Full Transcript

Dhruv Sharma: Hey there listeners, we hope your Monday is off to a solid start. Our guest is our first guest for the day is here with us already and today we're going to jump straight into it. This is Pankaj of CoStops. Pankaj, welcome to the show.

Pankaj Parwanda (goSTOPS): Thank you. Awesome.

Utsav Somani: So you and Pallavi doing corporate jobs and then backpacking in Europe and your first hostel in Varanasi in 2013. Connect all the dots for us.

Pankaj Parwanda (goSTOPS): Working in corporate careers staying at five star hotels, did not know something called hostels exist. Said yes to a random trip that a colleague was planning to Europe. I'm so glad I said yes, staying at a hostel across Europe initially wasn't too sure why I was staying in hostels till the third, fourth hostel I realized.

Utsav Somani: Have we lost Pankaj early into the stream?

Utsav Somani: The story was getting exciting, but while we wait for Pankaj, what is up on Twitter? Did you see the YC startup school in Bangalore? Oh yeah. All the discussion around it, positive, some negative also.

Dhruv Sharma: It was a mixed bag, but what 2000 people in a single venue.

Utsav Somani: Apparently they had the highest number of applications, it's the biggest startup school also that they've done, like 25,000 people applied. They're getting $25,000 in credit also, like the AI credits to build their companies. So I think that's the more attractive part of it. People like trying to bid on people who are not going to use the credits and want to sell, get rid of their credits.

Utsav Somani: Anyway, we've got Pankaj. Pankaj is back. All right Pankaj.

Dhruv Sharma: I have to say any founder story that starts with travel makes it sound a little bit like shoe dog, you know, and these are the most exciting stories. So please.

Pankaj Parwanda (goSTOPS): Hostel life. Yeah. Hostel life. And I remember sitting at this hostel in Salzburg on bar stools and we just walked into a really noisy room. Everyone was making drinks with Tetra Pak juices and we had made four or five friends within five minutes. And I remember Pallavi telling me that, Hey, something like this should exist in India. I'm like, why do you want to open a hotel in India? She's like, tell me a hotel where people just mingle and make friends so quickly. I was like, yeah, there is no social hotel in India. And that idea sort of did not leave our mind. And we came back and we researched. And I remember taking the Dusshera holidays, we used to plan corporate holiday vacations together. And we used our Dusshera holiday to actually travel to Varanasi to search for properties, went to Goa. There used to be one hostel that used to exist in Goa at that time and understood there were only foreign backpackers who were coming and staying at hostels. Decided we're going to start one hosted foreign backpackers while we educated the Indian consumers about hostels. And then we've come a long way today. Today, you go on Goa, we go make my trip and the front icon, there's something called hostels there, right next to flights and hotels.

Utsav Somani: Some of the stuff about hotel stay and hostel stay is very, very obvious. Like, I mean, you're sharing a dorm in a hostel, you know, hotel, it's more private, you get room service and all sorts of other things. What are the non obvious things that you guys have discovered along this journey? Which I think booking a hostel for the first time might not be that obvious.

Pankaj Parwanda (goSTOPS): Like a dorm actually is the, is not really the main reason why people choose a hostels because for example, 30% of our capacity is still in private rooms, 70% in dorms. The reason people are choosing to stay at, and we have, by the way, a lot of hostels and business locations, for example, in Bangalore, we have four and we manage about 800 beds in Bangalore. We have another one in Gurgaon, Delhi, Hyderabad, high tech city, et cetera. So one would wonder why young people are choosing to stay at hostels while they travel to these places and the people who are staying with us, just to give you another number, you can't walk into a ghost house without a mobile app and 70% of the mobile phone downloads, the app downloads that we have are iOS users. So these are not really people who deal hunters who choosing a cheap stay. They're generally people who can afford really good stays and people who are choosing to stay with us in business location, work with companies like APMG, every VC boardroom that I walk into, there are analysts who are ghost house fans and consumers. So the reason that people are choosing to stay with us is not just because the dorms, but actually because there is no other social hotel that exists. So the reason they're coming here is because evenings are going to be a lot more experiential than it would be in a budget hotel. That would be events that would be curated by the brand. And there would be other like-minded people who want to mingle. And that's the reason people are coming. So people are coming for a lively hotel than a boring, commoditized hotel.

Dhruv Sharma: Has that been the key, learning the key insight, Pankaj, in hindsight, like one would imagine off the bat, it must have been things like hygiene and cleanliness and, you know, safety and, but this is very interesting what you're saying.

Pankaj Parwanda (goSTOPS): Yeah. So hygiene, safety, etc. These are non-negotiable. So you've got to give them, yeah, if you don't give them, definitely people will be unhappy with you. But then there is the real reason why people are choosing to stay with you. And if you give those is why you will build loyalty and you will have a consumer coming back to you again and again. And that is the social experience, which means I've got to make sure that as many people congregate together in a common space at a finite amount of time, and they interact over a specific activity. So even though people want to socialize, they want to meet other people, but they're very hesitant to make that first, you know, initiative to be able to get into a discussion.

Dhruv Sharma: Would you give us a sense of what the activity might be in a business location, for instance, I can imagine what it might be in Himachal, but in a business location, what's the activity people are bonding over?

Pankaj Parwanda (goSTOPS): They'd be a movie night, we'll serve popcorns and yeah, coke and people will come together in the home theater and watch movie together and they will, the balls will come down and people will become friends. And similarly, there'll be a mafia night, there'll be some other night. So yeah, there'll be an event every day.

Utsav Somani: And you must have gone through two lives, right pre COVID and post COVID. So give us a split of foreigners earlier, I'm guessing formed a bigger portion of your customer base. And now I think it's mostly Indian tourists. And are they looking for different things as well? Is it mostly solo? Is it mostly couples? Is it what kind of split like, in terms of international, Indian, solo, non solo, like what's the buy like?

