Purple Squirrel, a Mumbai-based ed-tech company has shut down its operations after it could not hit the targeted revenue or curb its cash burn.
The startup was incubated in September 2013 by IIT Bombay. The founders Aditya Gandhi and Sahiba Dhandhania.
Aditya had a B.Tech and an M.Tech degree from IIT Bombay under his belt when he moved to Europe and worked in the finance sector with Optiver Amsterdam as a derivatives and equities options trader.
“Being in Europe and understanding the student interaction and hiring practices of companies was the starting point for me and that’s how the idea of Purple Squirrel Eduventures Pvt. Ltd took form,” said Aditya.
Almost at the same time, Sahiba Dhandhania, a gold Medallist from Christ University, Bangalore, was also working in the finance sector.
The startup focused on taking undergraduate students on industrial visits across the country .A typical industrial visit used to be a study tour that was crafted entirely based on the student’s curriculum. Relevant companies, startups, enterprises and speakers were contacted and an itinerary was also set such that it spreads comfortably across the next few days.
Soon, it received Rs 12 crore investment from Matrix but had to achieve a target of Rs 30 crore by 2015-16.Prior to this, it had raised an undisclosed amount of funding from Mumbai-based venture capital investor India Quotient.
Failing to achieve the target, the company expanded and forayed into travel space by taking students to tourist destinations. This inevitably was not easy with the already established firms existing in this space. And as the burn rate increased, the company failed to raise Series B.
“The long-term plan was to get students placed in these companies and get a commision for headhunting. But that was after it hit a critical mass,” said a former employee.
With that idea, Gandhi sent a team of sales executives with brochures to colleges. The executives tried to sell the idea to the professors and the student body. Most times, they were turned away.
“Students didn’t want to learn on these trips. They didn’t want to go to Hyderabad or Chennai. They wanted Manali and Goa,” said the ex-employee. So, every time the professor agreed, the students nixed it. But the company managed to make Rs 3 crore in the March quarter of 2015. “The margins were really good. Almost 20 per cent,” said the ex-employee. The company would find “reasonable accommodation” near the client and keep the costs low.
The founders claimed to have already delivered 5000+ unique experiences in experiential learning, associating with 350+ campuses and corporates, across 12+ destinations within 1 year of its operations. Also, the founders confirmed the connection with 70 colleges from 10 cities, 8,000 students and more than 300 partner companies, as of April 2015.
Matrix had promised another funding in September if the startup had hit the INR 15 Crore. revenue mark. The company had failed to achieve the promised target, which forced them to look for new investors.
In January it raised a bridge round but that did not solve the problem, as the company had Rs 3 Crore left and its burn rate was Rs 1.2 Crore every month. Soon, the employees were asked to leave or just quit and as no sales happened with the ongoing exams, the company has finally shut down.