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Millions In Mexico Turn To Early Warning App After Massive Earthquakes

Millions In Mexico Turn To Early Warning App After Massive Earthquakes
An app which is one of Mexico’s most downloaded apps, is an early warning start-up called SkyAlert has doubled its users to 5.8 million since two massive earthquakes hit the country in September, claiming more than 460 lives.
The co-founder and director Alvaro Velasco of the app SkyAlert said that that the app has also found a market selling alarms to small businesses in the capital. And other parts of Latin America - Colombia, Peru and Chile, where there is a lack of official alerting system despite frequent quakes in those countries is the market where the company is looking to expand to.
Talks about raising 100 million pesos ($5.35 million) in capitalization in 2018 is being held by the company with investors from Mexico and elsewhere by Velasco along with SkyAlert co-founder Alejandro Cantú, he said.
Attracting interest from two Mexico-based private equity funds, the interest of existing investors including U.S.-based American Messaging has been heightened by the surge in users after the most recent deadly quake in Mexico City, he said.
There were no comments available from American Messaging.
With the aim of injecting around 20 million pesos (1.05 million dollars) into SkyAlert, the company was in talks with those funds and existing investors, Velasco said.
Still, partly because recent regulation in Mexico City has limited SkyAlert’s ability to access funds through public financing, finding a sustainable business model for the quake monitoring app has been a challenge.
Quake apps have struggled to get adequate financing because of the lack of a clear path to profits, said Shomit Ghose at Onset Ventures, a U.S. private equity company with experience in software start-ups.
“If the business model is B2B where the earthquake early-warning is sent to companies, or railways, or hospitals, or high-buildings then perhaps a strong B2B case can be made for start-up investment,” Ghose said.
Companies seeking funding to develop earthquake alert apps in the United States have also suffered and SkyAlert’s predicament echoes such struggles. Without government support, seismic activity is hard to monetize.
After an earthquake in 1985 killed thousands in Mexico, the country’s Mexico’s official alerting system run by government-funded non profit CIRES is the competition for SkyAlert.
CIRES runs a network of sirens positioned around Mexico City that warn of a coming quake and is one of the world’s few widely deployed seismic alarms. A mobile app is the main source of warning people for SkyAlert.
But SkyAlert’s public financing has been limited as a 2016 regulatory reform requires public buildings in Mexico City to purchase alarm systems from CIRES even though both sell quake warning systems.
Velasco said that SkyAlert decided to deploy its own detection sensors to increase coverage with greater accuracy in 2015 even though initially it replicated CIRES’ alerts.
“After a few false alerts from CIRES that affected SkyAlert’s credibility, we decided to invest in our own technology,” he said.
Ways to monetize its free app is also being looked into by SkyAlert.
Allowing users to personalize alerts, it sells a “premium” version for $4 a year currently. The company said only around 4 percent of users pay for it even though Mexico has an average per capita income of $8,200,
those fees and income from selling to businesses are the two ways for SkyAlert’s revenue and is split fairly evenly between them, Velasco said.

Christopher J. Mitchell

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