Pankaj Parwanda (goSTOPS): So our aspiration was to build for the Indian youth, the younger Pankaj and Pallavi, we wish we would have had access to hostels when we were traveling and young. So we put a conscious effort in distributing our inventory to Indian online travel agents, sort of finding a product market fit and actually tweaking the consumer to what the Indian consumer would like rather than a global template in Europe. The European hostels are supposed to be very frugal form of accommodation, whereas the Indians have actually used hostels as their lifestyle. Social hotels of choice. So we had put in the conscious effort and which is why just before COVID hit us, we were already at 90% Indians and 10% foreigners, COVID made it obviously 100% Indians. How the landscape has changed through COVID, even though COVID was such an unfortunate event. But I think what it's really done is we are not the same people that we were before COVID. We have become people who understood how fragile life is. And we sort of started giving a lot more value to our well-being after COVID. So which would essentially mean that people have started taking many more mini breaks than they would before COVID. People have begun to spend a lot more on great experiences than they would before COVID. So all of that has really led to this category sort of picking up through COVID, where we used to operate at an average ADR of 300, 400 rupees before COVID. Today, we operate at an average ADR of 1000 rupees a night, where we used to operate with eight to nine room homes converted into hostels. Today, we have access to large 50 room hotels with pools on rooftop, and they're going crazy with it. So the consumer is willing to pay and consumer wants to pay a lot more for experiences and is willing to take or absorb these experiences a lot more often through the year.

Utsav Somani: And versus a hotel, like I mean, are you expecting more revenue to come from per bed cost to 1000 rupee cost that you mentioned or the revenue figure that you mentioned? Or is it more on services like somebody 1000 rupees a night, but if he spends 1000 rupee on top of like food or other services, why are you? It's both.

Pankaj Parwanda (goSTOPS): So there's a big stickiness that's sort of evolving with the brands that people are choosing to stay with. For example, we give a very highly tech enabled experience in the budget hospitality space. For example, even if you need a bucket and a mug in your bathroom, you actually raise a ticket on the mobile app. And it gives you a transparency that your ticket is going to be closed in 15 minutes. The food ordering experience of the lock the door that you open in the room or in the lockers, everything is digital and on the app. So these kinds of features are sort of creating stickiness with specific consumer cohorts and the cohorts are sort of becoming loyal to the brands of their choice. So that is sort of leading to a lot more willingness of these consumers to pay higher ADRs to stay with the brand that they prefer. And then there is an opportunity to be able to solve their real hassles while they travel. For example, they would essentially want to make their travel arrangements in terms of, you know, bus bookings first, or while coming back, they would love if a brand can actually make sure that a bus operator of their choice, like a Zing bus, etc, can actually stop by their hostel and pick them up. So there is a lot more possibility in ancillary revenue stream, we already do about 15% additional revenue through food, we do about 5% additional revenue through experiences, and then they're building several layers on top.

Dhruv Sharma: That's actually insightful, again, because 1000 rupees seems like, as a price point, I'm assuming it's, it's, it must be tough to extract profitability out of that price point. Do you want to?

Pankaj Parwanda (goSTOPS): Oh, no. Yeah. So there'll be actually the most expensive budget hotel chain in the country. So for example, a Loyo, Tribo, or Fab would operate at, say 1500 rupees a night, average ADR. For us, if our average ADR per bed is 1000 rupees, and our average bed per room is five, which means our every single room is going to 5000 rupees, while they're monetizing the same asset that a budget hotel operator will go after.

Dhruv Sharma: Yeah, let's stay with this for a minute, Pankaj, we want to get a sense from you on how you do site selection. You guys have, is it the numbers closer to 30? Is it please tell us is, is how many establishments you manage 30 hostels and 3000 beds? And how have you picked those 30 different locations?

Pankaj Parwanda (goSTOPS): Yeah. So what we do essentially is we look at our existing base, and try to see what are the source cities that people usually come from who stay at our hostels. So say, for example, a hostel, we have significant presence in Uttarakhand, for Uttarakhand, a major feeder city would be Delhi, but then a very important Uttarakhand feeder city is Lucknow, or a Muradabad. So one needs to follow the source instead of the destination. And then you go to the source, the second biggest source, say Lucknow. And then you see where else is Gen Z or young people from Lucknow traveling to, and then you go and scout for a location in that particular place. So for example, a lot of Gen Z's from Lucknow actually travel to Varanasi to get their exams. There are a lot of SSC exams, etc, that people travel to Varanasi to. So Varanasi becomes an important location for us to expand to. So similarly, we would basically follow our sources and give people in Lucknow who've discovered us in say Nainital, a lot more options to sort of get the brand and the experience that they really valued in Nainital in other locations.

Dhruv Sharma: But Uttarakhand is, for instance, is a seasonal location. So when you're constructing a portfolio of 30 different establishments, then how do you factor in, you know, things like seasonality and, and, and how does that calculus work?

Pankaj Parwanda (goSTOPS): Yeah, so seasonality, sort of, so seasonality doesn't really affect the profitability, because what happens is, if there is a location with the highly seasonal nature of business, the ADRs will be a lot higher. So ultimately, revenue realisation of every bed will be almost similar in all of the locations and revenue realisation per bed is what determines ROI on the capex investment per bed, right? So but seasonality, yes, it has an impact. So one has to balance for that seasonality in terms of the cash flow impact on a portfolio level, which means if I'm adding a certain number of beds on occupancy, what does it have an impact on? Occupancy, yes. So for instance, to give you an example, business destinations like Bangalore, Gurgaon, Delhi will operate at 85% average annual occupancy, whereas leisure destinations will operate at 50% average annual occupancy. But the ADRs, then the ADR in a business location will be 600 rupees, whereas the ADR in a leisure location will be 900,000 rupees. So ultimately, revenue realisation, there is only a 20% difference between business and leisure location, which means a business location will have 20% higher revenue realisation as compared to a leisure location, but the rental in a business location will again be 20% higher as compared to a leisure location, which means ultimate net EBITDA per bed will be similar in case of a revenue in a leisure or a business location.

Utsav Somani: And you've identified the location. So thanks for sharing that philosophy. But also, once you've identified the location, you operate on two models, which is CapEx Lite Lease and then Franchisee. So how do you decide between the two and which one is a focus for you going forward? I'm guessing you have more control in the leasing model.

