received grants are developing masks and other items to supply enough protective gears to the healthcare workers. (A full list of the funded projects and the grant amounts they have received is here.)

There are no strings attached to these grants. Funding a project does not give investors any equity in the developer’s startup, said Prashanth Prakash, a partner at Accel in an interview. And there is a large team that screens and selects projects for providing grants, he said. They have received more than 1,500 applications to date.

An investor, who is not part of ACT Grants, said though the initiative is commendable, he believed this group could have made a bigger impact if they chose to help put food in front of hundreds of millions of Indians who don’t know where their next meal would come from. “There are better ways to be resourceful,” he said, requesting anonymity as he did not want to upset the community.

“That said, the fact that all of these people, many of whom aggressively compete for deals, have come together at all and contributed their own money — and not of their LPs — is unprecedented and they deserve all the praise and support,” he said.

The group’s influence and connection in the industry also means that these projects have better odds of seeing deployment at scale. The group is already engaging with various state governments and the federal government to explore ways to work together — and have started to make inroads, said Accel’s Prakash.

But as the projects scale, the group is seeking for more individuals from across the globe to contribute. “Anyone who wants to help India, one sixth of the world’s population, fight Covid-19 is welcome to contribute,” said Lightspeed’s Khare.

There’s even an international component for people outside of India to contribute. ACT Grants has partnered with United Way, a Virginia-based nonprofit that enables people outside of India to make charitable, tax-deductible donations.

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