Greetings! I'm Rahul Dua.
I welcome you to Shark Tank season 2.
Co-presented by ACKO. Payments partner, Cashfree payments.
Ideas partner, Smallcase. Co-powered by PokerBaazi.
Money partner, Fi Money. Online food partner, Eatfit.
Eyewear partner, Lenskart.
I hope you are ready because pitchers, Sharks
and the host are ready.
You may see for yourself.
[ethereal music]
[dramatic music]
Sharks, we came here to tell you about a plant
which has been growing in India for ages abundantly.
During British rule, it was used
to fence the railway tracks
and now farmers use it to protect their fields.
Amazing!
Aside from that,
nobody in India explored the potential of this plant.
You know, familiarity breeds contempt.
This plant is called Agave
and it's also called Raamabaans.
I started researching the Agave plant.
Then I came to know about its true potential.
One of the species of this plant
is used to make Mexico's world-renowned tequila.
[laughing]
Sharks, when people in Mexico can make a world-renowned drink
using this plant, why not in India?
So I started making
premium agave spirits from this plant
and went on to launch my brand in Goa.
I introduced a new alcohol category to India.
Presenting DesmondJi.
[exhilarating music]
like Agave Spirits.
We started this business in 2011
and our innovation wasn't limited to Agave.
We launched a new product.
It's called Mahua Spirit.
'Madhuca longifolia'
It's significant to the tribal culture of Central India.
Ouch!
DesmondJi makes eight types of spirits,
and forest-to-bottle brand.
We have sold 12 lakh bottles till now
is to use Indian raw materials
to make innovative and international-quality alcohol
and make it available to the world.
Our ask is
Welcome to Shark Tank India season 2!
- Thank you so much! - Thank you!
Please explain your journey. How did you reach here?
And where did you pick up this co-traveller? Tell me that as well.
I graduated from IIT Madras in mechanical engineering.
I applied for a scholarship in the US
for my Master's degree. Computer Science was a new subject back then.
I started working in a technology bank.
I came across a problem
which I solved. The Y2K problem.
using tools and services.
I did some innovations and started a company.
Later on, I decided to come to India for services.
- I came to India and did a partnership with Wipro. - Awesome!
Wipro remained my partner for eight years
and I acted as the global consultant specialist
in Y2K for 12 years.
- So you earned a lot. - It's apparent.
- Okay. - I earned enough to retire.
Yes!
I wanted to showcase India
globally and by chance,
my friends came to know
that I used to do amateur bartending in the US.
They requested that I serve cocktails to them.
is manufactured in just one country.
I started researching to find the answer to this question
and I came across this plant on the internet.
I did some basic quick-and-dirty research.
The Mexican latitude maps to the Deccan Plateau.
Temperature, soil
- and rainfall matched the Deccan Plateau. - Wow!
I had moved to Goa around that time.
I met his dad who is a famous botanist.
Botanist! Alright! Okay.
I befriended a Feni distiller.
I briefed them about my idea.
"I have researched a lot.
So let's go and search for this plant in the Deccan Plateau."
We planned a seven-day trip. If we didn't find it we would've returned.
We found it on the very first day.
- I researched for four years. - Wow!
I took four years and built Greenfield distillery.
Then we manufactured the drink.
We were launching a product in Goa when he graduated
from IHM and he was 20 years old.
- When did it happen? - 2011.
Okay! You two have been together for 11 years.
You made DesmondJi popular in the country.
It's a great journey. Thank you for sharing with us.
Desmond, tell me something.
- You are talking about Agave. - Right.
Is tequila equivalent to Agave?
No. Tequila is made with a particular Agave species.
It's called Agave Tequilana.
We use blue-green Agave which is known as Agave Americana.
What is the name of your drink made from Agave?
Indian Agave.
We are the only Agave manufacturers in Asia.
Even Mahua wasn't made by anyone before.
Mahua is made by tribals.
Agave spirit isn't manufactured by anyone in India
We make it in the country liquor category.
We have three major markets.
One is Maharashtra,
Why didn't you try other cities like Delhi?
There was no category for our drink.
It becomes a problem.
We need to first create Agave's category.
Our bulk spirit buyer
can't find a category so he's petitioning
to get a category for Agave spirits.
Suppose you create a category and make it famous,
would there be a problem if you have competitors?
Nobody makes it.
[sweeping music]
- Please see our video. - Please show it.
It's a huge plant. Nice.
- It's 44 acres in size. - It's spread across 44 acres.
- 44 acres! - Wow!
- Who does the land belong to? - It belongs to us.
You can see the biggest cocktail glass in the world.
[laughing]
That's a fun video!
It's a cocktail glass with a capacity of 40,000 litres.
Its structural engineering and design are just one in the world.
- Wow! - Wow!
It's a water tank.
- What is its height? - 40 feet.
[dramatic music]
My God!
What about your sales?
We earned a revenue
of Rs. 12.42 crores in the last 12 months.
