Security management and convenience service for guard-gated apartments MyGate has emerged as one of the promising products in the past year. Its potential was also validated when it raised $56 million in a round led by Tencent and Tiger Global.
Fuelled by the mega-round, the company is slated to register outstanding growth in the ongoing fiscal. It registered 3.9X growth in operating revenue in FY19 to Rs 5.83 crore from Rs 1.51 crore in FY18.
According to its annual financial report, the Bengaluru-based firm has burnt 5.6 times more cash amounting to Rs 32.32 crore in FY19 when compared to Rs 5.77 crore in FY18. Out of the total expenditure, employee benefits expense alone stood at Rs Rs 20.45 crore. It recorded a 5.8 times jump in FY19 from Rs 3.51 crore in the preceding fiscal.
Curiously, other employee-related expenses (part of an overall employee benefits expense) increased 51.5 times to reach Rs 7.6 crore as compared to Rs 14.74 lakh in FY18.
The second-largest expense of Rs 5.35 crore was incurred on the cost of materials consumed by the company to procure and manufacture the security devices for its products namely e-Intercom, Overstay Alerts and Number Plate Recognition among others.
To penetrate the market further, MyGate also spent Rs 1.3 crore on advertisement and promotions in FY19, up 7.6 times from Rs 17.12 lakh it spent for the same in FY18. Meanwhile, unexplained miscellaneous expenses amounting to Rs 2.4 crore, increased by 13 times from FY18.
Like any other funded early-stage startup on the cusp of its growth cycle, MyGate’s financials reflect the increased spending due to the funding it received and the corresponding growth in its revenue figures. At the end of the year ending March 2019, the company’s net loss ballooned by 9.3X to Rs 25.33 crore from Rs 2.73 crore in the previous fiscal.
MyGate’s fixed assets increased by 5.5X to Rs 2.05 crore in FY19 from Rs 0.37 crore in FY18. Its total assets jumped by 4.7 times to Rs 69.3 crore from Rs 13.73 crore in the previous fiscal.
Last year was momentous for MyGate. It raised a hefty Series B round in October 2019 and claimed to handle 45 million check-in requests a month. Around the same time, the company had said that its product was used by more than 1.2 million homes across 11 cities.
Although the company hasn’t seen much competition, Reliance may pose a threat via JioGate. JioGate offers a similar solution for gated societies.
While MyGate has been leading the pack in the segment, Reliance’s strong touchpoints with consumers through retail, telecom including media network may help JioGate in gaining quick ground.
GateKeeper, NoBrokerHood, Smart Guard, Lockated are other visible players in the segment.