Tech is the Best Way

myGate app still has many locks to open

If you are living in a single apartment building, which has a single entry access path, covered from three sides and dead in the center of town, you can keep a tab on the flurry of delivery personnel who come knocking on your door—with your food, grocery, clothes or dessert. But when there are hundreds of apartments, villas and residents in a large housing complex, there are many more doors, and that many more delivery agents. These enclosed residential spaces are manned by security guards and monitored with cameras.

But the gate is where the sifting of people is done. With an explosion of delivery services, a small startup for gate management called myGate has spotted an opportunity. How it works is that the myGate app connects the residents’ phones to the guard posted at the gate.

Seated at the venture capital firm Prime Venture Partners’ office in Bengaluru’s Whitefield suburb, partner Sanjay Swamy and two co-founders A Vijay Kumar and Shreyans Daga explain how the app works. (Prime Ventures has recently funded the app; more on that later.) The resident can approve entries for just about anyone—friends, household help, cabs, delivery agents—either in advance or at the time of entry, with a simple swipe on their phones. The guard sees an update allowing or disallowing entry to the visitor in question on a device leased from myGate.

Before myGate, guards would ask the visitor to sign the visitor’s book, then place a call to the apartment in question (if at all), and let the person through. For one, this was a safety concern, as the visitor book would be checked only in retrospect, much like CCTV cameras that are checked after a mishap—a pertinent issue myGate, quite simply, eliminates.

Safety, though, is an added perk. The reason an app like myGate exists today has a lot to do with our growing delivery economy, the ins and outs of hundreds of people in these housing complexes, a sudden growth in footfall.

But is this a narrow wedge into a larger slice of the delivery economy?

A golden key

Despite all the cameras that gated communities have, in the end, tangible, actionable security comes from the guards. Many large apartment complexes hire out a security agency to man the gates. There is an audit conducted to check the procedures followed by guards. The guards, after all, must be equipped to deal with constant activity at the gates.

At 7 AM, the car cleaner comes knocking asking for the keys. Then the cook. Or if you don’t have a cook or don’t cook at all, there’s morning breakfast delivery. It could be the Uber or Ola ride that will take you to work. If it’s a pool cab, then there is also a co-passenger who would have to come in through the gate.

Perched at the gate, observing arrivals and departures gives one a possible window into consumption patterns. myGate’s co-founder and CEO Vijay Kumar calls a gate “a dynamic place”.

The resident and guard can interact through the app. Sanjay Swamy showed me how it works through the app’s WhatsApp invite feature. He sent me an invite which contained a six-digit code that the guard at the gate would be able to verify.

Ease of entry and exit of visitors isn’t myGate’s singular feature though. It also curates a list of service providers, categorising 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.

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 which 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 a 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.

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.

A leg in the door

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.

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 specialises 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.

That’s what myGate seems to be aiming at. If it has 10,000 housing complexes by the end of next year, it can count on revenue to accrue from these customers for multiple years. That is if it manages to tie them down in long-term contracts.

Many locks to open

With the likes of ApnaComplex and apartment management and accounting software provider ApartmentAdda having their own security management tools, myGate will have to differentiate its service. Its tie-ups with e-commerce companies could be one differentiator.

But many companies could come up with a similar product. Prestige Estates, a real estate company based out of Bengaluru, has its own facilities management tool which includes a security management service. PM Sree Kumar, senior vice president of facility management at Prestige Estates, says tools like myGate also allow security and property management companies to conduct audits to see if procedures were followed by the security staff or not.

Prestige uses its own in-house product, developed with a partner, for all the properties where it manages the facilities. “That is what we are using predominantly in all our projects,” Sree Kumar says. “Except, where people insist on they would like to have myGate or (others). There are a number of them in the market.”

ApnaComplex offers its gate security management tool for a lot lesser than the Rs 5,000 per device that myGate charges—at Rs 1,500 ($21.4). ApartmentAdda also has a similar product but doesn’t share its pricing publicly. myGate’s product, thus, currently lacks uniqueness. Besides, there’s also the threat of copycats entering the fray if this business picks up.

Vijay Kumar says the company gets a lot of references from customers, who suggest myGate to their friends. The company works with security companies so that they adopt myGate in residential complexes where they take up a contract.

Out of the starting gate
The rapid adoption of smartphones has given rise to yet another business.

The apartment gate and facilities management SaaS industry has been around for a while, with ApartmentAdda being one of the first to enter the space, followed by the likes of ApnaComplex and real estate portal Commonfloor (acquired by Quikr). ApartmentAdda and ApnaComplex have their own gate security management app. They also provide similar services as myGate. With their larger facility and other management tools for these gated communities, the security management tool is just an add-on in a way.

Swamy bets that myGate is in a space that has a great opportunity. As more and more people move towards getting services and products delivered home, the utility of such a product will only increase as more people live in apartments in cities.

"Sometimes you need to start aiming more and bigger as well. The focus right now is heads down execution."

Sanjay Swamy, managing partner at Prime Venture Partners

The VC quoted above doesn’t believe the need is large enough to be solved through these businesses. “It doesn’t strike me as a most pressing need. Which is why I am not a big believer in this space.”

Swamy uses myGate at his residence and is convinced that the need for an app like myGate is bound to grow because of the larger trend of growth in delivery services. But can myGate move from a cool feature to a “must-have” app in the future?

It’s an important question as it immediately takes one back to the ambition its founders have with the app.

myGate founders say that the discovery of local and domestic services on the app is just for convenience, a nifty add-on. Daga and Vijay Kumar are convinced that their app will make it through as is, minus ads. They strongly state that they will not sell their customers’ personal data for advertising of any kind. Besides, it’s not like they’re looking much beyond the gate. At least, not yet.

On being asked about further iterations for the app, Vijay Kumar says, “As of now we have no such [plans], we have not put any thoughts around it.”

“We believe in our product,” Daga chimes in. “And we don’t need the clutches of advertising to support us.”

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