1 00:00:10,040 --> 00:00:11,400 [suspenseful music playing] 2 00:00:16,200 --> 00:00:17,720 [intense music playing] 3 00:00:32,040 --> 00:00:33,440 [theme music playing] 4 00:00:51,160 --> 00:00:52,800 [music fades] 5 00:00:53,120 --> 00:00:54,360 - Hello, Sharks. - Hello. 6 00:00:54,560 --> 00:00:56,320 I am Mayank Pratap Sisodia. 7 00:01:02,280 --> 00:01:04,960 I hail from a small city in U.P. called Dhampur. 8 00:01:05,120 --> 00:01:08,240 I don't hold a degree from a premier institute, 9 00:01:08,560 --> 00:01:12,280 but I know what customers want, 10 00:01:12,440 --> 00:01:13,760 and that is honesty. 11 00:01:13,960 --> 00:01:17,400 My business and I function on this principle. 12 00:01:18,320 --> 00:01:20,880 I come from an agriculture-oriented family. 13 00:01:21,040 --> 00:01:22,640 We believe 14 00:01:22,760 --> 00:01:26,320 we should give back as much to the earth as it gives us. 15 00:01:26,800 --> 00:01:30,320 The products we use in our homes nowadays, 16 00:01:30,760 --> 00:01:32,760 such as dishwashing liquid, floor cleaners 17 00:01:32,840 --> 00:01:35,120 and even toilet paper and wrapping papers, 18 00:01:35,520 --> 00:01:41,360 come with free plastic bottles or plastic packaging! 19 00:01:42,280 --> 00:01:46,760 Sharks, I don't need to tell you how harmful plastic is to us. 20 00:01:47,880 --> 00:01:50,520 We bring you a solution to this problem 21 00:01:50,680 --> 00:01:51,920 and we are The Honest Home Company. 22 00:01:53,400 --> 00:01:57,480 We make plastic-free cleaning 23 00:02:00,840 --> 00:02:03,440 We don't cheat people in the name of sustainability 24 00:02:03,520 --> 00:02:04,920 and eco-friendly products. 25 00:02:06,240 --> 00:02:10,480 All our products are available in the market at competitive prices. 26 00:02:10,720 --> 00:02:13,800 Not only are our products sustainable 27 00:02:14,080 --> 00:02:16,240 but our company is too. 28 00:02:17,360 --> 00:02:20,560 That is how we went from an initial investment of Rs. 2.25 crores 29 00:02:20,640 --> 00:02:23,000 to an annual revenue of Rs. 14 crores. 30 00:02:23,320 --> 00:02:24,840 - Oh! - Well done. 31 00:02:28,000 --> 00:02:31,600 my ask is Rs. 1 crore for 2% equity. 32 00:02:44,040 --> 00:02:46,560 Yes, I studied there till the twelfth grade. 33 00:02:46,640 --> 00:02:47,480 What after that? 34 00:02:47,560 --> 00:02:50,280 I did my graduation from Punjab University 35 00:02:50,600 --> 00:02:53,760 followed by MBA in Lucknow from Jaipuria Institute of Management. 36 00:02:54,000 --> 00:02:57,680 After my MBA, my first job was with Parle Products Private Limited 37 00:02:57,760 --> 00:02:59,400 as a territory sales officer. 38 00:02:59,480 --> 00:03:04,120 Then I joined Hindustan Unilever where I worked for seven years. 39 00:03:04,200 --> 00:03:07,200 - Very good. - I was promoted thrice in those seven years 40 00:03:07,880 --> 00:03:11,040 after which I joined an ayurveda start-up 41 00:03:11,280 --> 00:03:12,720 - called Kapiva Ayurveda. - Okay. 42 00:03:12,800 --> 00:03:15,840 I helped expand their offline distribution in North India. 43 00:03:15,960 --> 00:03:16,960 Within a year, 44 00:03:17,040 --> 00:03:19,600 I took the monthly revenue from zero to Rs. 1 crore. 45 00:03:19,720 --> 00:03:21,120 Okay, well done. Okay. 46 00:03:21,200 --> 00:03:25,040 When I worked with Kapiva, I would get this a lot. 47 00:03:25,120 --> 00:03:29,160 "You sell products with organic and natural ingredients, 48 00:03:29,280 --> 00:03:31,240 but why market them in plastic bottles?" 49 00:03:31,360 --> 00:03:32,200 Secondly, 50 00:03:32,600 --> 00:03:36,480 the home and kitchen category is a fragmented market in India. 51 00:03:36,920 --> 00:03:39,920 The aim was to unite them and provide customers with a brand 52 00:03:40,160 --> 00:03:42,280 whose quality they could trust 53 00:03:42,400 --> 00:03:45,800 and purchase our products from the shops. 54 00:03:46,080 --> 00:03:50,120 So, at the end of 2019, I started The Honest Home Company. 55 00:03:50,240 --> 00:03:52,280 Is The Honest Home Company... 56 00:03:52,480 --> 00:03:55,480 - Was The Honest Company Jessica Alba's? - Yes, Jessica Alba. 57 00:03:55,600 --> 00:03:57,720 Were you inspired by that or was it something else? 58 00:03:58,600 --> 00:04:00,320 No, sir. I had no idea 59 00:04:00,400 --> 00:04:02,240 The Honest Company was owned by Jessica Alba. 60 00:04:02,320 --> 00:04:04,680 I found out after she sent me a notice. 61 00:04:04,800 --> 00:04:06,000 [Sharks laugh] 62 00:04:06,640 --> 00:04:08,320 - Did you win the case? - Yes. 63 00:04:08,400 --> 00:04:10,240 - Do you own the trademark in India? - You can keep your name. 64 00:04:10,360 --> 00:04:11,240 Yes. 65 00:04:12,400 --> 00:04:14,360 Let's take your facial tissues for instance. 66 00:04:14,440 --> 00:04:17,960 They are regular tissues in a box. What's special about them? 67 00:04:18,080 --> 00:04:19,760 Let me give you all the details first, sir. 68 00:04:19,880 --> 00:04:21,200 [Sharks laugh] 69 00:04:22,120 --> 00:04:23,200 You indeed are honest! 70 00:04:23,600 --> 00:04:26,720 Look, sir. We started with food wrapping paper, 71 00:04:26,800 --> 00:04:30,120 aluminium foil, kitchen towels and facial tissues. 72 00:04:30,520 --> 00:04:33,120 So, that generates our major revenue even today. 73 00:04:33,240 --> 00:04:35,600 Other than that, the household cleaners, 74 00:04:35,680 --> 00:04:36,960 such as toilet cleaners, 75 00:04:37,040 --> 00:04:38,560 floor cleaners or dishwashing liquids, 76 00:04:38,640 --> 00:04:40,560 - come in plastic bottles. - Yes. 77 00:04:40,760 --> 00:04:41,880 When one bottle empties, 78 00:04:41,960 --> 00:04:45,800 - you use the second after 15 days followed by the third. - True. 79 00:04:45,880 --> 00:04:48,560 - We end up piling plastic bottles at home. - Yes. 80 00:04:48,680 --> 00:04:50,560 This product is your solution. 81 00:04:52,080 --> 00:04:53,520 This is a 25 gram pouch. 82 00:04:53,600 --> 00:04:57,360 Take any old and empty 500 ml bottle of floor cleaner 83 00:04:57,440 --> 00:05:00,040 and pour the contents of this sachet in it... 84 00:05:00,760 --> 00:05:02,200 [water pours] 85 00:05:05,000 --> 00:05:07,800 Add water and voilà! Your floor cleaner is ready. 86 00:05:20,920 --> 00:05:22,080 [music playing] 87 00:05:31,360 --> 00:05:33,120 The packaging is wonderful. 88 00:05:33,280 --> 00:05:35,720 - Amazing. - Clean aesthetics and good vibes. It's great. 89 00:05:38,920 --> 00:05:40,640 - Coming to your floor cleaner. - Yes. 90 00:05:40,800 --> 00:05:43,480 - Is it organic and free of chemicals? - It contains chemicals. 91 00:05:43,560 --> 00:05:45,240 So, only your packaging... 92 00:05:45,360 --> 00:05:46,880 - I merely claim it is plastic-free. - Yes. 93 00:05:47,480 --> 00:05:49,400 His claim is not toxic-free, 94 00:05:49,520 --> 00:05:50,680 - it is plastic-free. - Tell us something. 95 00:05:50,760 --> 00:05:52,040 - Any... - She has got a point. 96 00:05:52,200 --> 00:05:53,560 You claim you're honest. 97 00:05:53,640 --> 00:05:55,240 That gives one the impression 98 00:05:55,400 --> 00:05:57,120 - everything is... - The ingredients are chemical-free. 99 00:05:57,240 --> 00:05:58,600 Which is good for him. 100 00:05:58,600 --> 00:06:00,360 He's making a profit. He's not making that claim. 