Unboxing the next opportunity

Lightbox Ventures funded Flinto Learning Solutions, a company that creates play-based activities for kids, plans to enter the Southeast Asian market a year after launching their second product, Flintoclass, aimed at preschools.

Arunprasad Durairaj, Co-Founder & CEO, Flinto

Flintobox , a subscription service that delivers play-based activity boxes, was launched in 2013 by Arunprasad Durairaj, Shreenidhi Srirangam and Vijaybabu Gandhi,who found that early education was not well established in India. Hoping to make their children learn through play-based activities, they launched an activity box. 

The three-member founding team has experience working with each other previously. Srirangam Gandhi and  Durairaj had previously worked with TCS and together founded ride-sharing platform Zinghoppr.

Having known each other for years, a casual conversation over how to keep kids occupied and away from the television led them to experiment on designing activity kits. They realised that to successfully divert kids away from gadgets, they had to create something visually engaging and mentally stimulating.

The idea conception

They came up with a box which contains materials and books for an activity which comes with a set of instructions called Flintobox, which has been in the market for four years now. 

“We wanted to make sure we designed something that was purposeless play. In the sense,early learning has to be fun and stress-free,” says Durairaj who previously led Samsung’s M&A team and was part of the healthcare VC industry looking at medical IT.

Initially their product was addressed at children in the age group of 3 years to 7 years. Overtime, as the product team grew from three-members to 50, which included child behavioural experts as well, they changed the age range from 2 years to 12 years, after considerable research. Today the company has 220 employees.

Upon subscription, every month a new theme is introduced such as Jungle Adventure and In the marketfor the younger kids and more advanced Fantastic Force and Incredible Optics for the older ones. The concept of themes was brought in to ensure fresh activities every month and the company displays the theme for the upcoming four months in advance.

Talking about their research based approach, Durairaj says, “The team has identified 12 key areas based on their extensive research on the skills that a child develops in the formative years.” Explaining further he says, “For the Magical rainforesttheme, the child develops spatial and logical reasoning, motor skills and problem solving abilities.” Other key areas include fine motor skills, gross motor skills, cognitive capabilities, problem solving abilities,  to name a few.


Market acceptance was not there, first couple of years was difficult, it took nearly 24 months or even more to get the snowballing effect of recommendations to kick in


The initial challenge

“First couple of years were difficult due to poor market acceptance,” says the co-founder. For the Flintobox product, it took the team nearly 24 months or even more to get the snowballing effect of recommendations to kick in.

With Flintobox, the company didn’t consider reaching students through schools as it was not a structured- play approach. Instead, they went the B2C route.

Once the early adopters shared reviews things took a positive turn and more parents took notice. So far, they have registered 5 lakh subscriptions and have a renewal rate of 65 percent for Flintobox. Their feedback management system receives suggestions from around a thousand parents each month. Word-of-mouthaccounted for more than 60 percent of their sales last year.

“We considered going into the retail space initially but shelved the idea after realising that we would bleed too much cash rapidly,” recalls Durairaj. At the early stage, they felt it wasn’t the right move and set up their own online store.

Entry into B2B segment

Looking at the reception of their first product, the team decided to come up with an offering that would help unbranded preschools compete with the bigger ones.

With this goal in mind, they launched their second product, called Flintoclass in 2017. The offering marked the company’s entry into B2B channel- working with preschools. Flintoclass is now present in around 500 playschoolsand the price discovery is still in process. The company has done a pilot in a few Southeast Asian countries.

Flintoclass teams up with schools and provides curriculum, lesson plans and online teachers training along with display materials for classes such as posters and a parent communication app.

Unlike Flintobox, with Flintoclass, the referral system isn’t present as it is an enterprise product. “Schools are businesses and compete with each other, school management doesn’t recommend a product for other schools to implement,” Durairaj notes.

Last year, schools had expressed interest in the product but didn’t buy immediately; they were waiting to observe how the product was received. “It was only a matter of time, to see the success at other places to implement it,” he adds.

The funding journey

Flintobox has raised two rounds of angel funding followed by a Series A investment by Lightbox Ventures. The founders had been in touch with the VC firm for a couple of years before fundraising with them. “Most members of Lightbox, be it associate or partner, had been using Flintobox for 14 or even 20 months prior to the investment,” says Durairaj.

Lightbox Partner Prashant Mehta echoes the thought. “It was very organic. What we liked with the Flinto team was that they would take our suggestions, work on it and come back with an update,” he says on their decision to invest, “so after a while, I remember calling them to say it was the right time for us come onboard.”

The Flinto team will be making significant investments towards collecting data.Over the next 18 months to 24 months, they will incorporate the initial feedback they receive from preschools for Flintoclass.

“They have a great set of people – for data and product development- who have stayed with them for long. This is a vital for their growth moving forward. They are only scratching the surface,” he says.

More recently, In August 2018, the company raised Rs. 6 crore rupees in debt, funded by InnoVen. It plans to infuse this investment to expand to Southeast Asian countries. “At this point our financials are strong to take in debt, so we brought in finance without the dilution aspect,” Durairaj says of keeping a balance between debt and equity after the venture turning profitable last year.

Moving forward, the team looks to take Flintoclass to the overseas market, after their recent pilot there. They have also received inbound interest from retail players which they are open to exploring for Flintobox. “Our vision is to create the most-loved and trusted brand,” he says. They hope to achieve this by slowly and gradually identifying preschools overseas.

The team is fine-tuning their training app to increase transparency and communication. They are also adapting their classroom assessment process as they look to expand to Southeast Asia. “These are some key areas we will be focussing on,” says Durairaj on a concluding note.


Snapshot: Flinto Learning Solutions

Founders: Arunprasad Durairaj, Shreenidhi Srirangam, Vijaybabu Gandhi

Year: 2013

Funding: Lightbox Ventures, Innoven

Revenue: Rs. 30 crores (end of FY18)

Profile:

Flintobox is a subscription service that delivers activity-based boxes for children in the age group 2 to 12 years. Its second product, Flintoclass, launched in 2017, provides curriculum, display posters to preschools along with online teachers’ training and a parent communication app. The offering marked the company’s entry into B2B channel- working with preschools. Flintoclass is now present in around 500 playschools and the price discovery is still in process. The company has done a pilot in a few Southeast Asian countries.


Funding advice from a fellow entrepreneur during the initial days:

Matrimony.com founder, MurugavelJanakiraman said: “When a growing company or start-up receives an offer for debt or equity financing, if the terms are decent, Take it. Don’t think about it too much. You never know when you will be in need or searching for money.”