Rs. 1.25 crores.
Did your revenue decline in the last three months?
We didn't have the capacity
and the raw material to make it.
We refused orders.
Who are your customers?
Bars and restaurants, wine stores
and if you drink a margarita in Bengaluru,
most probably it'd be DesmondJi's. Also, in reputed bars of Mumbai.
- Why don't they buy imported ones? - It is expensive.
Price! Ours is the most affordable
and good quality too.
What is your sales growth through the past years?
Last year, we earned a revenue of Rs. 7.5 crores.
Earlier, we didn't sell premium bulk spirits to anyone.
Currently, we are focusing on Mahua to increase its sale.
Because it's uniquely Indian spirit.
We sell bulk premium spirits
to other companies to make them premium.
One brand buys all our premium spirits.
People are after us to buy these
but we say that we don't have the capacity.
Rs. 14 crores.
In your business of Rs. 14 crores,
how much is earned by DesmondJi and B2B separately?
[suspenseful music]
It must be fifty-fifty.
Last year, we made sales of Rs. 7.5 crores.
And this year, you'll earn Rs. 7 crores. So DesmondJi brand is flat
and B2B business is growing.
No, they have a capacity issue. DesmondJi can also grow.
Yes. There's a capacity issue.
Our market goes dry regularly.
Why aren't you growing the DesmondJi brand instead of supplying others?
We get a good profit margin
and once we sell...
- You are stress-free. - Yes.
What's your profit in Rs. 12 crores?
Our gross margin is around 65%.
Please tell us your net profit.
- It's Rs. 2.5 crores out of Rs. 12 crores. - Not bad.
So your EBITDA is 20%.
What's your bank balance right now?
It's around Rs. 6 crores.
What is your constraint? Did you take a loan?
No! Ours is a debt-free company.
We were funded by investors
We started with Greenfield Distillery in 2007.
Between 2007 and 2011,
we raised 1 million US dollars
equivalent to Rs. 6 crores back then.
And then we raised twice.
In total, we raised 3 million dollars which is Rs. 18 crores.
How much equity does the investor have? And who is your investor?
The combined percentage of all the investors is 76%.
Oh!
What's your share in 24%?
but it's valuable.
How so?
You raised ¤ 3 million
which is Rs. 24 crores as of today. Right?
You've built a business of Rs. 14 crores,
half of which is B2B.
Where is the value creation? How is 1% a lot then?
[intense music playing]
And you've brought a 100-crore business here.
Who is the investor?
There are many investors.
There are around 67 angel investors.
Wow!
Gosh! Any private equity or VC?
Not a single VC.
But angel investors have invested as VCs.
[intense music playing]
As per my knowledge of this category,
a snob value is attached to it.
People like foreign brands.
- They're image conscious because of society. - Hmm.
Of course, there's a different section
of people who will drink your brand and local brands.
But it will be difficult to scale beyond a certain point.
And for that reason, I am out.
Thank you.
Look. I think you've created an innovative business with a moat
which isn't easy for others to enter.
Personally, your business is good
- and it will do well in the long term. - Hmm.
I might regret this as a business deal.
I believe this will grow to Rs. 100 crores from 12 crores.
My personal interest is to invest in a tech business
which will generate about Rs. 5000 crores in 10 years.
So, I am out due to the opportunity cost.
- Okay. - And personal interest.
- Thank you. - Thank you, Peyush.
You might have started this as a lifestyle business.
You made a lot of money, you found a path.
You raised funds after that.
And before you knew it, you had diluted 76%.
Now, you are stuck.
76% is already diluted.
So, Rs. 1 crore for 1% is out of the question.
Your brand's business is Rs. 7.5 crores.
Even if we value it,
I'll take about 5 to 6% equity.
That will take your dilution to 76 to 80%.
It is non-sustainable.
There will be no equity left with you.
You'll have to gather your engineering mind
and the wisdom you've earned in your journey,
and think about what you should do.
I'm not seeing a way out for you guys.
But you know, miracles do happen. All the best. I am out.
Here's my perspective.
I'll ask for DesmondJi Agave when I step out to make a purchase.
That's when the margins will also grow eventually.
Where sales don't come in because your brand image is poor
and someone else sells it, that will just lower the margin.
I want to place some aggressive bets in life
which can bring me profits.
So, I am out for this reason.
[intense music playing]
I have just one suggestion.
- You should take some debt. - Yes.
Your business is doing so well.
- Rs. 14 crores is no joke. The business is doing good. - Hmm.
Leveraging your business is not a bad idea.
- Leverage it and give it back with profits. - Yes.
But take some debt leverage.
I'll tell you one thing. Don't be disheartened.
- You're quite profitable. Rack your brains. - Hmm.
You can make profits.
And, sir, please give him a healthy percentage of equity.
Only then do you have a future. Good luck.
- Good luck. - Thank you so much.