101 00:06:01,000 --> 00:06:03,000 It says there, 'Good for you.' 102 00:06:03,720 --> 00:06:04,960 'Better for the planet.' 103 00:06:05,280 --> 00:06:06,520 That claim is right. 104 00:06:06,920 --> 00:06:09,160 But good for you? Maybe not. 105 00:06:09,600 --> 00:06:11,600 Sir, the customer also looks at affordability. 106 00:06:11,720 --> 00:06:14,680 Alright. You've gone with a grey area there. 107 00:06:15,800 --> 00:06:17,160 Are you selling offline or online? 108 00:06:17,280 --> 00:06:19,360 Your background seems to include offline. 109 00:06:19,560 --> 00:06:21,720 - I started with offline. - Okay. 110 00:06:21,800 --> 00:06:24,040 My sales split last year 111 00:06:24,120 --> 00:06:27,160 was 55% via offline channels and 45% via online channels. 112 00:06:27,360 --> 00:06:29,920 This year, for the six months that have passed, 113 00:06:30,080 --> 00:06:32,640 I've generated 40% revenue offline. 114 00:06:32,720 --> 00:06:35,120 24% through marketplaces 115 00:06:35,280 --> 00:06:37,680 - and 30% through quick commerce. - Quick commerce. 116 00:06:37,680 --> 00:06:38,640 Very good. 117 00:06:38,760 --> 00:06:40,160 Is the remaining 6% by yourself? 118 00:06:40,240 --> 00:06:42,320 No, sir. The remaining 6% 119 00:06:42,480 --> 00:06:44,800 comes from small sellers. 120 00:06:44,880 --> 00:06:46,240 None on your own? 121 00:06:46,320 --> 00:06:48,560 I have my own website but I don't sell there. 122 00:06:48,640 --> 00:06:50,880 - Do you not try or... - I don't try. 123 00:06:51,000 --> 00:06:52,840 - Smart. - Why not? 124 00:06:53,000 --> 00:06:56,280 Sir, my average order value is Rs. 200. 125 00:06:56,360 --> 00:07:00,720 The nationwide shipping cost from Sonipat per order is Rs. 150. 126 00:07:00,800 --> 00:07:01,920 - Okay. - It leaves me with nothing. 127 00:07:02,800 --> 00:07:05,360 You only sold goods offline. 128 00:07:11,080 --> 00:07:15,000 Ma'am, we were all jobless for six months during the pandemic. 129 00:07:15,080 --> 00:07:18,000 Before that, I had reached a monthly revenue of Rs. 25 lakhs. 130 00:07:18,080 --> 00:07:20,160 I had a coverage of 1100 outlets in Delhi. 131 00:07:20,320 --> 00:07:23,240 I knew which shops to sell my products to. 132 00:07:23,360 --> 00:07:25,560 There were no sales for six months because of Covid. 133 00:07:25,640 --> 00:07:27,760 I realised I was doing something wrong. 134 00:07:27,880 --> 00:07:31,120 Offline sales alone will not sustain a business. 135 00:07:31,200 --> 00:07:33,480 You have to adapt to new trends. 136 00:07:33,640 --> 00:07:36,240 So, I started listing goods online gradually 137 00:07:36,400 --> 00:07:37,440 but didn't get orders. 138 00:07:37,600 --> 00:07:41,040 I asked my friends and colleagues about their approach. 139 00:07:41,240 --> 00:07:44,760 They told me they had registered for GST with multiple states. 140 00:07:55,920 --> 00:07:57,320 in the initial days. 141 00:07:57,560 --> 00:08:00,520 For example, we sold food wrapping paper 142 00:08:00,520 --> 00:08:02,040 below the cost price during the initial days. 143 00:08:02,240 --> 00:08:03,440 People bought them. 144 00:08:03,560 --> 00:08:05,000 The quality of the product is good. 145 00:08:05,120 --> 00:08:06,400 One product sold 146 00:08:06,400 --> 00:08:09,160 and along with it, my other products began selling too. 147 00:08:17,400 --> 00:08:18,640 Mine is 16%. 148 00:08:19,640 --> 00:08:23,200 - Last year's turnover was Rs. 13.8 crores. - Wow! 149 00:08:23,280 --> 00:08:25,520 The first year's revenue was Rs. 1.82 crores, 150 00:08:25,640 --> 00:08:27,200 the second year's was Rs. 2.89 crores, 151 00:08:27,320 --> 00:08:28,640 the third year's was Rs. 4.9 crores 152 00:08:28,720 --> 00:08:30,520 and fourth's was Rs. 13.8 crores. 153 00:08:31,720 --> 00:08:32,880 And last month's? 154 00:08:33,000 --> 00:08:35,280 Last month's sales were Rs. 1.42 crores. 155 00:08:35,560 --> 00:08:36,920 - Lovely. - He is doing well. 156 00:08:37,040 --> 00:08:38,800 - Tell us your margin structure. - Did you make a profit? 157 00:08:38,880 --> 00:08:40,720 This is a highly commoditised market. 158 00:08:46,040 --> 00:08:50,320 His margin is 8%. 8% is my logistics cost. 159 00:08:50,440 --> 00:08:53,840 - We spend 15% on visibility. - Branding. 160 00:08:53,960 --> 00:08:56,320 I am left with about 24%. 161 00:08:57,800 --> 00:08:59,680 Coming to online sales of food wrapping paper. 162 00:08:59,760 --> 00:09:01,520 The selling price to the consumer is Rs. 200. 163 00:09:01,840 --> 00:09:03,680 My cost comes to around Rs. 56 to 60 164 00:09:03,760 --> 00:09:06,720 making my gross margin anywhere between 70 to 72%. 165 00:09:06,800 --> 00:09:08,920 Amazon's commission is 18% 166 00:09:22,640 --> 00:09:24,000 - Yes, I did. - How much? 167 00:09:24,720 --> 00:09:27,160 Sir, the net profit was around Rs. 60 lakhs. 168 00:09:40,000 --> 00:09:41,880 Sir, marketing has to be done. 169 00:09:42,000 --> 00:09:44,800 I'm a step behind 170 00:09:44,920 --> 00:09:47,480 because I'm unable to meet the customers' demands. 171 00:09:47,560 --> 00:09:49,120 - I'm out of stock. - Stock deficit. 172 00:09:49,200 --> 00:09:50,040 - That's right. - Hang on. 173 00:09:50,120 --> 00:09:51,960 How much working capital do you need? 174 00:09:52,040 --> 00:09:54,800 I need a working capital of Rs. 1 to 1.5 crores currently. 175 00:09:54,960 --> 00:09:56,720 That's a working capital equal to one month's sale. 176 00:09:56,800 --> 00:09:59,320 - Yes. - Your sale is Rs. 1.4 crores and so is the working capital. 177 00:09:59,480 --> 00:10:00,640 I don't get it. 178 00:10:00,800 --> 00:10:03,200 You're being honest and claiming everything is great. 179 00:10:08,200 --> 00:10:09,840 Sir, the products are so simple. 180 00:10:09,920 --> 00:10:11,720 There's no scope for any catch. 181 00:10:12,160 --> 00:10:13,200 I don't want a debt. 182 00:10:13,280 --> 00:10:15,840 - My only concern is... - There is no debt. Let me finish. 183 00:10:15,920 --> 00:10:18,120 I had a job before the pandemic. 184 00:10:18,200 --> 00:10:21,440 I had two loans, a home loan and a car loan. 185 00:10:21,640 --> 00:10:25,720 I couldn't pay my EMIs for a few months after Covid. 186 00:10:25,840 --> 00:10:27,640 - Okay. - I have a high... 187 00:10:27,760 --> 00:10:29,880 My current CIBIL score is above 700 now. 188 00:10:29,960 --> 00:10:31,680 I had a high DPD back then. 189 00:10:31,880 --> 00:10:35,000 So, if I try to avail a collateral-free loan, 190 00:10:35,120 --> 00:10:38,840 I am refused a loan when lenders get to this point. 191 00:10:38,920 --> 00:10:41,440 You said you raised Rs. 2 crores. 192 00:10:41,800 --> 00:10:45,520 I invested a total of Rs. 2.25 crores in my business 193 00:10:45,600 --> 00:10:47,520 and set up a factory 194 00:10:47,640 --> 00:10:49,480 out of which Rs. 1.25 crores belongs to me 195 00:10:49,600 --> 00:10:51,520 and the remaining Rs. 1 crore to three of my friends. 196 00:10:51,600 --> 00:10:54,760 How much equity did you give them for that Rs. 1 crore? 197 00:10:54,840 --> 00:10:57,560 I own 80% of the company 198 00:10:57,640 --> 00:10:59,480 and 20% is divided among those three friends. 