In cities such as Bengaluru or New Delhi, it is not unusual to see people reaching offices half an hour or an hour early just to find a parking spot. These unfortunates can be seen driving in circles every day looking for a vacant spot, trying to sweet talk or bribe the security guard of a nearby shopping centre or restaurant, or shouting at another driver who backed into a space they had been racing towards.
It is nightmarish. In fact, it should have been Parking on Elm Street, with Freddie holding up a ‘Parking full’ board anywhere you turn.
Thankfully, today we can exorcise such horrors with parking-technology apps. One such is Park+.
When the start-up’s founder Amit Lakhotia was working in PayTM, he observed that the guard at the entry gate did not know if there were parking spots free. Only a guard at the exit gate knew that. But if the first guard went out on a limb and said, no, there weren’t any free, then Lakhotia had no option but to try his luck at Noida Authority’s parking that was 500 metres away. Here again, he could be turned away and then he had to drive on and look elsewhere. In all, he spent 15 to 20 minutes daily on this merry-go-round. “It was a criminal waste of time,” he says.
Lakhotia began thinking that there would be others like him, losing minutes and hours this way, and that’s how the idea of the app came to him. In 2019, he founded Park+, an app-based platform that offers cloud-based automated parking systems for B2B establishments and daily commuters. The platform primarily allows a user in parking discovery, booking, payment and tracking.
Lakhotia had been in the teams of many popular start-ups by then, such as MakeMyTrip, Indonesia-based Tokopedia, and of course PayTM. All of it contributed to his understanding of what makes a product unique. At MakeMyTrip, his role was to build the entire B2B business and to scale up the company to give an annual turnover of Rs 5 billion. Post that, he moved on to PayTM, which was in its early days. Here he built the entire payment business including applying to RBI for the wallet licence, launching the wallet, getting investments and introducing QR codes. Before Park+, his last job was at Indonesia-based Tokopedia, “a Flipkart equivalent in Indonesia” where he helped them build the digital and fintech business. But Amit was looking to do more and he returned to India.
He realised by then that success was not always about getting 100 million or more users on a platform, with only a fraction of them transacting frequently on it. He wanted to focus on building something that will have users returning to it and willing to pay for the service. For this, he drew on a learning he gained in Indonesia. In the Southeast Asian country where per capita income is 2x that in India, he noticed that people were not so intent on making small savings in purchases. However, the scene was different here. “A typical Indian user alighting a flight from Delhi to Mumbai will open three apps, and try and see which one offers the best rate. He or she will spend an extra half-hour to save that Rs 50,” he says.
In Indonesia, with more money to spare, they didn’t mind the added expense. “When people have the money, if you give them the right product, they will not be too concerned about Rs 1 or Rs 2,” he says. Therefore, in India, he decided to focus on the top 20% by earning.
With his app, customers can find out where parking is available, book a slot and pay. It allows users to drive in and pay, or reserve a space and pay beforehand. Once a booking is made, the lot operator is alerted with the registration number of the vehicle. The start-up, which has tied up with private establishments and government contractors for parking spaces, earns 10-15% per drive-in bookings and sells passes for Rs 1,800 per month for site-specific passes and Rs 2,500 for city-level passes. It currently operates in Delhi NCR, Mumbai, Bengaluru, Hyderabad and Pune, and has in total 50,000 slots. Around 70-80% of the spaces listed on the app fall under public parking and the remaining includes hotels, malls and restaurants, which are only available through this platform.
Lakhotia draws a lot of confidence from the faith investors have shown in him. The company has received funding worth $12 million through pre-Seed and Series A funding, from Matrix and Sequoia as well as angel investors such as Deep Kalra, Kunal Bahl, Rajesh Magow and Kunal Shah. “I got lucky with my first set of funding because of my background and track record. Sequoia had worked with me at Tokopedia, had seen me operating and was excited when I told them that I wanted to start my own business. Then Matrix joined in and then other investors I had worked with. They wanted to invest (also) because this was a great problem to solve,” he says.
