A startup that ‘could be a hero or zero in 2 years’ will not get any money on Shark Tank India S2

• Kolkata based GunjanApps Studios develops educational games for children aged 1.5-12 years.
  
• In FY22, it achieved revenue of ₹24 crore and net profit of ₹15 crore.
  
• The founders requested an investment of ₹2.5 crore for 1% equity.
  
• None of the judges made an offer because a few felt that the product was not innovative but rather “addictive” in nature.

Out of the 21 startups pitched on Shark Tank India Season 2 so far, 15 startups have received funding from the sharks. Tech startup GunjanApps Studios is not one of them.

Started in 2016 by husband and wife team Sourav and Gunjan Gupta, Kolkata-based GunjanApps Studios develops educational games for children between 1.5 and 12 years old. The startup claims to have developed more than 40 mobile apps that have a combined 200 million downloads. The best performing app is a math learning app, which has 60 million downloads.

“We are on a mission to change the way children experience technology, by creating a safe space for them. We create quality content for kids to play and learn. We bring families together during meaningful screen time,” the company’s website said.

The founders claimed that the average screen time of children was 9 minutes before Covid, but during Covid it rose to 60 minutes due to the heavy reliance on Zoom classes. According to the founders, the average screen time of children is currently 45 minutes.

The founders asked for an investment of ₹2.5 crore for 1% equity which valued the company at ₹250 crore. The startup has three revenue streams, advertising, subscriptions, and in-app purchases, which contribute 96%, 3%, and 1% to its total revenue, respectively. In the future, however, the founders aim to increase subscription revenue.

In FY22, the company had a revenue of ₹24 crore with a net profit of ₹15 crore. And yet the startup did not find any buyers. Because the sharks in particular did not believe in the product.

More screen time is a tragedy

The founders said the idea to develop the app came from their own experience. Originally from India, the couple were living in the US when they watched their son, then 1 year old, learn numbers by playing with a PoC (proof of concept) that Gunjan was working on at the time.

Then the founders had their “eureka moment” – an app that allows children to learn without parental help. According to Gunjan, she couldn’t find a free app that offered a similar learning experience.

She shared on the show, “When I searched for such learning apps for my son, I found that there were no such apps in the market. The ones that were available had an extremely expensive subscription.”

Consequently, Sourav resigned from IBM and the pair returned to India to develop GunjanApps extensively. Sourav is an engineer who worked for 12 years (at L&T Infotech and later at IBM) before starting GunjanApps. Gunjan is a certified Android programmer, who had 3 years of experience as a web and mobile app developer before starting GunjanApps.

Vineeta Singh, co-founder of Sugar Cosmetics, was the first to share her concerns about the product and back away, claiming that the apps were actually highly “addictive” for kids and didn’t offer much learning.

Namita Thapar, executive director at Emcure Pharmaceuticals, took a similar view. She believed that an increase in children’s screen time is a tragedy, and that one should try to reverse – not accept – this trend.

“The numbers you shared about increasing screen time – this is a tragedy. Instead of accepting it, we should turn it around and go back to old-fashioned ways. Because I don’t believe in it fundamentally, I’m out,” Thapar said.

On the other hand, sharks Aman Gupta, co-founder of boAt, and Anupam Mittal, founder of Shaadi.com, agreed with the founders to some extent. Both shared that high screen time for kids was a reality in today’s times.

However, Mittal stopped investing because he didn’t think the product was as revolutionary as the founders claimed. He said that given the restrictions on advertising to children, the founders should expand their subscriptions – something the founders agreed with. And in a subscription market, they would face fierce competition from established industry giants such as ABC Mouse and Kiddopia. Mittal said he didn’t think the startup had the capacity to fight such competition.

Shark Peyush BansalLenskart’s co-founder, who initially seemed interested, backed out — not because he didn’t believe in the product, but because he didn’t believe in the founders. According to Bansal, the founders needed intensive coaching in building a culture in the organization.

“Your company is in a phase where it will be a hero or zero for the next two years,” Bansal added. Gupta, on the other hand, believed that while Sourav and Gunjan were passionate founders, they were not paranoid about the competition – a quality he looked for in entrepreneurs.

A glimmer of hope

Dejected by the rejection of all the sharks, Gunjan shared that she believed it would have been easier for the company to grow if they got a deal on the show. That’s when Mittal added that he’d like to talk about ways to improve the app and the business as he’d been working on similar products. He also advised them not to shy away from challenges, which he said were an integral part of an entrepreneur’s journey.

“It will never be easy – the path is hard. Entrepreneurship is very difficult. (But) if you must determine the path before you, you will. But because I built this company, I’m happy to give you advice and input,” said Mittal.

Bansal also added that the duo should be proud of the fact that at a time when most of the tech startups and internet companies, even those generating revenue amounting to ₹1,000 crore, are struggling to make a profit, it duo had created a profitable business. .

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