199 00:11:01,720 --> 00:11:06,720 I don't think this will scale just based on the packaging moat, 200 00:11:12,000 --> 00:11:13,680 I don't think it's for an investor 201 00:11:13,760 --> 00:11:16,280 because an exit without scale seems difficult. 202 00:11:16,360 --> 00:11:17,480 I'm out for today. 203 00:11:17,840 --> 00:11:18,880 Wish you the best. 204 00:11:19,040 --> 00:11:19,880 Thank you, ma'am. 205 00:11:21,320 --> 00:11:22,960 - Tell me something, Mayank. - Yes. 206 00:11:24,880 --> 00:11:25,840 Around 80. 207 00:11:29,520 --> 00:11:32,760 - The first feedback was this is a highly commoditised market. - Yes. 208 00:11:32,840 --> 00:11:35,880 The second is, "You're not good at online sales. 209 00:11:36,080 --> 00:11:38,600 You're into sales. How will you build a brand?" 210 00:11:38,720 --> 00:11:41,640 They said, "Get one... You're a single founder. 211 00:11:41,720 --> 00:11:43,480 Bring a co-founder on board 212 00:11:43,480 --> 00:11:45,520 who is from a premium institute 213 00:11:45,600 --> 00:11:47,040 - and has knowledge of marketing." - Got it. 214 00:11:47,120 --> 00:11:49,560 VCs want to fit you into a template 215 00:11:49,640 --> 00:11:53,240 - and if you do not, they disapprove. - Yes. 216 00:11:53,480 --> 00:11:55,600 - I got it. - The opposite is advised to D2C companies. 217 00:11:59,440 --> 00:12:01,280 - I've understood your industry. - Okay. 218 00:12:04,720 --> 00:12:08,760 What will your scale and profit be in the next three years 219 00:12:08,840 --> 00:12:10,120 and how will you achieve it? 220 00:12:10,200 --> 00:12:12,800 - Sir, I could tell you about the next two years. - Sure. 221 00:12:12,920 --> 00:12:15,240 - No problem. - My projected monthly sales 222 00:12:37,400 --> 00:12:38,800 As for the rest, 223 00:12:55,240 --> 00:12:57,680 Blinkit has a strong presence in North India, 224 00:12:57,760 --> 00:13:00,640 not in the West or South as far as I know. 225 00:13:00,720 --> 00:13:02,640 Okay. What is your burn right now? 226 00:13:02,720 --> 00:13:04,280 Your overhead costs will increase. 227 00:13:04,360 --> 00:13:06,240 - You'll need a leadership team. - Yes. 228 00:13:06,320 --> 00:13:09,480 How much will you raise and what will your burn per month be? 229 00:13:10,760 --> 00:13:14,320 Sir, I need to raise Rs. 8 crores if I want to get to Rs. 100 crores. 230 00:13:14,400 --> 00:13:15,680 That will be working capital. 231 00:13:15,760 --> 00:13:19,400 - I need it for working capital. - Your margin is about 4% 232 00:13:19,480 --> 00:13:20,760 without these costs. 233 00:13:20,880 --> 00:13:22,160 - So, the margin... - Sir, the net profit... Yes. 234 00:13:22,240 --> 00:13:25,200 You agree you need a leadership team and branding. 235 00:13:25,400 --> 00:13:27,280 - That margin will pay for the cost. - Hmm. 236 00:13:27,360 --> 00:13:29,240 That will only happen with margin expansion. 237 00:13:29,320 --> 00:13:30,760 - I... - Margin expansion isn't possible. 238 00:13:30,880 --> 00:13:32,280 - It is, sir. - Okay. 239 00:13:32,280 --> 00:13:35,920 - I agree you could go from 4% to 6%. - Okay. 240 00:13:36,000 --> 00:13:38,240 Right, but you're still at a very low level. 241 00:13:38,440 --> 00:13:40,600 How will you afford the branding and a leadership team? 242 00:13:41,200 --> 00:13:42,680 Or you haven't thought about that? 243 00:13:43,360 --> 00:13:46,080 Okay, your business is doing well. 244 00:13:46,160 --> 00:13:47,720 I don't know if it will be bigger, 245 00:13:47,800 --> 00:13:49,640 but your execution so far is amazing. 246 00:13:49,720 --> 00:13:52,200 We'll take a bet and make you an offer. 247 00:13:53,360 --> 00:13:55,160 Rs. 1 crore for 4% equity 248 00:13:55,840 --> 00:13:59,200 and 1% royalty on sales 249 00:14:31,000 --> 00:14:32,200 - Okay. - I'll match Vineeta's offer. 250 00:14:39,920 --> 00:14:42,000 I was rejected by over 100 VCs. 251 00:14:42,080 --> 00:14:43,200 - Amazing! - I love people 252 00:14:43,280 --> 00:14:45,960 who are willing to face rejection 80 times over. 253 00:14:46,080 --> 00:14:46,920 Amazing. 254 00:14:47,080 --> 00:14:48,560 What do you want, my friend? 255 00:14:48,640 --> 00:14:50,800 Do you not wish to give royalty 256 00:14:51,160 --> 00:14:52,640 or wish to give less equity? 257 00:14:53,200 --> 00:14:55,480 I want to give less equity. 258 00:14:55,560 --> 00:14:59,040 Don't forget you raised Rs. 1 crore for 20% equity. 259 00:15:00,480 --> 00:15:02,480 Sir, the company hadn't even started then. 260 00:15:02,560 --> 00:15:04,160 They've been with me since day one. 261 00:15:04,240 --> 00:15:06,720 - They are invaluable. - Amazing. 262 00:15:08,000 --> 00:15:10,520 Okay. I'll offer you Rs. 1 crore for 3% 263 00:15:20,920 --> 00:15:21,960 I'll match Anupam's offer. 264 00:15:35,280 --> 00:15:36,200 [chuckles] 265 00:15:36,320 --> 00:15:40,120 All the reasons Vineeta gave to invest in you, and plus one. 266 00:15:42,000 --> 00:15:44,320 All the reasons Amit gave has a plus one too, 267 00:15:44,400 --> 00:15:45,360 for the same reasons. 268 00:15:47,600 --> 00:15:49,240 I will make you an offer. 269 00:15:49,560 --> 00:15:51,240 Anupam's offer plus one. 270 00:15:58,800 --> 00:16:00,280 [pensive music playing] 271 00:16:02,000 --> 00:16:04,320 - There is one offer, we could try. - Okay. 272 00:16:06,520 --> 00:16:09,680 - Rs. 2 crore which addresses your problem of working capital. - Yes. 273 00:16:09,960 --> 00:16:12,760 No other VC will reject you. 274 00:16:12,880 --> 00:16:14,720 We won't let them in, right? 275 00:16:14,800 --> 00:16:18,560 Rs. 50 lakhs each. Rs. 2 crores for 8%. 276 00:16:19,040 --> 00:16:20,120 [gripping music playing] 277 00:16:21,960 --> 00:16:24,560 We'll keep the royalty as agreed. 278 00:16:24,960 --> 00:16:27,040 When our investment reaches 2x, the royalty goes away. 279 00:16:27,320 --> 00:16:29,120 That's our offer if they all agree. 280 00:16:29,200 --> 00:16:30,640 I still wish to go solo. 281 00:16:31,040 --> 00:16:32,440 [gripping music playing] 282 00:16:32,920 --> 00:16:34,560 Okay, let him go solo. 283 00:16:34,680 --> 00:16:37,840 - The rest of us will make the offer. - Yes? 284 00:16:56,000 --> 00:16:57,480 It's simple. There are three of them. 285 00:16:57,480 --> 00:17:00,000 One investor is more likely to give you more attention. 286 00:17:00,200 --> 00:17:03,120 In the last season, I devoted hours to the companies I invested in. 287 00:17:04,520 --> 00:17:06,760 Do you want more time or growth? 288 00:17:06,840 --> 00:17:09,720 - Look at whose companies grew. - All my companies grew. 289 00:17:09,800 --> 00:17:12,040 - At one point, they were... - Ours grew too. 290 00:17:14,880 --> 00:17:16,640 Does your offer include royalty? 291 00:17:16,720 --> 00:17:18,880 They asked for royalty until Rs. 2 crores is recouped, 292 00:17:34,800 --> 00:17:37,120 - "Could everyone come on board?" - So sweet! 293 00:17:48,880 --> 00:17:51,240 So, Mayank, what have you decided? 294 00:17:53,640 --> 00:17:55,480 [dramatic music playing] 295 00:18:01,320 --> 00:18:02,360 Amit, it's a deal. 296 00:18:12,440 --> 00:18:15,120 I can talk until he reaches there. 297 00:18:15,560 --> 00:18:16,360 Congratulations! 298 00:18:16,440 --> 00:18:18,600 - Well done, Amit! - It was fun. You are such a good founder. 