Imdad Hussain
In a world where convenience, quality, and safety are critical, The EleFant is revolutionizing the toy and book library experience for families across India. Sourabh Jain and Shristi Padia Jain founded this innovative enterprise after a personal experience inspired them to address glaring market shortages. The EleFant, which offers over 600 goods from 70+ toy brands, is designed to meet the changing needs of children from infancy to primary school. The name “The EleFant” is a brilliant combination of “Elementary” and “Infant,” with inspiration from the beloved, intelligent elephant- a symbol of knowledge and strength.
A Spark of Inspiration: The Creation of The EleFant
The EleFant was inspired by a late-night encounter that forever altered the founders’ perspective on the world of toy libraries. One tragic night, Sourabh Jain and Shristi Padia Jain were awakened by a message from their daughter, Ahana, who had contacted a toy institution at 2 a.m. The next day, they received a disdainful response- a sharp instruction not to contact at such an hour, followed by a demand that any toy requests be made immediately. Sourabh found this approach not only cumbersome, but also indicative of a larger issue, existing toy libraries were failing to fulfill modern parents’ expectations for accessibility, quality, and customer service.
Determined to find a better approach, Sourabh and Shristi polled 1,000 parents in ten major cities. The survey highlighted three significant weaknesses in the existing market:
- Lack of Convenience: Parents found it difficult to use toy libraries when necessary.
- Compromised Quality: Many offered toys did not satisfy high requirements for safe and enriching play.
- Inadequate Home Delivery: The lack of home delivery added to the hassle.
Armed with these findings, the duo envisioned a platform that would combine the best parts of quality, safety, and convenience, all accessible via a simple smartphone app. Thus, The EleFant was formed, with a clear mission, to provide a modern toy and book library that could assist families in over 18 cities, with 68 library sites set up across the country and delivery times as short as one day.
Meet the Founders: A Blend of Experience and Vision
Sourabh Jain, a Chartered Accountant, graduated in 2010 and spent four years working in the corporate world. In 2014, he formed a business partnership with a friend, but he soon found himself sidelined as his partner took over operations. Sourabh remained undeterred, honing his talents until he joined Chai Point as Supply Chain Director in 2020. His time there helped him improve his understanding of logistics and operational efficiency, which are important qualities for his next business. By 2022, Sourabh had made the daring choice to leave his existing position and devote himself entirely to The EleFant, motivated by the belief that his personal experience and professional ability might alter a whole sector.
Shristi Padia Jain brings a complementary set of skills to the table. As a qualified Company Secretary and lawyer, she has built a reputation for precision and compliance. Currently serving as a Company Secretary and Chief Compliance Officer in her regular profession, Shristi dedicates her weekends to The EleFant. Although she holds the title of Director within the company, her role is non-executive, allowing her to balance her corporate responsibilities with her passion for transforming children’s access to quality toys and books.
Sourabh and Shristi create a dynamic team. Their contrasting backgrounds- one in finance and operations, the other in legal compliance and governance- have helped to create a business that is not only innovative, but also rigorously managed and industry-compliant.
Business model and unit economics: the numbers behind the magic
A closer look at The EleFant’s business model reveals a carefully planned approach that blends strong unit economics with a scalable operational framework.
Membership Plans & Pricing
- Ultimate Playtime Plan: A 12-month membership that includes 3 toys and unlimited exchanges, ideal for families seeking continual play and variety.
- Starter Plan: A three-month subscription includes two toys and the opportunity of up to nine exchanges.
Additional exchanges exceeding the plan’s limit will incur a delivery fee of ₹100 per exchange.
The company presently has over 2,000 subscribers for the 3-month package, demonstrating the market demand for flexible and economical playtime options.
Operational Model
The EleFant stands out by decentralizing its activities. Unlike traditional libraries, which require dedicated physical outlets, The EleFant’s libraries are established in the homes of local librarians. These community-based centers not only lower administrative expenses, but also promote a more personalized and localized client experience. Here’s how the model operates:
- Investment in libraries: Each library is built with an investment of ₹7.5 lakhs made by the librarians themselves. This investment can be split down as follows:
- Toys: ₹ 6 lakhs (80%)
- Setup Cost: ₹50,000 (6.7%)
- Franchise Fee: Rs 1 lakh (13.3%)
The gross margin for this investment is an astounding 52%, demonstrating the model’s efficiency.