- Thank you. - Thank you so much.
Cheers!
[theme music playing]
[theme music continues]
[theme music fades]
Ciao, Sharks.
Mozzarella.
- Bocconcini. - [chuckles]
Stracciatella!
Mascarpone!
They're not names of Italian cities.
They are the names of different Italian cheese.
Italian food is incomplete without them.
We, too, consume a lot of cheese.
Whether it be pav bhaji or dosa,
we add cheese to everything.
But the cheese available in the market is highly processed.
It contains artificial colours
as well as added flavours.
That's why they don't taste good.
My name is Rajas Dhote and I'm from Mumbai.
Crèmeitalia makes fresh cheese
made from 100% fresh milk.
It is 100% natural,
and that makes it tasty as well as healthy.
Across India,
we are available in 220 stores in 18 cities.
Sharks, our ask is
Rs. 90 lakhs for 1.5% equity.
- Cheese. - Cheese.
What's the valuation?
Rs. 60 crores.
Do you speak Italian?
Italian.
Mamma mia!
- Mamma mia! - [Sharks laugh]
You might know more Italian than him.
Chunky Panday said it in a movie.
"I'm joking!"
- "I'm joking!" - "The last pasta."
- "The last pasta. I'm joking!" - "The last pasta."
- You wanted us to taste something. - Yes.
What is this, bro?
- Mamma mia, the spoon fell! - [laughs]
[intense music playing]
Hmm. Nice.
Tell us what we're eating. What is this?
That's Jalapeño Sour Cream.
That's Burrata.
is Scamorza.
That's Burrata.
- Burrata. - It's our highest-selling product.
- This is really fresh. - It tastes good.
Yes, thank you.
We want to be a specialist cheese manufacturer in India.
There is no premium cheese brand yet.
You'll see mass brands if you check the market.
But there isn't a premium brand.
[music playing]
What drew you to cheese?
- What have you done in life? - I was studying in London.
I was pursuing print media management.
My family business is that of printing and packaging.
- I came to India. - Yes.
I helped my dad run the business for 10 years.
I wanted to do something of my own.
The family business will go on. There was no excitement.
I had no idea of the F&B business.
My brother has this one friend.
He ran a chain of quick-service restaurants.
It occurred to me that he was in the food industry and I approached him.
Did he not partner...
- He's with me. He's my partner. - Where is he?
What's his status, where is he and what's his shareholding?
He has gone to Italy to pursue a course.
- On this? - Yes, that's right.
I hold 35.15%.
He also holds 35.15%.
- How much? - Rs. 1.3 crores
at a valuation of Rs. 7 crores.
My business was Rs. 27 lakhs in April.
- Today, I am doing Rs. 62 lakhs. - Per month?
Per month. So, it has multiplied 2.4 times.
I want to set up a new plant.
This new plant
- will have four times the capacity of the previous one. - Wow!
- You've left us speechless. - Hmm.
Who else in India has such a cheese factory?
Four people do.
There's one in North and one in Gujarat.
But very few people will be able to match
- the scale that we will be manufacturing at. - Hmm.
Tell me something. Freshness is your USP.
- Freshness. - Right?
Tell me about your delivery.
- I am asking you this because as you scale... - Right.
If you want freshness to be your USP,
then keeping a good delivery partner pan-India
- to keep the freshness intact, will add to your cost. - Yes.
As per the plan we have laid out right now,
we've set a special price with our delivery partners.
But when the volumes increase,
we will send the goods to them in bulk.
Technically, our cost will go down.
The price is currently high because we deliver lesser units.
In future, we will be launching fresh dips.
That will capture the market.
- That would be good. - What dips?
But your shelf life must be very short.
- Your products must be getting stale. - Our RTV,
Tell us your unit economics.
Before we get into details, tell me something important.
Bottom line, you did Rs. 62 lakhs last month.
How much are you left with?
- Rs. 9 lakhs out of Rs. 62 lakhs. - Rs. 9 lakhs. Okay.
- After all the expenses. - Yes.
Out of Rs. 62 lakhs, what is your restaurant's contribution?
50%.
I always have a question when I see these things.
"Is this an indulgence of the rich?"
But now Indians, even middle-class people...
Can afford it. What's the price of one?
A box of Burrata costs Rs. 335.
First of all, I don't believe that cheese
- I think that India is changing. - Right.
People are becoming aspirational.
You're bringing down the price of these products.
If you buy imported burrata cheese,
- a box will cost you Rs. 1000. - Yes.
Is the cheese market in India even that big?
Sir, you can't imagine how big the cheese market is.
Tell us the market for fresh cheese and not just cheese.
and mozzarella cheese for pizzas.
That market is Rs. 700 crores.
The market for fresh cheese is only Rs. 120 crores.
Are your numbers correct?
[tense music playing]
I am talking about my current market which is Rs. 120 crores.
The handful of companies we know,
if we calculate their turnover,
that's the size of the market as of today.