Pankaj Parwanda (goSTOPS): Yeah, so we don't do franchise operated yet, we only do company operated. So in company operated, we have two models, which is either CoCo where we invest the transformation CapEx, we take a hotel as is and we convert it into a hostel and operate. And the other is FOCO or Franchise Invested Company Operated, where the asset owner will invest the CapEx and we will operate. But both of these are essentially leases, one is a bare bone lease and the other is a furnished lease. And what's the split in your current portfolio between the two? So 40% is FOCO and 60% is CoCo.

Dhruv Sharma: But they're both COs, so definitely the company likes to own and run all of all of the different properties. And what does that give you control over? Why do you guys do that? Why is that so important to you? I know others who don't do that. Experience.

Pankaj Parwanda (goSTOPS): Yeah. Customer experience. Yeah. Basically, we're going after the long tail hotel supply, which are these small hotels, which are 20 to 50 room in size. And the problem that we're actually trying to solve on the supply end also is the fact that these small hotel owners, which is what Oyo Tribo and Fab went after and did a fabulous job on actually bringing them under a digital umbrella, giving them access to a brand, giving them access to certain standardization, digital marketing and revenue management and online distribution. But the layer that got sort of unsolved was the operations layer. And these people who own these hotels, they are SME business owners. So they don't, they've done well for themselves in their own business. And they don't have the time or the motivation to get into the operations, day to day operations of that hotel. So one needs to build a lean, mean tech enabled operator, new age operator for these assets, which is what we are building. And we're selling this inventory to 20 to 30 year olds through a travel hostel model.

Dhruv Sharma: Have you guys set your eyes on, you know, South, the South neighborhood or any, any other sort of regional, but expansion plans?

Pankaj Parwanda (goSTOPS): Yeah. 100%. As in young Indians who now have a hotel brand of their own, just like, for example, in 2006, when I and Pallavi entered the workforce, they really used to be Taj's and Marriott's or they used to be really unorganized hotels. That's when Leventry and Sarovar Portico came in. They gave us access to standardized, smart hotels while we were traveling for business. And then we were like, Hey, this is the experience that we want and deserve. And we're going to take our families when we travel for vacation to our Leventry and Sarovar Portico. You know, similarly, now young people have their own Sarovar Portico and Leventry. So it's only obvious that when they now start traveling to neighboring countries like Vietnam, Thailand, et cetera, they should have access to their own Taj or their own Leventry. So yes, it makes sense. But today I think India is so vast and we're, we finally sort of, we're at the tip of the iceberg. So there's a lot of ground to cover in the mainland itself.

Utsav Somani: And is loyalty reflected in your numbers as well? Like how many people book via the OTAs or how many people come to you directly?

Utsav Somani: 80% of our repeat users book direct.

Pankaj Parwanda (goSTOPS): So every, and in terms of our growth, in terms of repeat users year on year is about 67%. So it means 67% repeat users are coming back to book with us and 80% of them are choosing to book direct. It's a, so another data point, for example, Leventry today, and they publicly published their results. 5% of their bookings come from their websites. We have 70% of our bookings that come from our website. So there's a large sticky dot there.

Utsav Somani: And just zooming out a little bit in the travel industry, a lot of the properties which are new and upcoming, anybody who wants to get into the hotel space or the hostel space, OTAs are a necessary evil. Like do properties enjoy working with them? Are they fair?

Pankaj Parwanda (goSTOPS): OTAs are a necessary partner than an evil. So in fact, we, even though we can essentially go D to C and the consumer is digitally native, right? So they can easily come on our digital channels and sort of book direct. But the reason that we keep, and in fact, we continuously keep balancing our direct and OTA share. It's not like we want to take all the share because we don't want to only rely on our marketing muscle to be able to grow this category. We actually want more partners to spend their marketing budgets and help us grow this category. So actually we went to 70% direct and then we had to start giving away some business to OTAs because OTAs should also, OTA algorithms should also see enough conversion happening on their algorithms. And they should also put marketing might be kind of the category. So yeah, so they're a necessary partner and which is why we balance direct and OTAs.

Utsav Somani: And what's the average stay duration and you're focusing on longer stays as well now, vacations and co-living as well? Yeah.

Pankaj Parwanda (goSTOPS): So our average length of stay is 3.1 nights across the chain. And yes, we are focusing on long stays. There is a significant opportunity. For example, in off seasons, we know almost 20, as high as 20% of the business and leisure locations can come from people who travel for five days and more. So which means people, when they get very attractive opportunities to go to a Vagator in the summers or say a Rishikesh during the monsoons, our rates come down to as low as thousand rupees a week and people are happy to sort of go chill in solitude at that point of time. Besides that, we have people who are staying with us for 100 plus nights, there's almost 3% of our consumer base who stays with us for 100 plus nights. And there is a reasonably high number of consumers who stay with us for 50 plus nights in a year. These are people who stay with us in business locations. So these are people who would live in satellite towns around the main metro cities and would have a work from home sort of a remote hybrid arrangement. And they would keep traveling into the city, keep traveling out and what they want is flexibility. In fact, we've had several of these 100 plus night people coming to us and saying, hey, can you sell me 100 nights at one go, but give me an ability, just like a gym pass to pause and resume. So I can just pause and say, Hey, now I'm going back home and then I'll be back after Diwali.

Utsav Somani: So there's a question that's come up on our YouTube live stream. So I'm just going to ask it because I think some of the stuff you might have already answered before. What does user stickiness look like for GoStops? Specifically, how likely is a first time guest to book again? And what really drives that repeat behavior? So stickiness, first time guest likely to book again, and what drives that repeat behavior? Some of it might be covered by you.

Pankaj Parwanda (goSTOPS): Yeah, so 40% of a new user ends up booking one more GoStops, which means a new unique GoStops in the next 12 months. So 40% of every consumer will book and 80% of those 40% consumers will end up booking direct. So the reason that this sort of flywheel happens at the center of it is the CSAT, which is how great an experience am I able to give them when they discover me first. And at the heart of that experience, how important is the app that sits because app becomes the tools with which I get the customer back and sort of it makes a meaningful impact in their lives. So yeah, so at the heart of it is CSAT and that enables the 40% repeat and 80% direct repeat.

