What made us invest in Purple Tutor?

Introduction

We have all heard about the importance of 'learning from first principles'. But what about teaching from first principles ? Why arent we doing that ? Almost 90% of college graduates are not 'job-ready' according to employers. While it maybe easy to blame colleges for this, but that wouldnt be fair. Its a grassroots problem, which needs to be tackled in the formative years of a child's education. Oh, and thats not just an India-centric problem- its a global one.

Enter, Purple Tutor- an AI assisted Online Live Tutoring platform to develop Computational thinking in children (age 6+ years) through new age courses such as coding/app development/game design

What does Purple Tutor do?

Purple Tutor's offering goes beyond just coding, with core focus being on sharpening computational thinking. Their delivery model packs live tutoring, AI assisted tutoring/ testing in a highly personalised and targeted structure. Icing the cake, is their AI assisted live tutoring can be adopted to 1:1 and 1:many classroom setups

A unique aspect is that 95%+ of teachers are females and 50%+ of teachers are from Tier 2/Tier 3 cities. With academic backgrounds in Computer Science, there are women that are currently not working due to locational/family responsibilities. PurpleTutor becomes a unique platform for them to augment household income from the comfort of their homes.

As to the problem they solve, I'd rather have Gaurav himself lay that out in this short clip-

Why we like Purple Tutor

1. Strong Founding Team: We found a solid team in Gaurav, Yatish prior and Rajat, with complementary skill sets and a great mix of pedigreed and diverse backgrounds. All 3 founders came with significant startup experience, but also had mutually exclusive value additions to the business - Gaurav with growing P&Ls and leading teams as a banker, Yatish with spearheading tech and analytics and Rajat with gameplay.
2. Combination of High Growth+ Capital Efficiency: The company has recorded 25% M-o-M growth over the last 12 months, prior to our investment - 14x in the last 12 months. They reached a US$ 2 million ARR, with USD 300k capital raised
3. Product Market Fit, for Global Audiences : With over 80% of their revenue comes from overseas students, course renewals at a similar rate and less than 0.5% refunds rate, the road towards product market fit is all but apparent

?? The Disruptors Capital Score

We use a proprietary transparent algorithm to score all our investments. It contains our investment case, with a breakdown of scoring along 4 main aspects-

?? The Management (Team) Factor -

Score :?47/ 50

?? The Opportunity Factor -

Score : 26.5/ 30

??The Exit (Prospects)Factor -

Score : 7.5/ 10

?? The Deal (Terms) Factor -

Score : 9/ 10

?? Final Score: 90/100

In conclusion, it was our conviction in both the management and their strategy of personalised learning to solve the problem, that drove our investment decision.

We also liked that Purple Tutor built their competitive advantage by expanding their serviceable market with paid users from every continent other than Antarctica. The difference in adoption rates by geographies, positions them strongly to proactively strategise moves based on idiosyncrasies of the respective market - and thats a powerful tool to have at your disposable. Not to mention, we tend to like businesses with high operating leverage, as each sales contributes to accentuating long term value (LTV) once base costs (like teachers) have been incurred. Combining that with a global audience, that repeatedly demands their product, we knew we were betting on the right horse (or jockeys ;)

To hear more about their story, checkout our podcast with Gaurav Perti (Founder, CEO @ Purple Tutor)