Tell us the total market of all the categories you'll enter into.
That cheese market is Rs. 4000 crores.
- We are targeting Rs. 730 crores as of today. - Got it.
In 2026, the cheese market will grow by 26%.
- Every year? - Yes, every year.
[tense music playing]
Rajas, the market of fresh cheese,
Rs. 120 crores as you mentioned, is quite an insignificant TAM.
You spoke of foraying into that Rs. 700 crores market.
Big players are already entrenched there.
So, this business, in terms of growth,
doesn't seem enticing and exciting.
And for that reason, I am out.
[intense music playing]
Tell us your unit economics.
- You own two businesses. One's B2B and the other is B2C. - Right.
Tell us about both.
Our margins in the HoReCa business are 30 to 35%.
First, I want to... Sorry.
I want to understand where your expenses lie.
You told us the entire thing together.
Are you asking about my factory cost?
Tell us that.
I'm left with 21%.
[intense music playing]
Does your cofounder oversee finance?
Yes, he does.
- It's evident. - That's why I can't understand you.
You're saving 20%.
No, he isn't.
You said you saved Rs. 9 lakhs last month
out of sales of Rs. 62 lakhs.
So, that's approximately 15%.
But I did say that HoReCa and retail combined were 21%.
Tell us again how much you're left with.
Rs. 9 lakhs out of Rs. 62 lakhs.
- Okay, alright. - That's 15%.
Alright. That's what I said.
Who is the CEO?
- He is. - He and I both are CEOs.
Who is the chief then?
He is the chief.
[dramatic music]
I don't think TAM is a cause of concern in this market.
This category is still growing and you came at the right time
as you have the opportunity of category creation.
Your product and the packaging are good.
I don't trust your team.
Your numbers are confusing. I don't understand your margins.
So I'm out. Otherwise, I would have been interested in this category.
- Rajas Dhote, let me tell you my decision. I'm out. - Okay.
There are two reasons.
As I said, it's an upper, premium and luxury segment.
Secondly, your pitch wasn't up to the mark today.
When we don't know the sales figures of a business,
it's difficult to bet on them.
So I'm out.
You look innocent and I liked talking to you
but I don't find the sharpness in you to handle a business.
[suspenseful music]
So I'm out.
- Okay. Thank you, Shark. - Thanks!
Though there is confusion regarding the numbers, you are resolute.
It's not easy to represent your business here.
I can't invest due to a different reason.
- Okay. - I think your business is 50% B2B currently.
And it's speeding towards that sector.
[sweeping music]
- Right. - The second challenge is price erosion.
- Right. - The profitability reduces soon
because the market doesn't have the pricing power.
So I'm out.
I think you are doing well.
You don't need investment as you are in profit.
Please continue your business. You'll surely succeed in future.
- Thank you, Sharks! - All the best!
- Thanks for your time.
Thank you, Sharks. Thanks for your time.
Rajas, Sharks relished eating your cheese.
I'm sure people must have checked your website by now.
You'll be flooded with orders.
Please focus on your production.
- Let's open your account. - Please!
Cashfree Payments gives you out-of-the-world payment solutions
for your out-of-the-world ideas.
- are added to your account. - Thank you!
High-growth Indian startups use Cashfree
for hassle-free transactions.
- I wish you the best and take care. - Thank you!
[ethereal music]
[dramatic music]
Sharks, imagine that you are getting late for the office in the morning.
And you need to refuel your car.
The nearest fuel station has a long queue of vehicles.
You'd waste two hours there.
Let's talk about fuel companies now.
There are more than 80,000 petrol pumps and CNG pumps in India.
Even though we are so technologically advanced,
the CNG companies only know
the amount of fuel they sold in a day.
They come to know about it only when a person manually notes it down.
These companies have no idea about the vehicles getting fuelled.
Whether the cylinders of those vehicles are tested or not.
Also, if an attendant was present
at the fuelling station at that time or not.
Basically, there's no way to measure efficiency.
[sweeping music]
If we provide the basic information to the fuelling companies,
they would efficiently manage their business and increase their profit.
Hence we introduced Nawgati.
[upbeat music]
Greetings, Sharks! I'm Vaibhav Kaushik and I'm 24 years old.
- I'm Aalaap and I'm also 24 years old. - Wow!
I'm Aryan. I'm 23 years old.
We are the cofounders of Nawgati and we hail from Noida.
Sharks, Nawgati is an online ecosystem
which solves the problems of companies and customers alike
using two of our products.
First, Nawgati Fuelling App
and Aaveg dashboard.
Currently, the Nawgati Fuelling App informs customers
to save them time and money.
[suspenseful music]
We provide a dashboard
They can monitor their attendants.
Moreover, they can find out the amount of fuel purchased
by a particular vehicle and the amount paid by them.
[sweeping music]
We provide various kinds of key metrics
so that the safety and efficiency
of their business are maximised.