Dhruv Sharma: What different mechanisms have you guys implemented to collect customer feedback because you clearly have a pulse on your on your consumer's mind and a whole bunch of data. So what mechanisms have you implemented?

Pankaj Parwanda (goSTOPS): Yes, that's the most interesting piece. So unfortunately, till now, hospitality has been very tech lean or tech averse. We are blessed to go after a consumer cohort, which is not just very interesting, but also digitally native, which is the Gen Z's of India. They're very happy to punch buttons on the mobile phone and tell us how they're feeling. So which is why we could actually dare to imagine a hotel chain, which is app first, which means you can't even walk into a physical space without that app. You must have an iOS or Android phone to walk into it. Now, what it does for us as a business operator is it gives us a entry, a segue into the consumer's life, direct touch with the consumer when they're having this entire hospitality multi-touchpoint experience with us. So at every touchpoint, now I know what they're doing. So even when you even then they walk into our door and they're given a check in on the GoStops app and they walk into the room, the door opening is also a Bluetooth event. So I know when is the first time they open the door of their room, right? Right after that is when I send them a notification saying, how was your check-in experience? Tell me, how was your check-in experience? Did anything go wrong? Because check-in is a very important event that defines the overall feeling that the consumer will carry back. Similarly, when they order an F&B order and it's delivered within 30 minutes, I want to know how satisfied were they when they asked for the room to be cleaned again within 30 minutes. I need to know if we paired well. So Hospitality now has been reliant on an online reputation management system. The CEO looking at the reviews for at the end of the month, which is the trailing metric. We actually sitting at the center. We know how many people at the time of check-in are disgruntled or were not very happy and what can we do to solve it. Yeah, so it gives us a lot more journey level control and that's the secret source for us. And it's not just feedback. It actually gives us control over service delivery also. So for example, when a consumer raises a request for a bucket and a mug, it becomes a digital event on our system. And the system triggers a whole chain of events to ensure that this bucket and mug is delivered to the consumer in 15 minutes, because it's not like the delivery will happen in 15 minutes on its own. There are micro events that are supposed to happen to ensure that, which means within the next two minutes, the manager is supposed to acknowledge that if the manager is busy doing something else and hasn't acknowledged the ticket, it's not going to happen in 15 minutes. So if the manager doesn't acknowledge the ticket, it again escalates. And I have a central CX team sitting in the center, which has a fire dashboard and they know where all managers haven't accepted the ticket and they're going to be delayed at a customer satisfaction. So they would call the manager and say, hey, you have to start working on a bucket and a mug in Varanasi, in Uttar Pradesh or some other place in South India. And hence, this gives us the control.

Dhruv Sharma: How do you guys do, yeah, what's up, go ahead. No, no, please. I was just thinking how, because you were saying manager, etc., I was thinking, how do you guys do training and continued learning for, you know, for the manager and the rest of the housekeeping staff and so on and so forth?

Pankaj Parwanda (goSTOPS): Yeah, so for the managers, there is a full on-the-job training. Every new manager that gets recruited either from an HM school or a lateral hiring has to undergo a 21 days training, which will include, say, 10 days of classroom training and another 11 days of on-the-job training. Besides that, there is a mobile OTP based LMS systems that are in place and that are administered by the central L&D team, which would ensure that if a particular feedback curve or a feedback movement within a specific center is showing that consumers are facing an issue with soft skills of the managers or rudeness of the managers, then there would be a training that would be made to address softer skills. Is there an issue where they don't know how to handle a specific type of issue? And those sort of trainings will be made and then it will be administered by the central administrator, making sure that 90 percent or 95 percent of the people in that particular center go through that training and then also qualify on the quiz. And then there is a layer of L&D audit where the team would actually do a mystery audit. So we make sure to cover every center once in a quarter on to a physical exhaustive audit. And besides that, we also have a whole base of community of volunteers that we have who will actually end up doing at least one center, one mystery audit every quarter.

Utsav Somani: Sometimes, yes. So, Pankaj, our time is coming to an end, but two final tidbits from you. Where's the next fun location coming up and any fun story to end the fun travel story to end the segment with?

Pankaj Parwanda (goSTOPS): So very interesting, we just launched our new hostel in Katra, one would like, for example, in 2014, no one would imagine that we'd launch hostels in Bangalore and Delhi. You have taken two hostels like the default hotel category and a lot of young people are actually traveling to religious locations as well. There's a big spiritual travel wave that's happening. So Katra is our first experiment in that direction. And something interesting, we built this entire startup out of Delhi for the last 11 years. And right after we raised our city this April, we decided the entire company needed fresh energy and a change of city, which is why we moved our entire headquarters to Bangalore for April. And yeah, and we're loving the city.

Utsav Somani: Awesome. Thank you so much for joining us. Wishing you all the best. Thank you. Thank you. Thank you for having me. Thank you so much. All right, listeners, we're moving on to our next segment. We've got Amit of Park Plus joining us. Amit, welcome to the show. Hi, how are you? Good to have you on the show. So Paytm, Wallet, Tokopedia and then you start Park Plus. Then COVID hit. You've now become a super car app where basically, sorry, super app for cars. That fits a super car app. But one in every three cars or one in every four cars is now on your platform as well. So why choose parking as a solution, as a problem to solve?

Amit Lakhotia (Park+): So I think when we looked at a car owner problem point of view, like a lot of the problems of car owners, which are like things like servicing, insurance, buying, selling, etc., they are not very high in terms of frequency. You buy insurance once in a year, you buy servicing once in a year, you do a car buying or selling once in three, four years. But what are the problems which you face every day? So ask any car owner what is his biggest problem today? Whenever he takes his car out, he'll tell me, Will I get parking there or not? Am I going to get parking there or not? That's the problem which he will tell you. So we said, can we get with the problem which a car owner faces on a day to day basis? So that becomes our wedge, that becomes our entry point, saying car owners should be interacting with us far more frequently in the online world, in the offline world as compared to anything else. So that became the edge point. And like irrespective of what kind of car you own, irrespective of what kind of city you live in, irrespective of how much do you drive, irrespective of whether you are a male or a female, like the problem around parking is universal for everyone.

Utsav Somani: It's a daily active use case in most cases. Yes, yes.

