MyGate, a Bengaluru-based tech company, was founded in 2016 by Vijay Arisetty and Shreyans Daga. It is a mobile-based security management solution that is designed to provide security to gated communities and societies. MyGate’s primary services include visitor management, e-intercom, clubhouse management, payments, and security, among others.
MyGate secured its first round of funding in 2018, closing $2.5 million in Pre Series-A funding. This was quickly followed by another funding round in late 2018, where the company raised $9 million in Series A funding led by Prime Venture Partners.
Continuing to experience success, MyGate raised $56 million in Series B funding in early 2022, led by Tencent Holding Private Limited and Tiger Global Management, with participation from new investors like Sixth Sense Ventures, JSW Ventures, and LGT Lightstone. The funding was aimed at extending MyGate’s leadership in the security management space, boosting product innovation, expanding to new geographies, and hiring talent.
However, things took a turn for MyGate in February 2023, when it initiated a massive layoff. According to our sources, the company laid off around 200 employees, which is 30% of its workforce. The move caused quite a stir in the startup community, with many speculating about what led to such a major cutback, considering the company had recently secured a sizable funding round.
MyGate’s decision to layoff employees was attributed to a “funding winter” that ensued after the company closed its funding round. The startup industry in India has been going through a rough patch for the past eighteen months, with the pandemic adding to the woes. Startups in the country have reportedly seen funding dry up, putting pressure on their revenue models.
In a statement issued by the company, MyGate’s co-founder and CEO, Vijay Arisetty, explained the reasons behind the layoffs. According to him, the company was forced to restructure its operations and refocus its resources to meet the current market realities. The CEO also added that the decision was a painful one, and it was taken after exploring all possible alternatives.
The layoff seemed to have taken a toll on MyGate’s stakeholders, with some criticizing the move as being insensitive and unfair to the affected employees. However, the company’s founders and investors defended their decision, claiming that it was a necessary step to ensure the company’s long-term survival.
In an interview with a leading business daily, Shreyans Daga, co-founder, and managing director of MyGate, reiterated the fact that the decision to layoff employees was not an easy one but was taken after careful consideration and analysis. He added that the move was aimed at aligning the company’s resources to stay competitive
The layoff episode at MyGate has underscored the current challenges that startups in India are facing, especially in terms of fundraising. However, it also shows that companies need to be nimble and quick to adapt to changing market realities to stay competitive. As the Indian startup ecosystem continues to mature, startups need to evaluate their operations, revenue models, and hiring needs, and make appropriate adjustments to survive and thrive. It is crucial for startups to strike a balance between growth and profitability, and this will demand continuous strategic thinking, monitoring, and adaptation.