As of now, Nawgati
is already working with India's biggest gas company Indraprastha Gas
and India's biggest oil company Indian Oil.
Additionally,
we will soon start working with 13 more Indian oil and gas companies.
Our app has been downloaded 6 lakhs times
and we have 1.25 lakh monthly active users.
Daily 15,000 people
use our app for 15 minutes.
The locations of all the Indian CNG stations can be found on our app.
We have come here to make this vision a reality
by asking you for Rs. 67 lakhs for 2% equity in our company.
a fulfilling one with Nawgati?
Vaibhav, Aalaap and Aryan,
- welcome to Shark Tank. - Thank you!
We Sharks become energetic when we see young entrepreneurs.
Wonderful to see you here.
What does Nawgati mean? 'Naav' means boat.
In Sanskrit, Nawgati means navigation.
But its spelling has a 'v'. If your spelling has 'w', it's a speedboat.
You must say boat
because Aman will be interested in you right away.
- Here's the cheque. - "Take your cheque."
- We would like to give you a demo. - Show us a demo.
Sharks, this is our consumer-facing Nawgati Fueling App.
[joyful music]
This app informs our consumers about the stations available nearby.
By what time they'd reach there
and the waiting time after reaching there.
This information is available on Google nowadays.
We knew this question will be asked.
- The thing is... - They are so elated.
"We are prepared for the question they asked."
You can find the gas stations using Google
but you won't get to know the waiting time.
We know the exact level of congestion at the gas station.
Suppose, there is a parking lot nearby
but you could mistake it for congestion.
You prepared this using Google Map API, right?
- Yes. The traffic API is definitely made using it. - Right?
Let's proceed.
Let's come to the star of the show that helps Nawgati earn money.
[laughing]
It's good that you called it the star of the show
because it's quite obvious.
These things are eventually a part of the map.
[tense music]
Very good!
They connect their device to the CCTV and dispensers
to get the data of the transactions done at a particular time.
[sweeping music]
Let me show you the features available in Aaveg.
The yellow icon you see is an autorickshaw.
The icons of cars represent a four-wheeler.
The +1 symbol shows that one car is waiting at the dispenser.
- Dispenser means the unit used to fill gas or petrol. - Okay.
Let me tell you about the cross.
If you go to the CNG station,
they affix a yellow rod in the front.
What if the car moves by mistake while the nozzle is affixed?
CNG is highly combustible
and there are chances of a fire breaking out.
This station that we're showing,
they don't have stop signs or don't use stoppers.
Hence, you see a cross.
- This information is important for companies. - Yes.
- It's a part of their SOPs. - Yes.
Is the company penalised if they don't comply with the rules?
- Yes. - Yes.
Let's go to the overview screen. Let me show you.
A gas company keeps track of how many kilograms of gas they've sold.
They usually make manual entries.
What we've done is integrated it with dispensers and CCTVs.
We can tell that
out of 1000 kg of gas, 50% was given to autorickshaws.
30% to cars and 20% to heavy motor vehicles.
I'll show you point-wise utilisation now.
- Dispensers... - I can't see.
- Let me come closer. - Sure.
- I want to understand this. - Please come.
Here's the point-wise utilisation.
Nozzles are being used only for about 10 to 15%.
The rest of the time is wasted collecting payments
or opening the bonnets of cars.
There's scope for companies to improve efficiency here
by reducing the time taken.
- Hydro testing is performed on CNG vehicles every 3 years. - Correct.
In the absence of hydro testing,
there are chances of an explosion taking place at the CNG station.
One cylinder explodes and the station is shut for 6 months.
The company suffers a loss of Rs. 2 to 3 crores.
But checking the metal detector
in CNG vehicles every time is not possible
and neither do people do it.
We link it with
the Petroleum and Explosives Safety Organization's (PESO) database
Within two seconds, the station operator gets a text
whether the car is good to go to be fuelled up.
Very nice.
How do you make money?
Aaveg offering is live through the subscription model.
We take a fixed amount from every oil and gas company
for every station each month.
What is that amount?
It ranges between Rs. 5000 to 25,000.
for congestion if they want to know the waiting time.
A different rate to find out whether hydro testing has been done.
A different rate for transaction billing.
From fuel stations.
- From companies. - Companies.
Companies. Petrol pump owners are not paying for this.
- Correct? - They will.
- We will... - In future.
[tense music playing]
Just companies for now.
Okay. And you've nothing to do with consumers.
Six months free for consumers...
- Then they will pay too. - Yes.
Why will petrol pump owners and customers pay you?
- I'll tell you why. - Why will they pay you?
- You're saving them Rs. 2 crores. - Yes.
With respect to compliance.
- They will pay you for that alone. - Absolutely.
Are consumers paying you?
- Consumers haven't started yet. - Okay. And they won't even pay you.
What for?
Consumers won't pay.
Understand the mindset of a CNG consumer.
He's saving money.