299 00:18:21,520 --> 00:18:22,800 [photo clicking] 300 00:18:23,360 --> 00:18:24,440 A good one. 301 00:18:24,680 --> 00:18:25,600 A pathetic one. 302 00:18:33,800 --> 00:18:35,560 - Awesome! - Woo-hoo! 303 00:18:35,640 --> 00:18:36,840 [Amit laughing] 304 00:18:36,960 --> 00:18:39,200 - Well done! - Good. Your last attempt was nice. 305 00:18:39,360 --> 00:18:40,360 - Yes. - Punch. 306 00:18:41,360 --> 00:18:42,680 He will earn a profit for you. 307 00:18:42,760 --> 00:18:44,640 I know. 308 00:18:52,560 --> 00:18:53,800 Do you know what is royalty? 309 00:18:54,880 --> 00:18:56,280 Let's ask the Sharks. 310 00:18:56,360 --> 00:18:57,880 A royalty deal can be explained like this. 311 00:18:57,960 --> 00:19:00,080 When we approach an investor, 312 00:19:08,560 --> 00:19:10,840 He demands to take 10% equity 313 00:19:10,920 --> 00:19:15,560 and also, a 5% royalty on sales. Right? 314 00:19:23,080 --> 00:19:27,480 The investor could put a condition that they'll take a royalty 315 00:19:42,600 --> 00:19:45,560 Royalty helps keep an investor's money safe. 316 00:19:45,640 --> 00:19:47,120 The money is safe 317 00:19:47,200 --> 00:19:48,960 because they recover their money. 318 00:19:49,040 --> 00:19:51,440 A bottom line royalty is good for the Shark 319 00:19:51,600 --> 00:19:54,720 because it helps recover our money 320 00:19:54,800 --> 00:19:57,000 in a quicker time. 321 00:19:57,120 --> 00:19:58,720 It's beneficial for the founder 322 00:20:05,880 --> 00:20:09,000 Many businesses which come here 323 00:20:09,120 --> 00:20:11,720 have 10% to 15% profit. 324 00:20:11,800 --> 00:20:16,800 The royalty deals are generally in the range of 1% to 2%. 325 00:20:17,040 --> 00:20:20,040 If an investor is coming on board 326 00:20:20,120 --> 00:20:23,600 who can help a business grow 2x to 3x 327 00:20:23,680 --> 00:20:26,880 and the profit in the range of 10% to 15% 328 00:20:26,880 --> 00:20:30,760 falls to 13%, it won't make much of a difference to the cash flow. 329 00:23:08,520 --> 00:23:11,040 [theme music playing] 330 00:23:15,960 --> 00:23:19,640 [theme music intensifies] 331 00:23:36,240 --> 00:23:39,840 "Those whose dreams are well-founded accomplish them." 332 00:23:40,120 --> 00:23:44,160 - "Wings don't help, our willpower helps us soar." - Well said. 333 00:23:44,280 --> 00:23:47,640 - Nice. - It isn't just a couplet, it's the truth of my life. 334 00:23:48,320 --> 00:23:50,040 I had asthma since childhood 335 00:23:50,160 --> 00:23:53,960 due to which I dropped out of school after the fifth grade. 336 00:23:54,480 --> 00:23:58,720 There's a saying, "life teaches us every moment." 337 00:23:58,840 --> 00:24:01,120 "We must have the desire to learn." 338 00:24:01,200 --> 00:24:03,160 So I became life's student. 339 00:24:12,760 --> 00:24:14,320 The knowledge of business, 340 00:24:14,520 --> 00:24:18,200 identifying scent and facing difficulties head-on. 341 00:24:18,280 --> 00:24:20,160 - Wonderful. - Well said. 342 00:24:20,240 --> 00:24:23,520 I'm introducing my brand Adilqadri to all of you today. 343 00:24:25,160 --> 00:24:28,440 Sharks, people have forgotten about attars 344 00:24:28,640 --> 00:24:30,520 in the age of perfumes and deodorants. 345 00:24:30,600 --> 00:24:33,160 The attars we make are long-lasting, 346 00:24:49,080 --> 00:24:51,040 We have processed more than 10 lakh orders till now. 347 00:24:51,680 --> 00:24:56,800 Our retail outlets are present in Mumbai, Gujarat and even Dubai. 348 00:24:56,920 --> 00:25:01,480 Our vision is to make the Indian attar, Adilqadri 349 00:25:01,560 --> 00:25:04,720 a part of the world's biggest international perfume brands. 350 00:25:04,800 --> 00:25:08,000 It isn't just an endeavour but our resolve. 351 00:25:08,120 --> 00:25:13,160 To fulfil this resolve, I ask for Rs. 1 crore for 0.5% equity. 352 00:25:18,160 --> 00:25:20,080 "Every industry has a ruler." 353 00:25:20,160 --> 00:25:23,400 And, I, Adil Qadri am the ruler of this industry. 354 00:25:23,480 --> 00:25:26,080 [chuckling] 355 00:25:28,160 --> 00:25:30,920 - Adil, welcome to Shark Tank India Season 3. - Thank you! 356 00:25:38,280 --> 00:25:40,440 You said you dropped out in the fifth grade. 357 00:25:40,560 --> 00:25:42,880 Please give us the context. How did you enter this business? 358 00:25:42,960 --> 00:25:45,720 And how difficult it is to start a business in a small city. 359 00:25:45,800 --> 00:25:48,320 I dropped out of the school around 2005. 360 00:25:48,400 --> 00:25:51,120 From 2005 to 2012, 361 00:25:51,200 --> 00:25:55,240 I did multiple courses and learned some skills. 362 00:25:55,920 --> 00:26:01,720 One gentleman told me about SEO in 2014. 363 00:26:06,600 --> 00:26:07,800 That's good. 364 00:26:25,080 --> 00:26:28,080 We launched many D2C websites 365 00:26:28,160 --> 00:26:31,480 between 2014 and 2018. 366 00:26:31,600 --> 00:26:34,280 I did drop shipping, affiliate marketing 367 00:26:34,360 --> 00:26:37,240 and many other things but nothing worked for me. 368 00:26:37,840 --> 00:26:38,960 Then I remembered 369 00:26:39,240 --> 00:26:44,320 that my father has been working in an attar shop for 20-25 years. 370 00:26:44,400 --> 00:26:46,960 I came to know about some drawbacks. 371 00:26:47,040 --> 00:26:51,000 The bottles that were sold couldn't be gifted. 372 00:26:51,080 --> 00:26:54,360 Also, when there was a repeat customer, 373 00:26:54,440 --> 00:26:57,080 they couldn't get the same fragrance and there were inconsistencies. 374 00:26:57,160 --> 00:27:00,800 These problems paved the way for the launch of Adilqadri Perfumes. 375 00:27:02,200 --> 00:27:04,560 - Can we try your perfumes? - Yes. 376 00:27:06,640 --> 00:27:09,520 [ethereal music playing] 377 00:27:13,240 --> 00:27:15,760 Oh, man! Very strong! 378 00:27:18,840 --> 00:27:20,360 Is it known as attar or ittar? 379 00:27:20,440 --> 00:27:21,720 Sir, I'm an SEO expert. 380 00:27:21,960 --> 00:27:24,040 "Attar" has the highest search, so I call them attar. 381 00:27:25,280 --> 00:27:26,680 - Good answer! - Good answer! 382 00:27:27,000 --> 00:27:30,480 Do you have modern and lighter versions too? 383 00:27:30,600 --> 00:27:33,120 Or do you want to focus on these fragrances? 384 00:27:33,200 --> 00:27:37,160 None of these perfumes are traditional. 385 00:27:37,240 --> 00:27:40,160 These are modern fragrances. 386 00:27:40,360 --> 00:27:42,240 We are popular in India due to our attars. 387 00:27:42,360 --> 00:27:43,920 We also launched our perfume range. 388 00:27:47,480 --> 00:27:48,760 - What is the percentage? - 95%. 389 00:27:53,120 --> 00:27:54,960 It's around 3.8. 390 00:27:55,040 --> 00:27:57,920 Are you the number one seller with a 3.8 rating? 391 00:27:58,000 --> 00:28:02,680 Our brand Adilqadri kickstarted the attar category. 392 00:28:02,920 --> 00:28:04,760 This category didn't have much sales on Amazon. 393 00:28:26,560 --> 00:28:29,280 Can you tell us the size of the market currently? 394 00:28:29,400 --> 00:28:31,640 And also, whether it is growing or declining? 395 00:28:31,720 --> 00:28:32,960 It's around Rs. 2,000 crores. 396 00:28:33,080 --> 00:28:34,920 Rs. 2,000 crores for just attars? 397 00:28:35,040 --> 00:28:36,800 It's the size of the whole fragrance market. 398 00:28:36,880 --> 00:28:39,240 - No. - The market for just deodorants is Rs. 5,000 crores vast. 399 00:28:40,640 --> 00:28:42,240 I'm telling you about the online perfume market. 