These former Nike, Adidas executives are building a startup for ‘growing feet’

Plaeto has received $2.25 million in funding so far by investors.

A letter from a student in 2010 asking for a discount on Nike shoes that he wanted to buy made Ravi Kallayil realise the ‘need gap’ for good footwear among schoolchildren in India.

Kallayil, who spent 15 years with Nike in various roles, was then director of new business development for the company in India and was responsible for expanding business channels in the country. A range for schoolchildren was one of his ideas, but it didn’t take off.

The kid got the discount and Kallayi a start-up idea.

“I still carry his thank-you note,” Kallayil told Moneycontrol. “And this incident got me thinking – that this is just one kid, but there are millions out there in need of good footwear but no one is providing it. This is when I first realised there is a big business for children’s footwear in India.”

When Kallayil moved back to the US in 2013 as head of Nike’s ideation team, he started work on a project for the children.

“On weekends, I would work with my mentor Bruce Kilgore, who is a designer for sportsmen such as Michael Jordan. We were working on a project to make a product for India but unfortunately, we could not prove the concept to the company,” Kallayil recounted.

Eventually, Kallayil and his team realised that it would be difficult for this idea to materialise within Nike and he quit the company to start his own venture.

Sara Kilgore, his colleague from Nike, along with Pavan Kareti, who has worked with Adidas, Apple and Nike, came together with Kallayil in March 2020 to launch Plaeto, based in Bengaluru.

Kallayil is the CEO of Plaeto, while Kilgore leads its design team and Kareti is the company’s chief operations officer.

Plaeto has received $2.25 million in funding so far by investors including Babu Sivadasan (cofounder of Jiffy.ai, Envestnet.com, Stamps.com), Mathew Cyriac (founder of Florintree Advisors and former MD of Blackstone India) and Kittu Kolluri (founder of Neotribe Ventures). The company signed up cricketer Rahul Dravid as its brand ambassador in November last year. The company closed its pre-series A round of funding recently.

Complex feet

Kallayil moved to India to launch the startup and started researching the challenges faced by schoolchildren and their parents in the country. The company took data of feet measurements from 500 children and interacted with about 200 parents.

“We tried to explain to the parents how complex feet are, especially in children, and if you don’t treat them well while growing up, then you can end up with injuries later in life,” the founder said.

For instance, he said, if there is no space for toes to move around in a shoe, then the pressure distribution under the feet changes and as a result, the way one walks, the pressure on the ankles, knees and hip all changes, and much later, the impact is felt.

Based on these insights, the company tried to solve some of the issues faced by the parents and designed shoes for the Indian school-going children. One example is the shoe especially made for children who outgrow their footwear quickly. According to Plaeto, 50 percent of the children aged 5 to 12 outgrow their shoes within a year.

Kallayil said the company applied the design of ski boots, where padding is used to prevent injury, to make shoes for growing children. The startup designed a shoe with a liner that can be removed to increase its size.

“This way, parents can get the shoe to last 9-12 months for their kids,” he said.

The startup charges a ‘premium’ for the innovation offered in its shoes, which are priced at Rs 1,400 on average.

“We often hear from parents that they do not mind shelling out extra for their children’s well-being,” said the founder.

The Plaeto range is available on Amazon and Myntra. The company is in discussions with footwear retailers to introduce its shoes in offline stores.

Finding the right ‘fit’

“It is a big market. There are over 3 million children in the country and about 1.5 million go to private schools. The school fees range from Rs 20,000 to Rs 3.5 lakh yearly,” said Kallayil talking about the scalability of his startup.

India is the second-largest producer and consumer of footwear in the world. The market size of the footwear industry was $10.6 billion in 2019 and estimated to grow to $15.5 billion by 2024, according to a report on the website of Invest India, the country’s investment promotion agency.

The company, however, faces a challenge in raising awareness about foot health in the country.

According to the founder, the biggest challenge is the problem of increasing awareness about its products.

“If we just make shoes, then we are like any other company, but we talk about good foot health to parents and that is our selling point,” he added.

The company is reaching out to schools to build awareness and is creating videos targeted at parents and children that talk about the importance of good-fit shoes for children.

Plaeto had also faced some operational challenges, especially in the wake of Covid-19 because its design centre is in the US. The slowing of the pandemic, the founders hope, will speed up processes with travel restrictions being lifted.