He bought a CNG car for the mileage.
Taxi drivers specifically are out of the question.
CNG has two primary segments.
Private and commercial.
- Right. - Commercial, yes.
They might not pay for an app.
But their fleet operator may take a plan.
They may take a plan.
Your business can sustain itself even without that.
Why are you going into quicksand?
Yes.
What is your current monthly revenue?
Our current month's billing will be around Rs. 4 lakhs.
We will make a revenue of Rs. 2.5 crores this financial year.
From customers that materialised through the pilot stage.
- Who? - IGL, Indian Oil,
- Mahanagar Gas, Gujarat Gas, Sabarmati Gas... - From them?
All of these companies.
What is your projected revenue for 2023-24?
20x. Rs. 50 crores.
- Rs. 50 crores. - Yes.
How so?
So, we are currently deploying directly with companies.
In the beginning, companies will allot 5 to 6 fuel stations.
And as it rolls out, it increases to 1000 to 2000 stations.
But there will come a time
when suppose one or two companies fully implement it,
then how will your business grow?
There are over 80,000 petrol pumps as of now.
This number will increase to 125,000 by 2025.
Assuming everyone goes with your solution.
What if someone else launches this in the meantime
at Rs. 2000 per station?
Companies will switch from your Rs. 5000.
We are ensuring to build very strong relations.
So, you can't bank on relations.
If you sell something for Rs. 5000 and I start offering it at Rs. 500,
then relations will take a back seat
to financial discipline, you see?
What is it you are doing that no one can compete with you?
No one has access to the fuelling data.
There's nothing defensible about it.
If I start my company in future,
then I can compete with you, right?
I could install the software and hardware of 4 CCTVs
using software on my computer.
I'll be able to track it too. I'll build a dashboard.
What is your equity split?
35%, 29% and 23%.
What's the valuation?
- Rs. 33 crores that we're asking you. - Okay.
Other than that, a consortium of angels
that has former leadership of tech companies are coming on board.
They have confirmed to give Rs. 80 lakhs just this morning.
Okay. Are you making profits or losses?
We'll be billing for the first time. So, we're making a loss.
- Rs. 6 lakhs. - Okay.
This number will go up to Rs. 15 lakhs over the next 2 months.
Why?
We wish to hire four more tech employees.
We also want to outsource a portion to expand operations
as well as hire some people.
I am of the opinion
that consumers will not pay for this.
I'm not able to appreciate it
and for that reason, I am out.
I'd have been interested if this had a tech moat.
But more companies will enter because of an operational moat.
So, I am out but I wish you the best of luck.
- Thank you so much, sir. - Thank you.
Do you know what oligopoly means?
This isn't just oligopoly, but government oligopoly.
Yes.
It's very hard to make money in this.
I started a company
where we sold our goods to a government company.
I used to stand in queues all day.
I had to shut down my company.
I believe this is a very hard business
and for that reason, I am out.
I have a piece of advice for you.
Aggregate a massive number of users.
The rest is up to you.
I wish you the best. Research the consumer angle.
When you get 1 crore users, that's when it'll work for you.
It's doable.
Negotiation is in our blood.
Get it? We need to have some aim!
Okay, tell us your decision.
[tense music playing]
Thank you for the offer. We have a counteroffer.
- Oh, no. - Yes, go on.
Rs. 67 lakhs for 2.5% equity.
Either it will succeed or fail.
You were ambitious to say you'll hit Rs. 50 crores next year.
That's a bit unrealistic.
But you might even do it.
Don't lose us over such a trivial issue.
[intense music playing]
Can you increase the amount then?
What will you do with all that money?
There should be a little negotiation on both ends.
Fine, let's close this if you wish to negotiate.
This is my last offer after which I'm out. Okay?
[intense music playing]
Rs. 67 lakhs for 3% equity.
Normally, I say let's set it ablaze, but I will not say it today.
- It's fuel! - We want to avoid that!
Never at a fuel pump!
- We'll douse the fire. - That was a good one.
[music playing]
Aman and Amit chose Nawgati and also invested in it.
It's your turn to choose now.
Smallcase is giving you the option
to choose one of the top-industry stock portfolios.
It's about investing your money long-term.
And the choice is yours.
So, what will it be?
Will it be the IT industry's stock portfolio IT smallcase?
Or the banking industry's stock portfolio banking smallcase?
We own an IT company, so we prefer IT.
India has so much potential to expand.
Even the oil and gas space we are currently working in,
- resources are lying untapped. - Okay.
So, with IT smallcase's help,
- you would like to tap oil and gas resources. - Yes.
This is a confluence of two industries pretty much backed on IT.
Would you like to do the honours yourself
by choosing IT smallcase?
Congratulations. Smallcase gifts you
the IT smallcase portfolio worth Rs. 51,000
straight into your demat account. Congratulations!
- Congratulations. - Thank you so much.
Congratulations to you too.
I'll say it when you download the Smallcase app.
