MyGate, a community management app, has announced a buyback of 20% of vested shares for over 50 employees who have completed four years at the firm. The buyback has come on the back of improved financial results for the Bengaluru-based company in the last and current fiscal year.
MyGate’s growth and profitability
MyGate provides security and convenience services for gated apartments, such as visitor management, society accounting, payments, and help desks. It also enables residents to access various services and e-commerce platforms through its app.
The company has grown rapidly without raising venture capital money for nearly four years. It claims to have over 2 million homes across 10,000 societies in the country as its customers. It also said that it achieved zero cash burn in November 2023.
The company’s operating revenue jumped 77.3% to Rs 71.10 crore in FY23 from Rs 40.1 crore in FY22. During the same period, it managed to cut losses by 35%. The company primarily generates income through subscription revenue from resident welfare associations and from brands promoting themselves on the MyGate app.
MyGate’s funding and valuation
MyGate raised $56 million in a Series B round in October 2019 from Prime Venture Partners, Tiger Global, and others. Later, it raised strategic money worth $12 million from home service marketplace Urban Company and insurance provider Acko in November 2022.
According to regulatory filings, the company was valued at around $170 million post-money after the Series B round. After the allotment, Prime Venture Partners remained the majority stakeholder holding 25% stake, followed by Monteverdi International Limited, which led the Series B round with 22.23% stake.
MyGate’s ESOP buyback program
MyGate has initiated a buyback program to reward its long-term employees and reduce the outstanding equity share capital. The company reasoned that the buyback will optimise returns for shareholders and enhance share value.
The company has approved to buy out a total of 132,320 equity shares worth Rs 37.2 crore. MyGate’s co-founders Vijay Kumar Arisetty, Shreyans Daga and Abhishek Kumar collectively tendered 34,668 equity shares for buyback. Arisetty sold shares worth Rs 3.26 crore, while Daga and Kumar offloaded equity shares worth Rs 3.22 crore each.
Post buyback, Arisetty remains the largest individual stakeholder controlling 14.8% stake while Daga and Kumar own 5.73% and 5.5% stake respectively. The company’s ESOP schemes constitute 7.25% stake.
MyGate is not the only startup to announce ESOP buyback in recent times. As per data compiled by TheKredible, the total EOSP buyback/payout/liquidity in 2023 stood at nearly $802 million, creating a new record. Last month, edtech company Classplus announced ESOP buyback for more than 150 employees.
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