400 00:28:47,320 --> 00:28:49,120 The perfume market is also around Rs. 4,000-Rs. 5,000 crores. 401 00:28:49,200 --> 00:28:52,000 The total market is around Rs. 10,000 crores. 402 00:28:52,080 --> 00:28:53,920 - The online market plus the offline market. - Totally. 403 00:28:54,080 --> 00:28:55,520 You said Rs. 2,000 crores. 404 00:28:55,600 --> 00:28:57,560 What is the market share of attar? 405 00:28:57,640 --> 00:28:59,720 - Sir, I couldn't find it. - So you don't have an idea. 406 00:28:59,800 --> 00:29:01,960 - No. - It could be around 10% to 20%. Around Rs. 300 crores? 407 00:29:02,040 --> 00:29:03,280 Yes. 408 00:29:03,840 --> 00:29:06,040 Can you show us your website, Facebook or Instagram? 409 00:29:06,120 --> 00:29:07,760 I have two Instagram profiles. 410 00:29:08,280 --> 00:29:09,760 I run ads on both profiles. 411 00:29:09,840 --> 00:29:13,480 On one profile, I make videos in which I star. 412 00:29:13,600 --> 00:29:14,440 - Very nice. - Good. 413 00:29:14,520 --> 00:29:15,720 For example, adilqadri_perfumes. 414 00:29:15,800 --> 00:29:17,360 - You have 62,000 followers. - Yes. 415 00:29:17,640 --> 00:29:19,640 We have maintained the aesthetics 416 00:29:23,760 --> 00:29:24,720 Good job. 417 00:29:25,040 --> 00:29:26,320 Please show us your personal profile. 418 00:29:27,560 --> 00:29:28,560 This is my personal profile. 419 00:29:28,680 --> 00:29:29,960 It has more followers. 420 00:29:30,040 --> 00:29:32,320 Most of the ad videos are mine. 421 00:29:32,560 --> 00:29:34,560 Do you boost these ads? I mean paid marketing. 422 00:29:34,640 --> 00:29:37,320 - Yes. I do paid marketing. - So you are the influencer of your brand. 423 00:29:37,400 --> 00:29:38,800 Yes. I'm the brand's face. 424 00:29:38,920 --> 00:29:40,560 Let me tell you the current situation. 425 00:29:40,640 --> 00:29:43,320 We hired celebrities 426 00:29:43,520 --> 00:29:45,920 and influencers for our ads 427 00:29:49,080 --> 00:29:50,280 - Amazing! - It shows authenticity. 428 00:29:50,360 --> 00:29:51,880 People find me relatable. 429 00:29:52,000 --> 00:29:53,200 It gives your product a kind of authenticity. 430 00:29:53,280 --> 00:29:55,880 Please tell us the secret of Rs. 300 crores valuation. 431 00:29:55,880 --> 00:29:57,120 What are your sales figures? 432 00:29:58,480 --> 00:29:59,960 The valuation isn't Rs. 300 crores. 433 00:30:00,040 --> 00:30:02,640 - Namita, have you become weak in maths? - Sorry! Hold on! 434 00:30:02,720 --> 00:30:04,520 What percentage did you ask? 435 00:30:04,600 --> 00:30:06,520 Rs. 1 crore for 0.5% equity. 436 00:30:06,600 --> 00:30:09,200 - Oh, Rs. 1 crore. I wrote Rs. 1.5 crores. - [smirking] 437 00:30:09,360 --> 00:30:13,800 Rs. 200 crore valuation isn't small for perfumes. 438 00:30:13,960 --> 00:30:16,040 Please tell us the secret. What are your sales figures? 439 00:30:16,200 --> 00:30:19,880 - Last month, we earned Rs. 6 crores. - Whoa! 440 00:30:20,160 --> 00:30:22,000 - Lovely! - Very nice. 441 00:30:22,120 --> 00:30:24,640 And 95% of your customers are men! 442 00:30:25,920 --> 00:30:27,600 I'll be your customer. 443 00:30:28,520 --> 00:30:30,800 Ma'am, I did the valuation 444 00:30:30,960 --> 00:30:33,640 according to the ARR. 445 00:30:33,960 --> 00:30:37,120 We will earn Rs. 80 crores to Rs. 90 crores this year. 446 00:30:37,800 --> 00:30:39,760 Primarily, is it online? Or both online and offline? 447 00:30:39,840 --> 00:30:42,080 - Primarily, it's online. - All right. 448 00:30:42,160 --> 00:30:43,400 What percentage of this is online revenue? 449 00:30:43,480 --> 00:30:44,600 95%. 450 00:30:44,680 --> 00:30:46,480 What is your average selling price? 451 00:30:46,640 --> 00:30:48,680 - Our AOV is Rs. 800. - Rs. 800. 452 00:30:48,760 --> 00:30:51,440 Please tell us your revenue and profit for the last three years. 453 00:30:51,520 --> 00:30:56,560 - During FY20-21, our revenue was Rs. 5.3 crores. - Okay. 454 00:30:56,640 --> 00:30:59,040 With 3.5% EBITDA. 455 00:31:19,520 --> 00:31:20,840 We are also burning cash. 456 00:31:20,960 --> 00:31:22,080 What is the cash burn rate? 457 00:31:22,160 --> 00:31:24,560 The burn rate is around 5%. 458 00:31:25,440 --> 00:31:26,720 What is the cause of the burn? 459 00:31:29,560 --> 00:31:31,240 Earlier, we had a limited stock. 460 00:31:31,560 --> 00:31:33,760 Now, we have launched perfumes too. 461 00:31:33,840 --> 00:31:35,880 - So the market is larger now. - Did you raise money? 462 00:31:36,120 --> 00:31:37,400 No. We took debt. 463 00:31:37,480 --> 00:31:38,760 Ooh! I thought so. 464 00:31:39,440 --> 00:31:40,960 Can you tell us the economics? 465 00:31:41,040 --> 00:31:42,960 The gross margin is 70%. 466 00:31:43,120 --> 00:31:48,440 - Our ad cost is 40% and the shipping cost is 14%. - Hmm. 467 00:31:48,680 --> 00:31:50,480 The operational cost is 20%. 468 00:31:50,600 --> 00:31:51,880 Though you are smart, 469 00:31:54,920 --> 00:31:57,200 - It's too high. - Ma'am, it happens during scaling. 470 00:31:57,680 --> 00:32:01,280 Your goal is to make it a brand so that people buy organically. 471 00:32:01,960 --> 00:32:05,080 Otherwise, what's the use of burning cash on performance marketing? 472 00:32:05,440 --> 00:32:08,080 - Right. - Adil, what is your debt amount? 473 00:32:08,200 --> 00:32:12,680 We took a debt of around Rs. 2 crores from a company 474 00:32:12,840 --> 00:32:14,440 and Rs. 4 crores from another company. 475 00:32:14,560 --> 00:32:16,120 [tense music plays] 476 00:32:16,640 --> 00:32:19,240 - What kind of companies are these? NBFC companies? - Yes. 477 00:32:21,400 --> 00:32:24,200 If you don't get funding here, 478 00:32:24,280 --> 00:32:26,040 how will you repay after six months? 479 00:32:26,120 --> 00:32:28,120 Your yearly loss is Rs. 6 crores. 480 00:32:28,520 --> 00:32:30,520 - You'd need money for the working capital also. - Yes. 481 00:32:30,800 --> 00:32:32,720 We have a plan. 482 00:32:32,800 --> 00:32:35,840 We'll take a debt again as we have to pay the suppliers. 483 00:32:35,960 --> 00:32:38,400 We are also planning 484 00:32:38,560 --> 00:32:41,520 to approach a government bank for capital. 485 00:32:41,600 --> 00:32:43,600 You should have approached them when you were profiting. 486 00:32:43,680 --> 00:32:45,640 A government bank won't give you money if you are in debt. 487 00:32:45,720 --> 00:32:46,640 Correct. 488 00:32:46,840 --> 00:32:49,080 We haven't tried it yet. It's a plan. 489 00:32:49,160 --> 00:32:50,440 We'll know when we approach them. 490 00:32:50,520 --> 00:32:53,480 Basically, you mean that you'd pay off a debt with the other debt. 491 00:32:53,600 --> 00:32:56,640 - Yes. - You are talking about profit. Right? 492 00:32:56,800 --> 00:32:59,600 Is it the profit after paying off the interest? 493 00:32:59,760 --> 00:33:01,560 - It's PAT, Profit After Tax. Right? - It's PBT. 494 00:33:01,680 --> 00:33:03,400 No, EBITDA is 1.5%. 495 00:33:03,800 --> 00:33:05,160 - Oh! - So it's EBITDA. 496 00:33:05,240 --> 00:33:06,560 Then you are in the soup. 497 00:33:07,920 --> 00:33:10,880 If your loss is 5% before paying interest, 498 00:33:11,560 --> 00:33:14,040 it means you lost Rs. 4.5 crores. 499 00:33:15,080 --> 00:33:16,960 You have a loan of Rs. 6 crores. 