Bagging a job is an all-too-tough hurdle for graduates in India. And that’s an understatement for sure, given that there are more than 20,000 colleges in the country and there is always cut-throat competition even for a fresher’s post. Student placement is still a painful procedure in most of these institutions, barring the top five per cent of the engineering institutes, such as the IITs and NITs. Yet more colleges are springing up every year and more pass-outs are seeking jobs. Is there a way to connect this never-ending demand to the job opportunities across enterprises?
Harpreet Singh Grover and Vibhore Goyal, alumni of IIT-Bombay, have the answer. Their start-up CoCubes connects over 2,000 colleges to 300 companies and is growing at a fast clip. Techcircle.in brings you the story of how CoCubes went from nil to a run rate of Rs 20 crore in revenues (targeted for fiscal 2011-12) within five years, the shifts in its business model and what’s ahead for this online start-up.
CoCubes.com is an online platform that allows students to learn about enterprises and companies which are visiting their institutions for campus hiring. They can ‘follow’ companies in the same way people do it on the professional networking site LinkedIn and stay updated about news, happenings and internship opportunities at the companies of their choice. Students can also set up profiles with their resumes and share it with companies.
Moreover, they have access to videos and online tests or other assessment tools of various companies which will allow them to prepare themselves for placements and increase their employability. They can also compare test scores with other students and rate themselves. Students can participate in polls as well and view offer letters on the site.
Today, CoCubes has 300 companies on board which use its services for hiring while 15 are involved in both hiring and online engagement with students. The latter group includes corporate bigwigs like Accenture, CMC Ltd, Cognizant, Punj Lloyd Group, Capgemini and Aricent.
CoCubes has an annual fee model and charges colleges Rs 700 for every final year student. However, the service is free for corporate houses looking to increase their reach into tier II and tier III towns for potential candidates.
Essentially, the company offers a professional, online recruitment process to HR managers. “There is a lot of inefficiency when they approach colleges and speak to students. Also, recruiters are not sure how many students will actually attend the placement sessions. There is a lot of confusion and miscommunication at that level, which we seek to eliminate by automating the entire placement process for tier II and tier III colleges,” says Harpreet S. Grover, co-founder and CEO of CoCubes.com. Individual students cannot register on CoCubes, though, and this ensures that student information is authentic as it is sourced directly from colleges.
Grover summarises the website’s relevance with a comparison to online ticketing agencies who revolutionised flight ticket booking by bringing the entire process online. “What Cleartrip has done to booking tickets, we have done to campus hiring and student engagement,” he says.
Starting From Scratch
In February 2006, Harpreet Singh Grover was an analyst at a Gurgaon-based consultancy, Inductis India Pvt Ltd, when the idea of connecting colleges to companies came to his mind, following a discussion with a college placement officer. The officer told him how difficult it was to ensure that companies would come down for campus recruitment. Grover mulled a technology solution to solve this issue and discussed it with his friend Vibhore Goyal. Goyal was then working with Microsoft Research India as an assistant researcher.
In August 2007, the two quit their jobs to begin work in earnest. Goyal was the coder (currently the CTO) and he began building the platform while Grover was the marketing guy, talking to colleges and corporate houses. They pooled in Rs one lakh each and worked from home for six months.
The first round of funding came in from Amanjeet Saluja who was leading the consulting practice at Inductis. Saluja acquired two per cent equity stake in the start-up for an angel funding of Rs 4 lakh. Once the cash was in place, CoCubes hired an intern in operations, a couple of coders and a salesperson to interact with colleges. Soon, the growing CoCubes team shifted to an office inside the incubation centre of a college, which they occupied in exchange for 0.5 per cent equity.
In February 2008, CoCubes managed to sign an engineering college located at Fatehgarh Sahib. And its first corporate client was the Gurgaon-based knowledge process outsourcing firm eValueServe for an annual fee of Rs 2.2 lakh. Private college IILM Institute for Higher Education came on board next, paying Rs 40,000 per annum.
Just like any other start-up, there were rough rides along the journey. In May 2008, CoCubes received an offer for Rs 2 crore in funding from an angel investor, but the individual changed his mind about the investment after the term sheet was signed. “It was the first time we were raising this kind of capital and both of us were ill-advised. There was a difference of opinion in one of the clauses. The investor thought we were trying to control too much and broke it off,” explains Grover.
But that was not all. Since the entire deal was being co-ordinated by their respective lawyers, CoCubes wound up with a bill of Rs 3.5 lakh. “And we had no money, we were back to step one,” he recollects. “We asked our lawyers to give us six months’ time to pay them and went back on the road. We had made some critical hires but did not have the money to pay them. The biggest realisation came then – you have closed the funding round only when the money reaches your bank account,” says Grover
However, Grover is unwilling to offer advice to other entrepreneurs. But after some cajoling, he relents, “Stay focused and tough times will pass.”