Portfolios managed by the finest financial experts await you.
So hurry! Well done.
Congratulations once again.
[theme music plays]
[theme music fades]
Sharks, the future is electric.
But electric cars are very expensive.
Sharks, why do we buy cars?
We pay the full price but it depreciates with time.
But millennials and Gen Z don't want to buy them,
they merely want experiences.
To solve both these problems, we present SWYTCHD.
[music playing]
An all-inclusive electric vehicle subscription business.
In one monthly payment,
When the month ends, the customer has a choice
to switch from one vehicle to the other.
If they don't want another vehicle,
they can stop their subscription.
SWYTCHD provides customers with this flexibility.
In 8 months of operations,
Bengaluru has given us 127 cars through monthly active subscribers.
We have over 700 people on our waitlist.
Sharks, we have come here
don't buy and depreciate. Subscribe and appreciate.
Thank you.
[music playing]
Wow!
Sameer, you're looking electric!
Thank you.
- You're 29 years, right? - Yes.
Tell us your background.
Then we'll switch to the business.
Certainly, Peyush. My background is in automotive.
For over a decade, I've worked with Jaguar Land Rover,
the car business, in the UK.
Most recently, I was the Global Head of Pricing,
pricing strategy and competitive intelligence.
I have worked in many senior leadership and management roles
at Jaguar Land Rover.
Senior manager in marketing and commercial,
business planning manager for autonomous cars,
corporate strategy manager of...
- Well-versed in the automotive... - You did all of this at 29!
Yes, I was the youngest manager
and youngest member of the senior leadership team ever
in history.
One of the inspirations of SWYTCHD is that
I got a perk when I became a manager.
That was I could switch between a Jaguar and Land Rover.
One car, every six months
or every 6000 miles or 9000 kilometres.
Sameer, what do you change every 6 months now? This bike!
- No, this is available on a monthly subscription. - Okay.
You can change monthly if you so wish.
But you got that idea from there.
- Yes. - You could switch cars there.
I have three questions.
- The first question is on subscriptions. - Yes?
Subscription models just didn't get a positive response in India.
What's the reason for that?
- Yes. Globally, petrol and diesel subscriptions don't run. - Okay.
- But the EV model might. - Yes.
Why? Because of economics...
Yes, if you want to buy it...
- Yes? - Expensive.
- It's really expensive. - Okay, I got it.
Second question.
All these companies,
including Ather as well as Bounce here,
offer subscription models.
- If you want to buy an expensive car, you can pay monthly. - Yes.
Correct?
Yes. You can take a loan and pay EMIs.
So, the first problem is addressed.
- You can take an expensive car on a loan. - Okay.
Your main benefit is
that today, you're driving a red car and you switch to blue next month.
- Yes... - That's your only benefit.
- No... - There's one more that he mentioned.
Insurance, breakdown and charging. These services.
If you buy a car, you'll have to do all this yourself.
Insurance... Let me clear up the confusion.
You only need to drive the car.
But, Sameer, it boils down to the same thing.
[intense music playing]
First, you said you offer cost benefit.
- That's why one must opt for it. - Yes.
Now you are saying
- that convenience is a major factor. - Yes, both are.
- Yes. - Alright? Let's forget about convenience.
Because I don't think it helps in making a proposition
as it has already been tried.
Yes, but my customers
fall in the range of 25 years to 40 years.
[dramatic music]
- They don't want to buy. - Yes.
Millennials and Gen Z in tier-1 cities
- already have assets. - The cap is reduced.
I think any model in India
where the asset ownership
doesn't belong to the one using it, becomes a challenge.
Because the asset is destroyed.
If six people ride this vehicle,
it won't last even for six months.
[sweeping music]
Firstly, it's a vehicle for personal use.
We don't provide SWYTCHD for logistics, Zomato and Swiggy usage.
No. We own 127 vehicles.
Only 31 out of them are shown as assets and mentioned in books.
The rest of them are leased under an operating lease agreement.
buy them and provide them to us on lease.
It could be 36 to 48 months for cars.
Who is taking the risk of asset deterioration?
The owner is taking the risk.
What is your cost of capital?
- Please explain the business first. - What is your cost of capital?
Okay. If a vehicle costs Rs. 1 lakh...
[ethereal music]
The lease term is for 36 months.
There's an assumption of 50% depreciation
- by the financier. - In three years?
- Three years. - Yes, three years.
So my monthly payments
are 50%. Rs. 50,000 divided by 36.
Plus interest on the principal amount of Rs. 1 lakh.
[upbeat music]
So my payment would be
between Rs. 2,400 to Rs. 2,750
depending on the value of interest. It could be 12.5%, 15% or 16%.
And I charge Rs. 4,500 per month for this.
Loans are given for new cars. If I buy a car,
I can get a loan at 8% to 9%.
Yes. Anyway, you'll pay between 8% and 11%.