500 00:33:17,040 --> 00:33:19,560 Suppose, the interest rate is 12%. 501 00:33:20,200 --> 00:33:24,640 The total interest per year will be Rs. 72 lakhs. 502 00:33:25,320 --> 00:33:27,480 You must earn, approximately, Rs. 5.5 crores. 503 00:33:27,720 --> 00:33:30,240 How will you earn that sum? 504 00:33:30,320 --> 00:33:31,880 Our sellers are working on credit. 505 00:33:32,040 --> 00:33:35,720 Though you are slogging, your company is at stake. 506 00:33:38,040 --> 00:33:39,960 Adil, let me tell you a rule of thumb. 507 00:33:40,080 --> 00:33:42,560 A business with a gross margin of 70% 508 00:33:42,680 --> 00:33:44,680 should be operated in loss 509 00:33:44,760 --> 00:33:46,840 only if one has a runway of at least 24 months. 510 00:33:46,960 --> 00:33:48,640 We must have money in the bank. 511 00:33:48,760 --> 00:33:51,280 Otherwise, you must run the business at a 20% margin. 512 00:34:15,840 --> 00:34:18,200 With your current margin structure 513 00:34:18,520 --> 00:34:23,400 and due to your hefty loan, I won't be able to collaborate with you. 514 00:34:24,880 --> 00:34:27,800 Earlier, you said you are the goon of this industry. 515 00:34:28,120 --> 00:34:29,520 A goon gets jailed. 516 00:34:30,360 --> 00:34:31,440 Okay? 517 00:34:31,800 --> 00:34:33,360 You want to be the emperor. 518 00:34:34,480 --> 00:34:36,760 So you must do a long-term planning. 519 00:34:43,080 --> 00:34:44,520 Then you will get an independent business. 520 00:34:44,600 --> 00:34:46,280 Only then you can be an emperor. Good luck to you. 521 00:34:46,360 --> 00:34:47,160 Thank you! 522 00:34:47,240 --> 00:34:48,400 I can be your customer 523 00:34:48,480 --> 00:34:50,480 but I can't be your investor at present. 524 00:34:51,400 --> 00:34:54,120 I have two issues with your business. One is the margin issue. 525 00:34:54,480 --> 00:34:57,600 Secondly, when the mass market brands 526 00:34:57,720 --> 00:35:00,360 observe the market increase, 527 00:35:00,480 --> 00:35:03,360 it will bring about an OUD effect. 528 00:35:03,520 --> 00:35:06,360 The market will become more competitive for you. So I'm out. 529 00:35:13,680 --> 00:35:15,680 I'm fond of perfumes 530 00:35:15,760 --> 00:35:19,160 but it's too strong for me. 531 00:35:19,400 --> 00:35:23,480 Personally, I don't like Attar as a category. 532 00:35:23,640 --> 00:35:25,360 For that reason, I'm out. 533 00:35:25,880 --> 00:35:26,720 I'm out. 534 00:35:26,800 --> 00:35:29,400 The simple reason is if I saw an increase in organic sales 535 00:35:29,480 --> 00:35:31,840 or an increase in profit, I would have been interested. 536 00:35:31,960 --> 00:35:34,160 Yours seems to be a performance marketing company 537 00:35:34,480 --> 00:35:37,040 rather than a product company or a brand company. Thanks! 538 00:35:38,320 --> 00:35:42,320 A business with a 70% gross margin is fundamentally, a great business. 539 00:35:42,640 --> 00:35:44,400 It's just that we have to be disciplined 540 00:35:44,520 --> 00:35:47,440 about our performance marketing spend and I can help you with that. 541 00:35:47,640 --> 00:35:49,160 [intriguing music plays] 542 00:35:49,320 --> 00:35:51,840 I'll give you 543 00:35:52,000 --> 00:35:53,720 a conditional offer. 544 00:35:54,040 --> 00:35:55,560 [dramatic music playing] 545 00:35:56,200 --> 00:35:58,560 The first condition is that you go back 546 00:35:58,680 --> 00:36:00,400 to making a 10% margin which you can make. 547 00:36:00,480 --> 00:36:01,960 You will just grow slowly. 548 00:36:02,040 --> 00:36:03,400 You must stop burning money 549 00:36:03,480 --> 00:36:06,160 so that you can reduce your debt from Rs. 6 crores to Rs. 2 crores. 550 00:36:07,280 --> 00:36:11,720 My offer is Rs. 1 crore for 1% equity... 551 00:36:11,800 --> 00:36:14,040 - Wow! - In your company and 552 00:36:14,280 --> 00:36:18,400 a 1% royalty of your net revenue 553 00:36:18,520 --> 00:36:20,000 until I get my Rs. 1 crore. 554 00:36:25,600 --> 00:36:26,480 Please tell us. 555 00:36:26,560 --> 00:36:27,880 - Deal done! - Oh, wow! 556 00:36:27,960 --> 00:36:29,280 - Whoa! - [clapping] 557 00:36:54,000 --> 00:36:57,120 'Adil is caught in a debt trap.' 558 00:36:57,200 --> 00:37:01,600 I think I can help Adil to get out of the debt trap 559 00:37:01,680 --> 00:37:03,760 and build a fundamentally strong business. 560 00:37:03,880 --> 00:37:06,640 Secondly, I think his journey full of struggles inspired me. 561 00:37:06,720 --> 00:37:10,240 Actually, I wanted to bet on this founder. 562 00:37:13,800 --> 00:37:15,920 All our bets are based on the founder. 563 00:37:16,040 --> 00:37:18,120 The founder precedes the business. 564 00:37:19,000 --> 00:37:20,320 [sweeping music playing] 565 00:37:22,640 --> 00:37:25,080 [theme music playing] 566 00:38:24,640 --> 00:38:28,400 Sharks, we are completely surrounded by chemicals currently. 567 00:38:28,760 --> 00:38:32,640 - We eat and drink chemicals and also use them daily. - Hmm. 568 00:38:32,760 --> 00:38:34,840 So chemicals are good for us, right? 569 00:38:34,960 --> 00:38:38,160 But a buzzword is quite famous nowadays. 570 00:38:38,280 --> 00:38:40,520 - Can you guess that for us? - "Natural" or "organic"? 571 00:38:40,680 --> 00:38:41,720 [Vineeta chuckling] 572 00:38:41,800 --> 00:38:43,200 That's right. 573 00:38:43,320 --> 00:38:45,720 People think natural products are safe 574 00:38:45,960 --> 00:38:48,280 but the question is, "is natural effective too?" 575 00:38:48,360 --> 00:38:49,960 Are all chemicals bad? 576 00:38:50,120 --> 00:38:51,640 - Sharks, we believe... - Bang on! 577 00:38:51,880 --> 00:38:54,840 Chemicals are good and life is all about chemistry. 578 00:38:55,800 --> 00:38:56,640 Greetings, Sharks. 579 00:39:06,600 --> 00:39:08,680 [ethereal music playing] 580 00:39:22,360 --> 00:39:25,000 Our products are made under expert supervision 581 00:39:25,080 --> 00:39:28,080 with high-quality and innovative ingredients. 582 00:39:28,360 --> 00:39:31,280 They are beginner-friendly and immensely effective. 583 00:39:32,720 --> 00:39:36,000 We have improved the skin health 584 00:39:36,080 --> 00:39:38,200 of more than 3 lakh consumers till now. 585 00:39:38,400 --> 00:39:40,280 Our products are available 586 00:39:40,360 --> 00:39:42,280 on our website and other prominent marketplaces 587 00:39:46,200 --> 00:39:48,560 Sharks, our ask is Rs. 60 lakhs for 2% equity in our company. 588 00:39:55,520 --> 00:39:56,520 Thank you! 589 00:39:57,040 --> 00:39:59,600 The first time I heard of Conscious Chemist was 590 00:39:59,720 --> 00:40:03,200 when a very big influencer personally told me... 591 00:40:03,280 --> 00:40:05,160 - They had two products in the beginning. - Three. 592 00:40:05,240 --> 00:40:06,520 - Three products. - Yes. 593 00:40:06,600 --> 00:40:08,280 She called me up and told me, 594 00:40:08,360 --> 00:40:12,080 "Consider this brand from an acquisition perspective 595 00:40:12,160 --> 00:40:15,000 "- at some point because it's very good quality." - Here they are! 596 00:40:15,080 --> 00:40:16,320 [laughs] 597 00:40:16,400 --> 00:40:19,360 So, I just want to say that the quality of the products is good, 598 00:40:19,440 --> 00:40:22,560 but could you explain how you made such great products? 