Internet Startup Founded by Ex-Kotak Executives Targets Indian Graduates
Sandeep Reddy and Vikhyat Srivastava quit their jobs at Kotak Mahindra Group last month to sell homes, cars and electronics to graduates of India’s top colleges, who typically earn 34 times more than the nation’s per capita income.
Reddy, 28, a former property analyst at Kotak Securities Ltd., and 27-year-old Srivastava, who helped the group’s real estate private equity fund make investments, say they’ve signed up 8,000 members at 27 college alumni networking sites. They set up their first website while studying at the Indian Institute of Management in Kozhikode, in the south Indian state of Kerala.
“The first need of an MBA student is a laptop; every two years he would look for a new job, every five years he would need a new car, every 7 or 8 years he would need a new house, and every year he will fly abroad to vacations,” Srivastava said in an interview. “We think we can club all these needs.”
Average salaries for jobs in India offered to the graduating batch of Indian Institute of Management in Ahmedabad, the country’s premier business school, rose 22 percent to an annual pay of 1.49 million rupees ($31,838), according to a statement from the business school in March. Morgan Stanley, Goldman Sachs Group Inc., UBS AG and Citigroup Inc. were among the major recruiters, it said.
India’s per capita income grew by 10.5 percent to 44,345 rupees in the year ended March, according to government data.
Reddy and Srivastava hope to capitalize on rising salaries and demand for luxury apartments in India as the ranks of the affluent in the third-fastest growing major economy swell. The South Asian nation has 84,000 millionaires, according to the 2009 World Wealth Report by Cap Gemini SA and Merrill Lynch Wealth Management. The number of millionaires in India and China is expected to triple in the decade to 2018, the report shows.
The two partners intend to set up 50 student networking sites by next month, Reddy said. The employees-turned- entrepreneurs aim to leverage this database to offer consumers discounts on homes, phones, cars and motorbikes by securing lower rates from developers and consumer companies, he said.
Their website, GrOffr, derived from Group Offer, will source deals with discounts for buyers, said Reddy. Innovektor Consultancy Services Pvt., which runs the site, has completed deals worth 640 million rupees, he said.
The site, which gets 1,000 hits a day, offers deals in five cities including Mumbai and New Delhi and expects to increase its reach to 10 cities in the next six months, Srivastava said.
The entrepreneurs plan to expand their services from selling property to the loans to finance it, and even provide the furniture needed, he said.
The company, which has a staff of eight, expects to employ 20 people by the year ending March 2011 and have as many as 40 employees by 2012, said Reddy. It posted a profit of 1.8 million rupees in the year ended March 31 on sales of 3.1 million rupees, said Srivastava. Sales may grow to 10 million rupees this year and to 50 million rupees in the year ended March 2012, he said.