Amit Lakhotia (Park+): And it is not only about parking, it is also about access control. Like, for example, am I allowed inside the building or not? Should someone stop me every time and check or ask me, Bhaiya, aapko kahan jaana hai? Like the system should be able to, in half the cases or 90% of the cases, should be able to determine automatically whether I should be allowed inside or not. Like, for example, you live in a society, you are a resident, nobody should be stopping you to get in. You work in an office, you are a corporate employee. Again, you should be able to get in without anybody stopping you. But from a security point of view, if you are a visitor at any of these places, you should be stopped. And rather than depending on the manual efforts of a security guard, which the profile which normally sees a lot of churn, it is impossible for a security guard to remember 1000, 1500, 2000 cases. So it is better if the system remembers it.

Utsav Somani: And you, I mean, expanded into multiple use cases as well. But I think what's more interesting is your April 2026 LinkedIn post that you just made where you announced that you had the first quarter of this calendar year to be the first profitable one for that. So do you want to share some insights on what really improved as you built this business?

Amit Lakhotia (Park+): Yeah, so I think, thank you. We became profitable last quarter. Last quarter was our first profitable quarter kind of a thing. It was hard because a lot of our businesses are sizably operational in nature. Our businesses are a combination of app, which you see as a consumer, but a hardware which is installed at roughly 20,000 plus locations across country as well as manpower, which could include people fixing those hardware, people doing valet, people selling fast tag, etc. Again, at all places across country in 60 plus cities. So making sure this whole system works seamlessly, delivering a great consumer experience is important and continuously working on both the sides, on the consumer side to improve experience, improve commercial structures and also on the supply side to improve experiences, reduce manual effort, improve automation, bring more consistency in operations, bring more consistency in terms of experience. That's something what we have been doing for the last six, eight months. So all the four or five businesses that we operate in right now, which is access control, valet, parking, fast tag, chalan, etc., we are number one player in the category by a fairly far margin and not only in terms of volume, but also in terms of customer experience as well. So last six, eight months, we said we'll just keep improving, keep improving, keep improving, put our head down, not focus on anything else, just keep improving both the sides, improve revenue, reduce cost. That's what we did. And obviously, that has started reflecting in the numbers as well.

Dhruv Sharma: Amit, is there a difference in the revenue drivers in tier one cities versus tier two, tier three cities? You've now expanded to 60 plus cities.

Amit Lakhotia (Park+): Yeah, I think sizably different when you look at from a ownership point of view, tier one would have a lot more parking and faster ground use cases. Tier two are slightly different. So, for example, access control kind of use cases are fairly sizable in tier one city. In tier two cities, there are limited number of malls, there are limited number of gated communities, etc. So in a tier one city, our access control use case would be like 50 percent of the revenue. But in tier two city or tier three cities, that would be only 20-25 percent of the revenue.

Dhruv Sharma: From a car owner standpoint, you must have data on what's the average length of car ownership in the country today. And then in a year, how much non-fuel spend do owners incur?

Amit Lakhotia (Park+): So typically, an Indian car owner keeps the car for about eight years. And it depends on city to city. The urban metro city would have an average of about five to six years. And if you look at tier two cities, it is typically nine to ten years. Actually, it is also a function of whether it is your first car, whether it is not your first car, also a function of what kind of car it is. So if it is a budget car, then there is a reasonable chance that you will actually keep it for eight, ten years. But if it is a more expensive car, then there is a reason. And if it is your second car, then there is a reasonable chance that you would get to a new car faster. And as like, for example, once you get to your third or fourth car, that is the point of time the flipping starts happening faster. Well, at that time, the flipping starts happening in third or fourth year itself.

Utsav Somani: Amit, you must have fascinating data because you're building this app for car owners, right? Which is, I mean, you control what, one in third car in the country now or one in four? What's the number?

Amit Lakhotia (Park+): One in third. Actually, slightly higher than one in third.

Utsav Somani: But crazy. So you're coming from, I mean, a background in Paytm and then Tokopedia, both pretty much super apps themselves as well. So you're bringing the learning here. What are the new things that you think you can do with this data? Like where does the Spark Plus advantage go from here?

Amit Lakhotia (Park+): So I think one important thing, the difference between my previous stint and this stint, see Paytm, et cetera, they tried multiple categories. Like, for example, Paytm, there is a payment, there is a lending, there is a mall, there is a commerce, there is a movie ticket, there is travel. In Park Plus scenario, it is car as a category. So while we are doing multiple verticals within this space, but finally it is car as a category, single focus on improving car owner experience. So that is the first thing. And when you think of a specific, so my user is very clear, it is the car owner. It is not a generic guy, it is a car owner. And improve his car ownership experience, which could be around things like Fastag, things could be access control, things could be like Chalan payments, et cetera. Like, I'll give you an example. A lot of car owners today submit their fuel bills for reimbursement in their office. Now, all of us would have taken those manual purchases from the petrol pump and after one month or so, when you go to the finance guy, first of all, half your purchases are anyways lost. And the second problem is, text on those manual sheets have gone away. So the finance guy will tell you what is written on this, I don't even know. Now, imagine if all your bills, all your fuel bills automatically become a part of a PDF, you don't have to do anything. You have to just buy a fuel voucher from Park Plus, redeem it, every redemption automatically creates a bill and that bill automatically goes to, that PDF automatically goes to your finance team for investment on first of every month. So you don't need to do anything. Same thing, like if we are able to connect to your car, odometer reading, then we can automatically tell you how is your mileage getting better? Is it getting worse? And what is the right time to get your car serviced? Like two years down the line, three years down the line, I visualize a future where I say, why should you go to petrol pump? Like the car already has sensors which tell you that less than five liters of fuel is left in the car. Park Plus already knows where is your car? Is it at your home? Is it here at your society, et cetera? Can a tanker come to your home and fill the car automatically? And you just receive a notification saying.

Dhruv Sharma: Is there any, is there any rule or any law that prevents these mobile fuel tanks? By the way, I've always thought about this.

Utsav Somani: There were a couple of IC companies which were doing this. Now MyFuelBuddy or something, I think it started.