599 00:40:22,640 --> 00:40:27,040 Vineeta, it typically takes about 40 to 50 iterations 600 00:40:27,120 --> 00:40:30,000 to formulate a product. 601 00:40:30,120 --> 00:40:33,840 We work from scratch or the ground up with manufacturers 602 00:40:34,120 --> 00:40:38,280 - and independent R&D experts to develop formulations. - Okay. 603 00:40:47,800 --> 00:40:50,800 We have 29 unique SKUs 604 00:40:50,960 --> 00:40:53,320 which address different concerns 605 00:41:07,520 --> 00:41:09,040 It took a lot of time 606 00:41:13,280 --> 00:41:16,080 - Would you like to show them? Okay. - We'd love to, of course. 607 00:41:19,920 --> 00:41:21,440 - You can choose any one. - Very nice. 608 00:41:21,920 --> 00:41:23,400 This is an exfoliating cream. 609 00:41:23,560 --> 00:41:25,040 - Huh? - It is an exfoliating cream. 610 00:41:25,120 --> 00:41:26,680 - Can you talk in Hindi? - Hey! 611 00:41:27,640 --> 00:41:29,880 You can try the sunscreen. The yellow one. 612 00:41:31,320 --> 00:41:33,480 - I love your packaging. - Thank you. 613 00:41:33,600 --> 00:41:36,040 Skincare brands have extremely boring packaging! 614 00:41:36,160 --> 00:41:40,680 - To look trustable but still fun... - Sure, correct. 615 00:41:40,760 --> 00:41:44,560 Is really tough. So, I think the logo and packaging are amazing. 616 00:41:44,760 --> 00:41:45,880 [pleasant music playing] 617 00:41:51,480 --> 00:41:53,560 Let me compliment this sunscreen. 618 00:41:53,640 --> 00:41:55,600 - This is SPF 50. - Yes. 619 00:41:55,760 --> 00:41:57,200 And SPF 50 620 00:41:57,280 --> 00:41:59,960 - is not absorbed easily most of the time. - It leaves a white cast. 621 00:42:00,080 --> 00:42:02,360 - This absorbed beautifully... - Thank you. 622 00:42:09,000 --> 00:42:13,280 Wonderful! You've gotten positive feedback already! Crazy! 623 00:42:14,840 --> 00:42:18,520 - The lovely ladies have validated your products. - Very good product. 624 00:42:18,600 --> 00:42:20,720 - Thank you. - The way I opened it... 625 00:42:20,800 --> 00:42:23,200 I just loved the feeling of ripping this off. 626 00:42:23,320 --> 00:42:24,600 - So much love. - Thank you. 627 00:42:39,280 --> 00:42:40,680 We know your product is good. 628 00:42:40,760 --> 00:42:43,000 Tell me what you both do. You're talking but he isn't. 629 00:42:43,080 --> 00:42:47,040 Sharks, I manage D2C, marketplaces and marketing. 630 00:42:47,120 --> 00:42:50,760 I oversee the product and manage investor relations. 631 00:42:50,840 --> 00:42:53,160 - Investor relations! That means you already have investors. - Yes. 632 00:42:53,240 --> 00:42:54,360 - Okay. - So, our... 633 00:42:54,440 --> 00:42:56,880 - He's the CEO. You are the CEO. - Yes. 634 00:42:57,040 --> 00:42:58,320 Start with your sales. 635 00:42:58,400 --> 00:43:03,640 - Our gross revenue last month was Rs. 85 lakhs... - Not bad. 636 00:43:07,520 --> 00:43:08,400 - Everything. - Good. 637 00:43:08,480 --> 00:43:12,720 - Our net sales were Rs. 4.5 crores last year. - Okay. 638 00:43:23,560 --> 00:43:26,200 Our target is to clock Rs. 9 crores in sales this year. 639 00:43:30,600 --> 00:43:32,360 - Okay. - There won't be any profit this year. 640 00:43:33,080 --> 00:43:33,960 Yes. 641 00:43:34,800 --> 00:43:36,000 How will you generate the margin? 642 00:43:36,280 --> 00:43:38,640 - We made some changes to the packaging. - Okay. 643 00:43:38,720 --> 00:43:40,840 We improved our gross margins. 644 00:43:41,080 --> 00:43:43,640 We optimised our marketing cost. 645 00:43:43,920 --> 00:43:46,640 Secondly, we've just gone offline. 646 00:43:46,800 --> 00:43:49,640 - So, we're building offline partnerships. - Got it. 647 00:43:49,920 --> 00:43:51,240 Investors and valuation? 648 00:43:51,360 --> 00:43:54,240 We raised the first round in September 2021 649 00:43:54,320 --> 00:43:56,520 - at a pre-money valuation of Rs. 9 crores. - Okay. 650 00:43:56,640 --> 00:43:59,200 - We raised Rs. 3 crores. - Wow. Okay. 651 00:43:59,320 --> 00:44:01,400 We held a small bridge round 652 00:44:01,480 --> 00:44:03,160 at the pre-money valuation of Rs. 25 crores 653 00:44:03,240 --> 00:44:05,320 in which we raised Rs. 76 lakhs. 654 00:44:05,440 --> 00:44:06,680 - That's it! - Yes. 655 00:44:06,840 --> 00:44:07,760 Tell us the company's name. 656 00:44:07,840 --> 00:44:10,000 Lotus Herbals and Inflection Point Ventures. 657 00:44:10,120 --> 00:44:12,520 - Lotus Herbals! Ah! - Delhi-based. 658 00:44:12,840 --> 00:44:15,600 So, it's bridge financing in terms of convertible notes. 659 00:44:15,680 --> 00:44:16,640 Yes. 660 00:44:18,200 --> 00:44:21,600 'Convertible notes are debt instruments taken by companies' 661 00:44:21,680 --> 00:44:24,880 'in the initial days when it's hard to determine the valuation.' 662 00:44:24,880 --> 00:44:27,160 'Once the valuation is determined later on, ' 663 00:44:27,280 --> 00:44:29,440 'this debt gets converted into equity.' 664 00:44:29,640 --> 00:44:31,480 'This is known as a convertible note.' 665 00:44:31,880 --> 00:44:33,560 You raised Rs. 76 lakhs in equity. 666 00:44:33,640 --> 00:44:36,840 Was it because the company would shut down if you didn't? 667 00:44:37,160 --> 00:44:41,000 - We had a financial situation. - Hmm. 668 00:44:41,080 --> 00:44:43,880 That's why we had to raise this capital. 669 00:44:43,960 --> 00:44:45,200 How much do you have in the bank? 670 00:44:46,360 --> 00:44:48,760 Around Rs. 65 to 70 lakhs. 671 00:44:48,840 --> 00:44:50,560 Given your burn rate, 672 00:44:50,720 --> 00:44:53,080 - you'll have to raise more funds soon. - Correct. 673 00:44:53,200 --> 00:44:54,880 - If you don't, it's game over. - The runway is short. 674 00:44:54,960 --> 00:44:57,720 We have a runway of seven to eight months. 675 00:44:57,840 --> 00:44:59,840 In the next five months, you can go bust. 676 00:45:06,440 --> 00:45:07,880 - I don't think so. - Why not? 677 00:45:07,960 --> 00:45:11,480 Aman, as I mentioned, we've entered into offline partnerships... 678 00:45:11,560 --> 00:45:13,120 - Development... - Offline is a next-level game. 679 00:45:13,200 --> 00:45:15,480 It's even hard to get your investment back. 680 00:45:17,120 --> 00:45:18,120 Let me tell you how it works. 681 00:45:18,200 --> 00:45:20,760 If your goods don't sell, they are returned to you 682 00:45:20,840 --> 00:45:22,800 in such a bad condition that you cannot imagine. 683 00:45:24,280 --> 00:45:25,560 You have two goals to achieve. 684 00:45:25,640 --> 00:45:26,760 To become profitable 685 00:45:26,880 --> 00:45:29,320 and have positive working capital. By when will you do it? 686 00:45:29,400 --> 00:45:32,360 We're also exploring some more categories 687 00:45:32,440 --> 00:45:34,280 - and B2B partnerships... - Oh, man! 688 00:45:35,320 --> 00:45:37,280 Which will bring us cash. 689 00:45:38,400 --> 00:45:40,280 - You are trying new categories. - Yes. 690 00:45:40,360 --> 00:45:43,440 Every new category you explore requires capital. 691 00:45:43,520 --> 00:45:44,360 I'll give you my example. 692 00:45:44,440 --> 00:45:46,880 We made a profitable brand in the headphones category. 693 00:45:47,000 --> 00:45:47,920 We were doing well. 694 00:45:48,040 --> 00:45:51,160 We expanded into wearables and now, we're spending. 695 00:45:56,040 --> 00:45:56,920 Correct. 