Oyo is a Ponzi scheme just like WeWork.
As the photo at the beginning of the article shows, "budget" hotels in India are truly awful spaces: crowded, dirty, unsafe. While OYO and its CEO, Ritesh Agarwal, have mastered American Corporate weasel talk and hype, their impact on the final product is close to zero. The enterprise is a fraud, designed to part a fool, Softbank, from his money.
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Consolidator of hotel rooms are now a days referred as Tech Startup. This is Deja Vu . Random walk on wall street explains how this game is played every generation. OYO & We Works are the examples of this game.
What OYO was doing is trying to standardize quality and streamline the query via available technology , then Soft bank money came in , they tried to be CBOT futures market for hotel rooms by buying them in advance . Why is this called a Tech Company ? Because there are enough goats to pay multiples ? Even in this article they referred to this company as Tech start up ..Loz that's the tragedy ,
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Im a former OYO employee and after this second article i can say the company is just interested in its own benefit not in clients or employees...
@MA That what capitalists and stockholders expect.
I am not a venture capitalist but isn't it really investing in an idea, kind ethereal, no brick and mortar so to speak. An idea to do something in a different way providing office space, motel rooms whatever it looks like repackaging but gets over blown in value on paper. These start-ups can't stand still but must keep expanding because the investment is driven by expected future profits and growth.
Rather than think any more about $$ what about the people and families who have lost their jobs, did the founders, who must have made a bunch of money running a company valued in the billions, look out for them in any way? I really have no idea what the founder or founders received in compensation.
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It's rumored that Oyo is changing its name to O No.
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"Zume, a company that used robots to make pizzas and had been valued at $2 billion ..."
Seriously?
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WeWork has been quite a reality check for SoftBank!
It’s just another flailing, unprofitable start up financed by Mr. Son at Soft Bank - We Work, Uber, and now Oyo lose money - a lot of money. They’ve never been profitable and most likely, never will. Uber loses $1.25 on every ride - you’re not making that up in volume. Mr Son rode the wave with his investment in Alibaba; which provided the current platform for his ventures. He threw money at these companies like candy without regard to the operational and fiscal worthiness and now many are unraveling. I’ve heard SoftBank may even be liable for We Work’s leases - I’m waiting for SoftBank’s stock to plummet just like the shares of many of his investments. He’s an amateur.
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It’s incredibly difficult to organize the informal sector in India where most of the business is done on trust and reputation. The bargain hunters are notoriously disloyal except to bargains. When the music stops, they’ll go elsewhere but won’t pay jacked up prices!
By now, SoftBank’s investment strategy is pretty clear. It’s not based on creating value but on manipulating the marketplace.
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