Amit Lakhotia (Park+): See the problem with this kind of, there are two things. The problem is this can work out for a corporate segment because sending a fuel tanker for just a single car commercially will not work out. Viability will not come. There's a delivery cost, but it will work out for us because Park Plus has now your society, your office. There are already 700 cars, 800 cars standing there. Assuming one car refills in once a week, I have 100 refills happening every day. Now it will make commercial sense for a player like Park Plus because I can refill with the same tanker 100 cars. I can charge a 100 rupees service fee to every user. I can make 10,000 rupees out of which I'll give 5,000 to the tanker guy. He'll also make his money. I'll also make my money. I can do it. Others can't do it. And it is great consumer experience. Like why do you want to spend 10, 15 minutes just standing at the petrol pump?

Utsav Somani: I mean the data, I think even insurance, I think can be a big player. Like I read Tesla launched this insurance where depending on how you drive, your age and other factors, it gives you a different insurance premium. So if you have that kind of data, have you worked with insurance providers in India to see if insurance premiums can vary? It doesn't make sense if somebody's paying the same while driving worse than say somebody else who's hardly driving or driving better.

Amit Lakhotia (Park+): So I'll give you an example. Both me and my wife drive a Honda City. Now I come from Delhi to Gurgaon every day, which is 70 kilometers one way. My wife is mostly a homemaker. So she will use her car every day, which is primarily for picking kids, taking them to classes, etc. That's less than five kilometers a day. I'm going 70 kilometers a day, she's doing five kilometers a day. Both of us pay the same premium, insurance premium. Actually, they shouldn't be happening. She's driving less. She should be paying lesser premium. But today because our insurance company doesn't have any way to figure out this, both of us pay the same premium. Same thing, like I might be taking 10 outing trips a month, which means I am on the tour. Right, the other guy might not be at the tour. So I should be paying a more premium as compared to the other guy. Third thing is, do I do drink and drive? Somebody else might not be doing it. I might be doing it. So I know if you are coming regularly out of a pub at 10 o'clock and you are not using a driver, you are probably drinking and driving. Shouldn't this guy be paying a higher insurance premium as compared to the other guy? Yes. But because today this data is not available to insurance companies. And they can't put a different premium across. This data is there with Park Plus. Now, it is very easy for us to know how many tolls are you crossing. It is easy for us to know, do you have a covered parking or not? It's as simple as that. Is your car standing in night in the open parking or in the covered parking? Park Plus has this data. So gradually, it will become very easy for us to work with the insurance companies to bring more differentiated kind of products which are not available otherwise.

Utsav Somani: But right now, all these arrangements that you have with insurance companies or even people like used cars or different verticals that you have or the services that you offer on the platform, they're all third-party tie-ups or are you doing something full-stack like say valet, car servicing, car cleaning, any of them? Have you built out full-stack capabilities for?

Amit Lakhotia (Park+): Yeah, yeah. So access control is full-stack. Valet is actually full-stack. Charan payments is full-stack. Some of these activities which no one was doing and with the consumer experience wasn't guaranteed, we are doing full-stack. Some of the activities like for example, used car. Now, there are organized players which are doing a fairly decent job out there. So we are helping them both on the supply side and the demand side. With insurance, we have tied up it directly with the eight insurance companies so far. So we have a corporate agency license. So you can come and buy insurance on Park Plus app. So the idea is to start with first the regular insurance product and then gradually integrate deeper with the insurance companies with the data points that we have to provide differentiated products. Like to give you a more example, roughly about 20-25% of insurance today in India that is getting bought right now is pay as you go, which means if I drive 5,000 kilometers, can I pay only 5,000 kilometers rather than paying the full amount? Now, this kind of data points, how much a guy is driving, how well he is driving, where is he parking his car? Is he taking it on highway? How is his driving behavior? Does he rapidly accelerate? Does he rapidly brakes? Does he has a driver or not? Does he drives at night or not? Like all these data points are already there with Park Plus. So aim is over a period of next couple of years, we will work with insurance companies to make sure that they are able to incorporate these data points in their codes and then these codes can be given to the consumers. And what is also interesting is a lot of insurance companies are fairly excited with this. So most of the new insurance companies now are like, for example, companies like Lombard, companies like Digit, etc. Now they want these data points. They are saying, give us more data points, we will give you a better code. Today, they do not have data points. We have those data points. So it is possible for us to integrate with them as we make the data points more structured and our larger audience of cars. We today have 2 crore car owners on the platform. India would have a total of 4.5 crore car owners.

Utsav Somani: Because this already happens for health insurance, right? I mean, there was a health insurance plan that if they give you a tracker and your tracker data is good or you go for a checkup and if you are not a smoker or drinker, then your premium goes down. So all of these factors do play into health insurance premiums as well.

Dhruv Sharma: Have you set an internal target for like of all the users whose motor insurance is coming due, how many do you want renewing the insurance on Park Plus itself?

Amit Lakhotia (Park+): Yeah, given a charge, we want it to be 100%. We want it to be less than 100%. Obviously, we are starting that journey. The idea is like every incremental percentage point is helpful. If you are at 2%, get to 5%, 5, you go to 8%, etc. So right now, the first agenda is not in terms of targeting how many people should buy. The first target is we should provide a comprehensive product offering. Like when a consumer comes on the platform, is he able to see 6, 7, 8 insurance first of all? Is he able to feel that this platform covers most of his needs? Is the insurance buying journey, KYC journey fairly smooth or not? Tomorrow, if he needs help around claims, etc. Insurance is a trust business. We have to, I can't demand bookings from consumers till the time I have earned trust from them. So I'll have to first build those flows, build both on the servicing, both on the buying journey as well as on the claim journey before I can start expecting that they will transact in a larger number with me. My idea is like, can we get to like, first of all, 2%, 3%, 5% of our consumers buying insurance with me. If I get to like a 2%, 3%, 5% first, that's like a 2 crore, 5% is 10 lakh, a million policies a year. That's a very large number.

Utsav Somani: And you've already penetrated the market, not for insurance, but just for car owners significantly. Is two-wheelers also on the horizon or are you already covering them?