Librarian Incentive
Librarians are paid a minimum of ₹25,000 per month to ensure the success of their libraries. They also receive a packing fee of ₹25 per order and referral income ranging from 8% to 12%. Librarians’ internal rate of return (IRR) is projected to be 36% over three years.
Unit Cost Breakdown
- Selling Price: ₹8,400
- GST: ₹1,250 (14.9%)
- Net Price: ₹7,150
- Additional Fees: A nominal library fee of ₹25, a packaging fee of ₹20, and a logistics charge of ₹52 contribute to a total annual cost of goods sold (COGS) of ₹3,000. This results in a gross margin of ₹4,150, or 58%.
- Customer Acquisition Cost (CAC): ₹1,100 (15.4% of cost structure)
- Salaries: Average cost of ₹2,000 per user (28%), with a monthly team salary expense totaling ₹34 lakhs
- Warehousing Costs: Minimal at ₹143 (2% of costs)
This finely tuned unit economics framework allows The EleFant to deliver quality service at competitive prices while ensuring profitability and sustainability.
Revenue, Profit, and Financial Performance
Data is the lifeblood of any modern enterprise, and The EleFant is no exception. Let’s delve into some of the key financial figures that underscore the company’s performance and growth trajectory.
Recent Sales Performance (September 2024)
Revenue Streams
- From Librarians: ₹53 lakhs
- From Users: ₹21 lakhs
- Total Revenue: Approximately ₹74 lakhs for the month
Gross Margins and Profitability
- The blended gross margin for September 2024 stands at 53%.
- Specifically for sales from users, the delivery and variable fee amounts to ₹7 lakhs (33.3%), yielding a gross margin of ₹14 lakhs (66.67%).
- The overall gross profit recorded for September 2024 is ₹41 lakhs.
Expense Breakdown for September 2024:
- Librarians’ Fixed Fee: ₹19 lakhs (46.3%)
- Salaries: ₹34 lakhs (82.9%)
- Marketing Expenditure: ₹9.5 lakhs (23.2%)
- Other Expenses: ₹30.5 lakhs (74.4%)
- EBITDA: The earnings before interest, taxes, depreciation, and amortization (EBITDA) reached ₹52 lakhs, reflecting an EBITDA margin of 126.8%- a strong indicator of operational efficiency.
Capital and Investment
- Personal Investment by Founders: ₹1.25 crores
- Total Funds Raised: ₹5.5 crores
These financial metrics not only highlight The EleFant’s robust revenue model but also underscore the strength of its unit economics. The company’s ability to generate substantial gross margins, combined with disciplined cost management, positions it for long-term success in a competitive market.
The Shark Tank India Pitch
No business journey is complete without high-stakes decision-making, and The EleFant had one such moment on the set of Shark Tank India. The creators offered their revolutionary toy and book library concept for ₹60 lakhs for 1% stock, resulting in a valuation of ₹60 crore. Despite their confidence and extensive data-backed presentation, the sharks ultimately declined the transaction, citing reservations about the company’s profitability and overall value proposition.
While the sale did not go through, the exposure from Shark Tank India was invaluable. It not only brought The EleFant into the national spotlight, but it also reaffirmed the founders’ dedication to transparency and data-driven decision making. The intense examination from seasoned investors pushed Sourabh and Shristi to fine-tune their strategy and focus on improving the company’s unit economics and operational efficiency.
Conclusion
The EleFant’s journey from personal inconvenience to pioneering business endeavor is one of innovation and perseverance. With excellent financial indicators, creative unit economics, and a clear aim to revolutionize playtime, this modern toy and book library is poised to usher in a new era of ease and quality for families throughout India. Whether it’s the painstaking selection of over 600 high-quality products, the smart deployment of library centers in 68 locations, or the data-driven increase in member numbers, every aspect of The EleFant is intended to provide unmatched value.