Inside Habitro Labs’ aggregation economics to become the Ola of home automation

Inside Habitro Labs’ aggregation economics to become the Ola of home automation
Mrinal Kashyap, co-founder and chief executive of Habitro Labs
13 May, 2019

You would think that a home automation company would bestow its highest honour on manufacturing, by cranking out wise-guy IoT wonders off assembly lines destined to rig your house. But no.  

Not with a home automation firm co-founded by a person who was working the aggregator model at ride-hailing company Ola till late last year. That’s right, Mrinal Kashyap’s Habitro Labs bestows its highest honour on aggregation, inspired by homegrown Ola’s successful playbook for the ride-hailing market.

In other words, what the home-automation company does is: Aggregate products designed and made or supplied by other people and firms, package them on its own and harvest revenue by selling under its brand name. This way, the end-customer interfaces with the aggregator, which in turn taps a supplier for the product requested, and the supplier could be one of the many small dealers and shops living on Habitro’s marketplace, based out of Mumbai or Pune.

With this open-source aggregation platform for all types of dealers, suppliers, and manufacturers of home-automation products, Mumbai-based Habitro aims to be the Ola for house IoT.

But these are very early days. Right now, Kashyap believes that the home automation market is very unorganised and fragmented, like India’s cab market before the advent of Uber and Ola.

“Home automation is grooming in India but most of the products are actually manufactured in China and not in the local market,” he says. And as an aggregator, Habitro has the daunting task of making sure that the home-rigging products on its marketplace live up to the customers’ expectations.

“Domestic products are of inferior quality and mostly white-labelled Chinese products, and international companies are costly yet offer no or very bad after-sales service since they do not have much presence in India. So, the end-customer has to rely on small shops to get their home automated as well as for the after-sales service, even after spending few lakhs, an amount for which in India you'll get a four-wheeler with much better after-sales service,” says Kashyap.

Habitro, which stated operations in December, offers voice and gesture-based control features with automated curtains, remote door locks, energy-saving motion daylight sensor, smoke and gas-leak sensor, door intrusion and glass-break sensor, among others. It also sells video door phones, 360-degree cameras, voice-based television control and mood-based light and sound.

The company was launched late last year after Kashyap decided to quit his cushy job at ride-hailing firm Ola in order to rig homes with smart devices. For this, he teamed up with two undisclosed colleagues to start up for a second time.

At Ola, Kashyap was heading the firm’s leasing business in Mumbai, where he used to supervise the daily supply of vehicles to large enterprises. Before Ola, he headed sales and operations for Meru Cabs. Prior to this, he had founded a logistics startup called MyShipMate in 2013, which was eventually acquired by Delhivery-backed (now defunct) in 2015.

“I always wanted to do something of my own, because of which I started up. I was happy with what I was doing in Ola and purposely was not looking at other things until I came across an idea or a need to automate my own home. I tried automating a few of my home appliances, did research, bought Amazon Alexa and then realised a need to get this idea into motion,” says Kashyap, co-founder and chief executive of Habitro.

The firm majorly sells through builders, architects, and interior designers. It has already worked with three builders in Delhi and Mumbai after incorporation, and is in discussions with 10 more.

The company also plans to enter manufacturing in order to reduce prices as well as increase the product line.

“Currently, we've a network of small dealerships and shops, which is spread in all the Tier-I cities of India. We're trying to create our own brand, something like the Amazon platform. You could raise a query and Habitro will do the initial discussions with the client to understand the requirement and once the deal is closed the installation is taken care of by our network of dealerships,” says Kashyap.

Habitro says it also provides the customer with after-sales service through its network of dealerships.

The bootstrapped Mumbai-based firm claims to have generated revenues of up to Rs 1 crore so far, most of it driven by enterprise customers. 

The company, at the moment, is focusing on Mumbai and Pune and has plans to expand to other Tier-I and Tier-II cities. It is also in the process of raising up to $2 million and has already started discussions with a couple of potential investors as it looks to grow the business and deepen its technology.

Home automation in India today consists of four functional segments: Lighting, security, audio/video and HVAC (heating, ventilation and air conditioning). Lighting is the largest component of the residential market while security is the biggest in the commercial market.

Yet home automation hasn’t got much traction in India because of a lack of awareness and high pricing. However, Kashyap believes that businesses do have many use-cases for this technology, as reflected in the firm’s revenues. As for residential homes, he says, “Probably we could do something about making houses safer using a combination of sensors like smoke detector and intrusion-based sensors with artificial intelligence.”