MyGate burns Rs 80 Cr to make Rs 15.4 Cr in FY20; dismisses 120 employees

The security and community management platform MyGate had a bittersweet FY20 marked by an increase in revenue but also a significant increase in net losses. Although growth in size was evident, the company burned a large portion of its growth capital to achieve it.

MyGate’s operating revenue increased 164.7% from Rs 5.83 billion in FY19 to Rs 15.43 billion for the fiscal year ended March 2020. The company made an additional Rs. 7.6 billion from its financial investments over the same period.

MyGate

At the same time, however, the Bengaluru-based company posted a balloon loss of more than 126% from Rs.25.3 billion in FY19 to Rs.56.6 billion in FY20, which was marked by a significant increase in spending. The EBITDA margin improved slightly and was -240% in FY20 compared to -285% in FY19.

MyGate had secured $ 56 million in Series B round from Tencent and Tiger Global at the end of FY20. This was the largest round of funding for any startup involved in corporate and community management.

The startup, supported by Tencent, mainly generates income from the sale of subscription services to companies and the sale of advertising space on its platform.

MyGate had Rs 50 crore in employee benefits, 90% of which went to directors

MyGate saw total welfare expenses increase 144% to Rs 49.88 billion in FY20 compared to the previous fiscal year. Of this, 90.2% – which is roughly Rs 45 crore – was paid to the directors.

In fact, director compensation was the largest cost center for the company in FY20, as payments to MyGate directors represented 56.5% of the company’s annual costs, which increased 3.6 times to Rs 45 billion in FY20 are.

MyGate

In addition, the cost of materials also increased 88.2% to Rs 11.01 billion in FY20 from Rs 5.85 billion in FY19. Rental costs paid out during this pre-Covid financial year also exploded 4.1 times to Rs 3.73 billion in FY20.

During FY20, legal and legal fees paid by MyGate increased 4.6 times to Rs 5.8 billion, and advertising and advertising expenses increased 180.8% to Rs 3.65 billion over the same period.

The company spent a total of Rs 79.6 billion in FY20 and saw annual costs increase 146.4% from Rs 32.3 billion in FY19. MyGate spent Rs 5.16 in the fiscal year to raise a single rupee in operating income.

MyGate

We contacted MyGate with a detailed questionnaire based on these numbers and will update the story if they respond.

MyGate has asked hundreds of its employees to quit in the past few months

The company also laid off hundreds of its employees across all of its branches in May as the country was devastated by the devastating second wave of the coronavirus crisis, several people affected by the company’s decision said Trickypedia

Five former employees of the company, who were asked to resign after April, told us the company laid off between 500 and 700 employees in multiple branches, citing poor performance.

As reaction to Trickypedia’s With a detailed questionnaire sent out on Thursday, MyGate co-founder and CEO Vijay Kumar Arisetty disproved these people’s claims.

“We have a biannual performance evaluation cycle; one in April and one in October. As part of the April cycle, 10% of our team (~ 120 people) across all industries and regions was affected, ”said Arisetty Trickypedia… He added that the company has hired over 600 people since October 2020 and is currently hiring 150 more.

The people we spoke to also said they were asked to step down without formal written notice. However, according to Arisetty, those affected were duly informed according to their employment contract. MyGate has not clarified whether affected employees were notified in writing.

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