Staying Focused Yields Results
By 2009, CoCubes had reached out to 45 colleges and 10 companies. It was then a team of 12 and its revenues had risen steadily from Rs 4 lakh recorded in fiscal 2008-09 (ending March 2009).
In March 2009, Ojas Venture Partners, a Bangalore-based early-stage investment fund, stepped in to invest $700,000 (which was around Rs 3.5 crore at that time) in CoCubes. The funds were used to pay off loans, the lawyers and scale up.
Marketing received a boost when Ojas introduced a top-level hire to CoCubes. The new recruit was Sanjay Arora, who was then working with CRP Technologies India as vice-president, client servicing and marketing. Arora joined as the CMO (chief marketing officer), heading corporate sales for the start-up.
Change In Biz Model
When CoCubes began, the idea was to keep the service free for colleges and charge corporate houses. But over the past three years, this turned on its head, says Grover.
So far, the company had been charging both companies and corporate houses for access to the website. While campuses had to pay Rs 30,000 per year, enterprises had to fork up Rs 5,000 per campus. By fiscal 2009-10, CoCubes had reached Rs 48 lakh in revenue and decided to change its model, with feedback from its sales force.
“It was the moment we had to ask ourselves – what next?” says Grover. They experimented with charging Rs 500 per student per annum, which resulted in a boost in revenues from Rs 48 lakh in fiscal 2009-10 to Rs 2.4 crore by fiscal 2010-11.
One of the big makeovers that has essentially added value to the website is the launch of online engagement for large corporate houses. On the CoCubes site, corporate houses can upload photos and videos of their respective offices and publish polls and news to attract students and give them a glimpse into the corporate life. Take, for example, Accenture’s custom page or that of Capgemini’s on CoCubes. At present, there are 50,036 students from 1,093 colleges following Accenture while 8189 students from 259 colleges follow Capgemini. The Cognizant page on CoCubes has 39,056 followers from 1,232 colleges.
But do we need another site when the Internet is full of news and information about these companies? Grover says that the target audience needs to be taken into consideration here. “We are talking about students from tier 2 towns – students who haven’t heard about LinkedIn and don’t know how to find information on the Web. Also, corporate sites are more attuned to executives, not students. Those students need a specialised portal, so that they can easily understand and absorb relevant information,” he explains.
CoCubes is not a social media site, though. “No, that is not the intent,” clarifies Grover. This is about students who don’t know what a company does or what a job profile is. They simply sit through exams and tests. But even if they are spending time on social networking sites like Facebook and Twitter, we have tried to make this channel as interesting as possible while teaching them about careers. Employability is as much about knowledge and soft skills, as it is about hard core technical skills that they learn in engineering,” says Grover.
“India has a growing economy and is overlaid with the problem of employability, where students are being churned out but not accepted by the corporate world. CoCubes is providing the fundamental step of information access,” comments Gautam Balijepalli, Partner, Ojas Venture Capital Partners.
A management decision to focus only on engineering colleges was taken in 2010, aimed to help the company scale up comprehensively. Grover and Goyal are confident about their choices, having crossed Rs 4 crore in revenue already this fiscal. They also claim a run rate of Rs 18 crore-Rs 20 crore for the fiscal 2011-12.
There are other companies who are trying to address the campus recruitment process with advertising-based models. Freshersworld.com by Cassius Technologies Pvt Ltd offers a wealth of career information, resources on online tests and interview tips. It claims to have more than a million resumes and connects to 1,000 companies. Then there is FirstNaukri.com by Info Edge, the company behind top recruitment portal Naukri.com and real estate portal 99Acres.com. This is a job site for campus hiring and has partnered with 3,000 companies. There are also government initiatives in the USA and Australia in tune with what CoCubes offers.
CoCubes spends Rs 60 lakh-Rs 70 lakh per month, of which 66 per cent has been spent on human assets and the rest on technology. It has now separate teams for colleges and companies while each relationship manager interacts with about 40 colleges.
From an 82-strong team stationed across five sales offices – Delhi, Mumbai, Kolkata, Chennai and Bangalore – CoCubes plans to reach a total of 100 employees by end of this year. Profitability is the next goal and which Grover expects to reach the target by March 2012.
But there are still miles to go. Grover says that his KRA (key result area) for this year is to add more graduate colleges – among them is the lucrative nursing sector.
Although CoCubes offers to connect corporate clients to premier colleges through its platform, it is not the focus area of the company. There are 20,000 colleges in the country and 99 per cent of those are second and third tier institutions. And these happen to be the key focus area of CoCubes. “The aim of CoCubes is to connect the dots for students and help them build a successful career. The target is to help colleges increase employment and employability of their students. On the other hand, we will continue to reach out to companies and enable them to engage and hire from these colleges,” concludes Grover.