Amit Lakhotia (Park+): Not actively covering them right now. But typically a two-wheeler requirement, if you look at from servicing, insurance, buying, selling, it's similar. Just the ticket sizes are lesser, margins are lesser. So idea is keep going deeper into car space for a couple of more years. And every car owner in India would also have a two-wheeler at home. See, if you look at most of the car owners, they would have a two-wheeler at home. So gradually the idea is, if I already have that customer for his one set of vehicles, it would be easy for me to go to another set of vehicles. We don't have an exact plan right now for twowheelers. Over a period of time, we'll have to decide whether we want to go to the two-wheelers or we want to go to another vehicle category or we want to go outside India.

Dhruv Sharma: What about EVs, the EV wave?

Amit Lakhotia (Park+): EV, we are fairly sizable. Like roughly, I think 20-25% of all EVs in India already are on the Park Plus platform, maybe slightly higher. And we are working a lot on the installing the chargers and all that kind of stuff. So a year, year and a half, we are like the biggest, not the biggest, probably among the top three EV installers in the country, charger installers in the country. So fairly sizable network banaya tha humne. Then we figured out that the charging is still not monetizable right now. The people were expecting free charges and everything, that kind of stuff. Economics. That was happening at that point of time. But as the scale improves, the monetization will improve.

Utsav Somani: And what about customer acquisition? Is parking the use case that they discover you with or it's, I mean, the funnel is spread out across different things. And do you do offline activations where, I mean, you've tied up with distributors or anyone buying a new car via a dealer and automatically gets onto your platform via fast tags or some other use case?

Amit Lakhotia (Park+): So we have figured out multiple user acquisition channels, like parking is one, access control is second, fast tag is third, valet is fourth. So multiple channels. A lot of our users, I mean, we don't do direct customer acquisition saying come and download Park Plus App. But typically the way we have operated is you are using car at a specific use case, we'll acquire you from there. So like, for example, you go to, say, Select City Walk, or you go to, say, Pacific Mall in Delhi, or you go to, say, Viviana in Bombay, and you give your car to a customer, you give your car for a valet, and that is a point of time we'll acquire you from there. So acquiring users from the use case, that's something what we have been doing. And that has worked for us so far.

Utsav Somani: And in terms of numbers, like let's paint a picture about the scale of Park Plus. You've said one in two, one in three cars there. But how many times do they book the parking feature on your app? How many insurance policies have you sold? We'll use March 2026 maybe as the last month, which is fully complete. So any numbers that will help us paint the picture of the scale of Park Plus?

Amit Lakhotia (Park+): So put it this way, say roughly about 4-5% of total car owners based in India would have transacted with us last year. If you come to, like I said, 40% of total car owners in India would already have registered their vehicles at Park Plus. The boom barrier that I talked about, like that goes up and down some 2 crore times a day, 20 million times a day. There would hardly be any car in India, which will be not going through our access control system at least once a month.

Amit Lakhotia (Park+): So idea has been like go deeper, like for example, as I said, we are the biggest access control player. We are the biggest value player in the country. We are the biggest Fastag player in the country. I think roughly every fourth car in India would have Park Plus Fastag.

Dhruv Sharma: Fastag must have been a big inflection point for the company. And then even RTO data opening up programmatically. Like what are some similar MORTH initiatives that you that we don't even know about that you're excited about at Park Plus?

Amit Lakhotia (Park+): No, I think there are amazing tailwinds when it comes from more than the government initiatives. Like if you look at the last three, four years, the Fastag being made mandatory have cut time at tolls. Like the highways are getting better and better. So which means every weekend people are happy to drive. Like then things like chalans etc. Like earlier, you'll have to go to every state portal to figure out your chalans. Now a lot more centralization is happening. So government is putting a lot like insurance, government initiated pay as you go, which means now you can create a differentiated insurance policy. Not everybody should see the same insurance price, etc. So government is working a lot in terms of creating the right infra and it is up to us how do we use that infra to deliver a better consumer experience and get more and more consumers to use Park Plus.

Utsav Somani: And in terms of what does the future hold? Like, I mean, in terms of car ownership, are we looking at this super fleet that Tesla is doing, autonomous driving, etc. Where do you think like India in the next five, seven years, maybe we might see some innovation on the streets?

Amit Lakhotia (Park+): So I think massive innovation should happen. I mean, we haven't gone anywhere, to be very honest. I mean, if you look at the last 10 years, the biggest innovation has been fast tech. I mean, seamless toll travel has been the biggest innovation. But like gradually, like for example, things like autonomous cars, etc. should be happening in India. I mean, if they are happening in the US, there is no reason why they will not be happening in India. Similarly, things like you can't be like, things like I mean, we can't, our urban cities are not equipped for parkings, etc. How do you utilize democratically utilize all the available space? I'm taking more examples. Your society parking is free on the weekdays. Your office parking is free on the weekends. Your mall parking is free on the weekdays and busy on the weekend. How do you cross utilize? Like if you take the example of most cities in India, there is a mall, there is an office, there is a corporate building all closed back. Is there a way where you make sure that every car owner is able to see where to go and park? I don't want to park the car, but help me make my life easier in terms of where to go and park. Similarly, things like like roughly about two and a half, three lakh people die in road accidents every year. Like is it possible if vegetables and fruits and your toothbrush and grocery can reach you in 10 minutes? Why can't ambulances reach in 10 minutes? Like why should I be going to petrol pump to make sure every time for filling my petrol? Is there somebody who can come at my home before every trip of mine to just to make sure that my air pressure, coolant, gas, etc, everything is taken care of. Like consumer is going to demand more and more. He's getting exposed to more and more things outside. He's going to demand more and more. In fact, what is very interesting is now no TV ad talks about mileages. 15 years back, every Maruti ad used to be about either the distribution or mileage. Dad's petrol doesn't run out. Nobody today talks about what mileage is coming. Because people are saying, as somebody rightly said one time, it's like a computer on wheels. So how do you make the driving experience more and more seamless? How do you make driving more pleasurable? And how do you make sure that the tech which the consumer is comfortable on the phone is the same tech should be of a similar level of experience on the car as well? How is it integrating with the outside world? Car is no more about just about the horsepower. It is about the driving experience. Can you continue to improve it? Yes, like that is the reason if you look at people like Mahindra, etc, they have been getting market share like crazy. Because they are delivering what consumer wants. So as more and more car owners realize this, things will improve.