Matrix Partners India is an active early-stage investor. The firm’s director Rajinder Balaraman says that they have been highly interested in mobility and auto tech over the past decade. “We like new models changing the way India interacts with mobility. One of untapped segments was last and first-mile experiences in mobility. Personal mobility expense and parking are experiences that need innovation,” he says. This involves shared and personal mobility and, in the latter, he believes, the biggest problem is parking.
Balaraman adds that now with most things in India, physical infrastructure takes time to create but digital infrastructure can leapfrog. “It is not that there is no physical infrastructure,” he says, “but without technology, there is no visibility or ability to authenticate transactions.” For example, if there is a hospital next to an office building, the latter can open up slots to allow outsiders to park in their building during particular hours. The app can take care of the payment and authentication. Park+ gives private property owners the opportunity to lease out space in their parking lots through a verified system. So, it is not just about conventional parking slots. The technology helps extend the available infrastructure.
Given this and Lakhotia’s experience, in building a business, the investors were hooked. As an early-stage investor, Balaraman says that the founder's capability plays an important role. “He is experienced and repeat founder going after a large pain point in a sector we understand well. He understands how to build a business, and scale product and tech companies… there are few founders who understand that,” he says.
At Deloitte, partner PN Sudarshan agrees that parking is a pain point waiting to be addressed, but adds that it is not an easy market to capture. “We have had parking solutions being propounded in India for many years. But they haven’t found the kind of momentum that fintech has got. I think one of the reasons is that parking is micro market-oriented,” he says. That is, they have to sell to airports, offices or parking providers, who then have to sell it forward to the consumer. With B2C products, it is easier to find mass adoption, but with B2B2C products such as parking tech, they have to build something that is scalable and works for the end users and the intermediaries.
Then there will be competition coming soon and Lakhotia is cognizant of that. Some of the other companies in the segment include Simply Park and YoParker with a similar product and Park24x7, which is a marketplace. Lakhotia believes that the customer will ultimately choose the better experience. “The right inventory is important. We can't be in a situation in which there is a parking spot and it does not get honoured. Our success will depend on how good we are at fulfilment and at inventories, and at communication. It does not depend on our competition,” he says.
According to Deloitte’s Sudarshan, going forward, for a parking technology company to stand out, value-added services will be essential. This could include having a car wash service at location, minor repair facilities and charging stations at the parking spot. “It is about making use of the idle time when the car is parked at the spot,” he explains.
Park+, as the name suggests, is already betting on this. It is expanding into buying and renewing insurance coverage, paying challans, listing information on RTOs, and buying and renewing FASTag passes. They are also tying up with OEM and EV companies, acting as an intermediary between the companies and parking operators, and setting up charging points at these locations. So, if an EV is parked through the platform, it can also use the charging facility. Their latest partnership is with Ather Energy, an electric-scooter manufacturer to set up their charging grid at 10 locations in Mumbai. This service is currently free till September 2021.
Matrix’s Balaraman believes that this ‘+’ feature gives the start-up a wide moat. “If another competitor has to copy Park+, it is not one thing, they have to copy multiple things Park+ is solving for the user and that is not easy,” he says.
While the company was founded in 2019, the app was launched in the market only in September 2020. They had a version of the product ready for the market in February 2020 but pandemic threw a spanner into the works. Lakhotia says that it ultimately gave them more time to come out with a better product.
In the coming days, he believes that they will be covering about 2% of all India’s car base within 15 months of operations, and they plan to reach 5% (1.5 -2 million users) in the next six months. While they do not plan to expand to new cities in the next two to three years, they are looking to increase densification in the existing cities. “Once the COVID-19 situation improves, we will be looking at new cities and increasing density within the existing cities,” he says. Ultimately, they want to give the customer a parking spot within two to three minutes from their location.
In 2022, Park+ is looking at international growth in locations such as Indonesia and the Middle East, where they have the infrastructure but not the right apps. Lakhotia believes that, with the right technology, the earning potential in these markets is high.
The pandemic has paid put to many entrepreneurs’ plans. But once the waves recede, we will still have cars to park and empty spots to find. Therefore, if Park+ has the investor money to wait this out and uses this lull to improve its customer experience with reliable listings and partnerships, it may just have a winner on its hands.