Right? So your model is prohibitive
because you want to charge more than double in the name of convenience.
You may compare the cost of ownership,
EMI, insurance, servicing
and the cost of charging
versus my monthly subscription.
A car loan is for 5 years normally. 4 or 5 years.
Please explain in the light of a loan.
- Help me understand as a consumer. - EMI for 5 years is Rs. 30,000.
Insurance would cost Rs. 4,000.
The charging bill will be Rs. 1,500.
And the servicing cost will be
Rs. 1,000 per month.
- It adds up to Rs. 38,000 but you charge Rs. 40,000. - Rs. 39,000.
- Around Rs. 40,000. - So you are more expensive.
Sameer, let me tell you something as a consumer.
You said that the insurance costs Rs. 4,000.
- The insurance amount lessens every year. - Yes.
After five years, the amount will be half. Do you agree?
- Yes. - The way you are selling the product
makes me feel that you are misleading me.
You said that the monthly insurance cost is Rs. 4,000. It's not true.
[sweeping music]
- Please share your sales figures with us. - Yes.
- Go on. - Actual monthly subscribers are 127.
- Rs. 5.6 lakhs. - Yes.
Last month we earned Rs. 3.7 lakhs.
Growing well. Not bad.
- Alright. - Prior to that it was Rs. 2.1 lakhs.
The confirmed orders will help us reach
a run rate of Rs. 13 lakhs per month this year.
Did the corporates give you confirmed orders?
We operate in both B2C and B2B models.
In the B2B segment,
it's meant for the white-collared employees of corporates.
- Not for logistics. - It's not for delivery. I got it.
This model will work in the corporate sector.
It's important to understand the customer.
You are still in the UK, mentally.
Your style and elegance are appealing
but I feel you don't know the Indian consumer yet.
That's my personal view.
You must study the Indian consumers first.
For this reason, I feel that this model may not work
and due to that reason, I'm out.
I believe that over a period of time,
- this industry will consolidate. - I fully agree.
- And it would become affordable. - Right.
At that point, the masses which is the bigger TAM
will intend to pay EMI and own the vehicle.
That's the reason, your business
doesn't appear to be profitable in the long term.
[suspenseful music]
- And for that reason, I'm out. - Alright. I accept your decision.
I think your work holds a proposition.
- The challenge is you estimated the depreciation at 50%. - Yes
- And instead of taking the risk you passed it to the owner. - Yes.
- Suppose I buy 50 vehicles in future. - Okay.
And the vehicles break in three years.
I'd bear a loss
- but I won't collaborate with you in future. - Okay.
And I'll spread the word
- that your brand can't be trusted. - I understand.
So I'm out today.
Firstly, let me tell you
- that your current business... - Yes?
- It's called financial arbitrage. - Correct!
[tense music]
Secondly,
the true test of these businesses
is during a black swan event.
- Okay. - The lending businesses and financial arbitrage businesses.
Only those companies survive
whose balance sheets are strong.
You must have enough capital.
Over 20 years, they become the large finance companies
- that we see. - Correct!
I don't see that stability in you now.
For this reason, I'm out today.
But I'll surely take the address of your tailor. Thank you very much!
I'll give. Thank you! [laughing]
Sameer, please don't listen to them. I'm the only one left.
I'm interested in this business.
- I want to do this business for sure. - Okay.
I'm okay with subscriptions but I don't see the depth in you.
If you can sell me your business in the next 3 minutes, I'll fund you.
- Your last chance. - Alright.
[sweeping music]
Our consumers are millennials and Gen Z.
Sameer, suppose I'm Gen Z.
Now please sell the product to me.
Why do you want to purchase?
If you subscribe to everything,
personal travel is something similar.
Why do you want to buy if you can
enjoy the benefits of a subscription?
Sameer, you are being generic in your pitch. Right?
I expect you to explain
the benefits of SWYTCHD
versus buying a personal vehicle.
I'm an Indian consumer.
- The benefits... - I understand in terms of money.
There's an EMI of Rs. 4,500.
- Correct! - It costs Rs. 4,200.
Whether it's feasible or not. The Indian consumer calculates this way.
- Every family thinks this way. - Okay.
Let me tell you that I want to be out as you couldn't convince me.
[sweeping music] I understand!
I want to be out today but I'm interested in this model.
If you make a sharper pitch, we may meet later.
- Thank you! Bye! - Thank you!
- Sameer, I hope you remember what I said. - Yes.
Instead of SWYTCHD if you pitch STITCHED, we'll be interested.
Second entrepreneurial journey. Thank you!
- Good luck! - Good luck!
and be the ultimate Home Shark.
'In today's Shark Xperience segment, Aman, '
'Hashib from Ernakulam has a question for you.'
'You are famous in addition to being rich.'
'How do you deal with the newfound fame and your fans?'
'Doesn't it distract you from your work?'
Hi, Hashib! That's a good question. Nowadays, the lines are blurred.