Utsav Somani: And in terms of road regulations right now, on a scale of 1 to 10, 10 being the best in terms of global standards and one being the least friendly or smart, where are we on the scale?

Amit Lakhotia (Park+): I think it might not be right to compare us on the global standards for a simple reason that we are still not a first world country. Expecting ourselves to be at a regulation level, at a first world level when we ourselves are still a developing country might not be correct. I think the right way to look at it is are we continuously improving? Are we continuously making that kind of effort to make sure things are getting better every year or not? Like now that needs to be done. A lot of work is actually happening, but can it be made faster? Can we do more? Like things around, say, for example, pollution on the road, for example, accidents on the road, can we do more things around it? I think we are in a position to do that with everybody getting a phone, cars themselves being connected, everybody understanding how things should work, logistics getting better. Like a lot of things should happen now. The basic environment is fairly connected.

Dhruv Sharma: How can private car ownership and then, you know, improvement in public transport infrastructure happen side by side over the next 10, 20, 30 years? Because both are needed. Both are going to happen.

Amit Lakhotia (Park+): Both are needed, actually. And this is happening city by city. Like if you look at now, Delhi has an amazing metro network. Like last time I read, like some three, four million people are traveling with this network every day. If you look at Mumbai, the new metro, the coastal roads and everything, like they are getting built at a very, very strong pace. But this is still happening at a city level. Is it happening at a pan-India level? Probably no. Some states are more progressive. They are moving faster. Some states are not that progressive or may not have their own constraint that they have not been able to move that fast on that. We'll have to do both. There is just no choice. I mean, less than 4% of Indians own cars. And still we feel our roads are congested. Now imagine now in China, 16% people own cars. And in US, 80-85% people own cars. Now if we start reaching to somewhere closer to even China's number, what would be our state of roads and our state of commute? Like already, I mean, if you look at most data points.

Amit Lakhotia (Park+): If that's the problem, then we'll have to improve it. I mean, unless we don't improve it, then there will be a problem. And the pace at which it needs to improve has to grow. I mean, look at people's expectations.

Utsav Somani: And cities are becoming crowded. Like I think on the roads, I think the traffic problem over the last 4-5 years has gone up significantly. And I think people are buying more cars. I think it's one car per person kind of model. I think which the cities, especially metro cities are following as incomes are rising and people are trying to do different jobs.

Amit Lakhotia (Park+): But it is not... See, if you look at like, for example, 5 years, 7 years back, I used to read a lot of reports which said with carpooling or with the cab rides, etc, do you require car, etc. But today, a customer doesn't want to go into a bad smelling cab. The customer doesn't want to go in a cab, which he has to literally beg the driver to switch on the AC. He doesn't want to go to a cab where he's requesting, Bhaiya, please aajao. Bhaiya, please aajao. Like, as a customer, I have a car. Why should I be begging with someone else to give me a basic commute option? So I think on the other side, that thing will also improve. And today's consumer, he doesn't want to depend on anybody else. He wants a better customer experience. He wants to control on his life. So that is the reason the public transport needs to improve. In fact, every form of mobility, whether it is a bike sharing, whether it is a ride sharing, whether it is a public transport, which is a metro, et cetera, whether it is a bus, et cetera, or whether it is the private vehicle itself. Like, every will have to improve. Otherwise, it is very hard now.

Utsav Somani: So the profitability that you just hit in Q1, I hope that continues. I'm guessing that's your hope internally as well. What is one thing, apart from the existing verticals that you're excited about for the next two years, for the growth of R-Plus?

Amit Lakhotia (Park+): So I think we have been able to lay out the basic infra. Basic plumbing has been done. We've been able to get enough car owners on the platform. We've been able to also get people to understand ParkPlus as a brand actually without spending any money. Most car owners already know about ParkPlus. They use us for one of the more use cases. So the idea is now, how do you help them migrate to more than one use case? So somebody who is using us for FastTrack should also be using us for Chalan, should also be using us for lending, should also be using us for something else. They should also be using us for discovering which is the new car to buy, etc. So as we complete our car ownership cycle, which would mean multiple things around car. So people who are using us for one thing, how do we get them to use us for more than one thing? That is like the biggest challenge for us for the next couple of years.

Utsav Somani: And you've been a guiding light to some young founders as well. I believe you've invested in GoQuake, Bharatpe, Dalchini and many other exciting companies as well. How do you, what are the top two pieces of advice that you give to them?

Amit Lakhotia (Park+): I think the first piece is fairly clear about the customer obsession. Like the customer should love your product. I think that is the first part that, and that the customer should love your product. And the second part is, see ups and downs would continue to happen. Like we raised capital. Everybody was very excited. We raised 11 million when we started. That was a fairly large angel round at that point of time. Two months down the line, COVID happened. Nobody needed cars. For next two years, like we were like, are you kidding? Like, what are we doing? Nobody wants cars. And now everything is backlogged. As you said, the traffic on the roads have gone up. More and more people are buying cars, etc. So it is just about being relentless as a founder. Unfortunately, you have signed up for this, or fortunately or unfortunately, you have signed up for this. So then there will be times when things go your way. There will be times when things don't go your way. And so you'll have to just keep pounding, you don't have a choice. Just keep doing it. And keep making sure that whichever customers you sign up, they should talk good about you. Park Plus today has like a million plus reviews on the App Store. We are 4.6 on Android. We are 4.7 on iOS. And this is despite the fact that we are fairly operational in nature, hardware, manpower, people and everything. Just keep looking at everything. Just make sure that the experience that you deliver has your name written on it. So just keep delivering that. So if you keep doing that, then obviously there are enough people who will say, yaar kuch toh kaam theek kar rahe hain, sahi lag rahe hain. And that's where you keep going.

Utsav Somani: Amazing, Amit. Thank you so much for coming on the show. Wishing you the very, very best. Thank you. Thank you. All right, listeners. That's it from us today. Dhruv and I will see you on Wednesday at four o'clock. Have a good one. Bye-bye.