Ease of entry and exit of visitors isn’t myGate’s singular feature though. It also curates a list of service providers, categorizing them—such as your domestic help, car cleaner, cook and nanny. Residents are allowed to rate their services. The rating enables other people living in the community to decide whether they want to hire the individual or not. With the tap of a button, you can choose to assign that person to your home.
Security of the application
myGate says it doesn’t use the personal data to advertise products. When anyone enters a gated community, they need to be identified at the gate. This means that the app records the data of the visitors, daily staff entry, and various delivery companies that enter the complex.
It’s now running a pilot with Swiggy, Zomato and cloud kitchen Freshmenu to pre-approve the entry of their delivery executives at the gate. The resident can also set a timer that auto-approves the delivery executive within the stipulated time.
A Zomato spokesperson said the company is running an experiment with myGate to see if they can cut down the time taken to complete the delivery by making entry into residential complexes seamless.
This is just a pilot so there are no commercial dealings right now. The myGate app currently has an exhaustive list of companies that you can select from that send their delivery executive or other service providers to your home. You can pre-select them and allow them to enter the gate.
What is the future?
Will this be the future of the company’s growth? Vijay Kumar claims the pre-approval of entry of delivery executives is only being added for the convenience of the residents. And his team is only focused on meeting targets.
myGate has signed up 1,000 housing complexes, says Vijay Kumar. When it raised funds of $2 million from Prime Venture Partners and other investors in January, it had signed “several hundred”. At an average of two guards per housing complex and at Rs 5,000 ($71.30) a device, this adds up to a revenue of Rs 1 crore ($142,565) a month or Rs 12 crore ($1.71 million) a year.
The company says it will not use data to target advertise any products or services to the residents of the communities. Daga, the chief technology officer of myGate, says he is not in the business of selling customer data.
But there is so much data that the company has about the consumption patterns of the residents. Vijay Kumar and Daga say they don’t plan on using this data for business purposes. “There are a lot of things where we can use it,” Vijay Kumar says. “As of now, we don’t have anything in our minds. We don’t have any plans.”
The $9 million in Series A funding it raised in October from Prime Venture again, and other existing investors, will go towards expansion into 10 cities, says Vijay Kumar. Right now, it has operations in Pune, Hyderabad, Bengaluru, and most recently, Chennai. By 2019, myGate aims to have 10,000 apartment complexes under its belt.
Calculating the logistics
With the two-guard average in place, that’s a sweet Rs 120 crore ($17.11 million). There is a cost though—the customer acquisition cost versus what the company is making—annual contract value (ACV). “That equation needs to match at some point,” says a partner at a venture capital firm requesting anonymity, who specializes in SaaS (Software as a Service) products.
“I fear that when you are selling to unempowered buyers (like management committee of apartment complexes), you have a longer sales cycle. And, therefore, a more expensive sales cycle. You don’t have a large ACV. Therefore, I question just the economic robustness of the business,” he adds.
While myGate didn’t share how long it takes to convert a sale, the company has offered a pay-as-you-go option to reel in customers in the past. Once they get hooked on to it, the company would sign a long-term contract.
In this space, playing the game right would mean having long-term contracts in place. ApnaComplex, which offers property management tools such as accounting, helpdesk management, payment collection, and facility management, apart from its own gate security management tool, has multi-year contracts, says its CEO and founder Raja Sekhar Kommu. “The longest we have is five years,” he says.