“Kots is actually a noun, and it is what the student accommodation I lived in France was called. I wanted to replicate the experience I had there,” said CEO and co-founder Vijeth Reddy.
Vijeth Reddy and Sangeetha Holiyachi took notice of the visible lack of insights into the renting market of new age tenants. The duo found that the younger pool of tenants were particular about their spaces and preferred greenery and light over a big kitchen, and balcony and free space over lavish furniture- this the local landlords in the market did not understand. Targeting a very niche customer pool- Reddy and Holiyachi brought to life the idea of Kots.
Kots is a digital consumer brand offering urban rental housing for the younger population of the country, using the Built To Rent model. It offers studio flats, 1BHK and 2BHK rental units in gated apartments on a 11-month residential lease. The company specially caters to the career-oriented home seekers between the ages of 24 to 36. It additionally offers services like Water can subscription, Housekeeping, Vehicles wash, food for its tenants.
The company seeks a 2-month deposit which is considerably competitive as compared to the existing service apartment market which demands a 6–10-month deposit. Explaining this pricing Reddy said, “The reason why people charge a heavy deposit is because it’s coming from a tenant. When an individual landlord charges that money, it is justified because he has to handle any cost related issue. We use a data layer to try and mitigate the risks with the type of tenants we take.”
The company works with people who are eligible to pay a certain amount in advance by signing the agreement before entering into the property in turn reducing the risk. Apart from this he also explained how Kots partnership with Croma helps in mitigating the risk. “We have built all furniture in a modular way so that anything can be refurbished and restored at a fraction of a cost.”
Operational since February 2020, the company currently has 2.5 lakh square feet of residential spaces in East Bangalore with $1.5M ARR and 100% occupancy. Currently available in three pin codes within Bangalore, Kots has a monthly recurring revenue of $200K. The bootstrapped company sees around 70% of contract renewals after a 11-month contract period with tenants.
The company has its equity with The Brigade group, a Bangalore-based real estate and property development company.
With the ideology of expanding the business in a slow and steady method, the company looks out for cities that have similar areas as those of the properties in Bangalore. Kots has signed projects which are expected to propel its growth rate 2X year-on-year till 2025.
It has plans of launching in North Bangalore starting next quarter covering around 10-12 pin codes in the city and expanding to Hyderabad by 2024.