696 00:45:57,320 --> 00:46:00,520 Entering a new category at this time is the worst decision. 697 00:46:19,040 --> 00:46:21,320 Won't Lotus help you with the distribution? 698 00:46:21,480 --> 00:46:23,120 We don't want them to right now. 699 00:46:23,200 --> 00:46:24,040 Why not? 700 00:46:25,760 --> 00:46:28,640 Do they not want to or are you refusing their capital? 701 00:46:28,720 --> 00:46:30,560 They're giving us money and we don't want to take it. 702 00:46:30,680 --> 00:46:34,800 - We couldn't reach a consensus on a few of the terms. - There you go. 703 00:46:36,240 --> 00:46:38,320 You entered multiple categories and tried everything, 704 00:46:38,400 --> 00:46:39,320 but you couldn't crack it. 705 00:46:39,400 --> 00:46:41,960 Give me just one instance. 706 00:46:43,040 --> 00:46:45,880 I think we wanted to be product champions first. 707 00:46:45,960 --> 00:46:47,880 Along with it, we were building a team as well. 708 00:46:47,960 --> 00:46:49,320 Infatuated by your product. 709 00:46:49,400 --> 00:46:51,880 - You perfect the product and ignore everything else. - No. 710 00:46:52,000 --> 00:46:52,840 - No. - The four Ps. 711 00:46:52,920 --> 00:46:54,520 - This is just one P. - We are infatuated by scale. 712 00:46:54,600 --> 00:46:57,800 Scale excites us and we're working towards it. 713 00:46:58,000 --> 00:47:00,160 That scale will definitely be achieved in the... 714 00:47:00,240 --> 00:47:02,440 - All you perfected was the product then! - Coming months. 715 00:47:04,240 --> 00:47:06,200 Um... I don't know. 716 00:47:06,320 --> 00:47:08,360 That's for you to decide. 717 00:47:10,800 --> 00:47:11,880 Okay. For whatever reason, 718 00:47:12,000 --> 00:47:14,480 you're not able to scale beyond Rs. 9 crores 719 00:47:14,800 --> 00:47:16,080 and you've run out of money. 720 00:47:16,160 --> 00:47:17,800 What can be done, Aman? 721 00:47:17,880 --> 00:47:20,480 Do you think you can help them or do you have questions? 722 00:47:20,560 --> 00:47:21,880 - Did you decide? - I have questions. 723 00:47:21,960 --> 00:47:23,760 Don't pressure me to make a decision right away. 724 00:47:23,880 --> 00:47:26,760 - I'm not. - I was talking to them and you just jumped right in! 725 00:47:28,600 --> 00:47:31,040 - I said that because the questions had stopped. - Whose? 726 00:47:31,200 --> 00:47:32,160 Yours. 727 00:47:32,640 --> 00:47:35,240 I asked so many. Who asked the most questions? 728 00:47:38,040 --> 00:47:38,880 I did. 729 00:47:39,040 --> 00:47:40,160 [laughs] 730 00:47:42,000 --> 00:47:44,560 He doesn't have an answer to your questions. They're rhetorical. 731 00:47:44,680 --> 00:47:46,520 Rhetorical? Can you speak Hindi? 732 00:47:46,640 --> 00:47:47,800 - Why? - [laughs] 733 00:47:49,040 --> 00:47:50,640 I don't know what rhetorical means. 734 00:47:52,760 --> 00:47:54,840 They are questions that you have answers to already. 735 00:47:54,960 --> 00:47:55,800 Am I mad? 736 00:47:55,960 --> 00:47:58,240 Can we talk to them now? 737 00:47:58,680 --> 00:48:00,800 - We need to move forward. - Please do. 738 00:48:02,080 --> 00:48:05,040 First and foremost, after looking at your sunscreen, 739 00:48:05,320 --> 00:48:08,080 I got excited that we had a really great product. 740 00:48:09,000 --> 00:48:11,920 In spite of such a short runway... 741 00:48:12,040 --> 00:48:14,200 Your last year's sale was Rs. 4.5 crores. 742 00:48:14,280 --> 00:48:16,240 It is predicted to be Rs. 9 crores this year. 743 00:48:16,440 --> 00:48:21,000 At such a small scale, you dream of product expansion 744 00:48:22,000 --> 00:48:23,480 and going offline. 745 00:48:24,600 --> 00:48:27,920 Offline is suicidal at your level. 746 00:48:28,040 --> 00:48:33,200 You seem to be really confused. There's such a lot you want to do. 747 00:48:33,720 --> 00:48:38,240 I think you need to go minimalist in your thinking first, okay? 748 00:48:38,480 --> 00:48:40,360 I think I'm nervous as an investor 749 00:48:40,440 --> 00:48:43,200 because you're really confused about your strategy. 750 00:48:43,320 --> 00:48:44,600 Work on that, please. 751 00:48:44,760 --> 00:48:46,920 - I'm out. - Thank you. Thanks. 752 00:48:47,120 --> 00:48:50,840 Your product and brand are brilliant 753 00:48:50,920 --> 00:48:54,000 but your distribution strategy is messed up. 754 00:49:08,240 --> 00:49:10,560 You need to make this a large-scale business on marketplaces 755 00:49:10,640 --> 00:49:13,120 and quick commerce. 756 00:49:13,280 --> 00:49:17,040 This is your team's deficiency. You need to solve this. 757 00:49:17,160 --> 00:49:18,760 Unless you resolve this, 758 00:49:18,840 --> 00:49:21,040 you cannot turn this into a large-scale business 759 00:49:21,120 --> 00:49:23,160 on the basis of product and brand. 760 00:49:23,240 --> 00:49:25,720 For this reason, I am out. Best of luck. 761 00:49:25,800 --> 00:49:27,080 - Thank you. - Thank you. 762 00:49:34,720 --> 00:49:35,840 That's point one. 763 00:49:36,720 --> 00:49:39,520 The second is, you didn't talk about the consumer. 764 00:49:39,800 --> 00:49:42,240 Every founder has this passion 765 00:49:42,400 --> 00:49:44,760 that my product is good and effective and so, it sells. 766 00:49:44,840 --> 00:49:47,120 The person becomes a promoter and garners brand love. 767 00:49:47,440 --> 00:49:48,680 I didn't see that here. 768 00:49:50,480 --> 00:49:52,000 I'm out. All the best. 769 00:49:52,440 --> 00:49:53,640 - Thank you. - Thank you. 770 00:49:54,960 --> 00:49:55,840 I'm out. 771 00:49:56,760 --> 00:49:58,640 Your business is solid, it's good. 772 00:49:58,720 --> 00:50:00,120 Hire a business officer 773 00:50:00,840 --> 00:50:03,160 who will find ways to help you boost sales. 774 00:50:03,360 --> 00:50:05,520 If you have a superb product, you need a superb salesman. 775 00:50:05,600 --> 00:50:07,960 - Hire one. - Sure, thank you. 776 00:50:08,120 --> 00:50:09,040 Thank you. 777 00:50:09,400 --> 00:50:11,960 Your entry was strong, right? 778 00:50:12,200 --> 00:50:13,320 We all got very excited 779 00:50:13,440 --> 00:50:15,240 - after seeing the product and packaging. - Sure. 780 00:50:15,400 --> 00:50:18,280 You know? In business, the best product doesn't always win. 781 00:50:19,120 --> 00:50:20,040 - Of course. - Yes. 782 00:50:20,840 --> 00:50:26,600 You said nothing that is different in terms of strategy 783 00:50:26,800 --> 00:50:29,360 that will help you break away. 784 00:50:29,840 --> 00:50:33,000 You're here today. So, where will you be after that? 785 00:51:04,600 --> 00:51:06,720 - Let me ask you a final question. - Sure. 786 00:51:06,720 --> 00:51:07,920 What terms has Lotus set? 787 00:51:08,960 --> 00:51:11,680 - The valuation they gave us was weak. - How much? 788 00:51:11,920 --> 00:51:13,400 - That was around Rs. 18 crores. - Yes. 789 00:51:13,480 --> 00:51:14,520 How much were they investing? 790 00:51:14,960 --> 00:51:16,840 Around Rs. 2.5 crores. 791 00:51:17,000 --> 00:51:18,560 What is your share? 792 00:51:18,680 --> 00:51:21,800 I own 51% and Prakher owns 17%. 793 00:51:22,160 --> 00:51:24,920 - So, you still have 70% of the company. - Yes. 794 00:51:26,000 --> 00:51:27,360 I'll give you a piece of advice. 795 00:51:27,680 --> 00:51:31,320 If possible, please go to them and accept their offer. 796 00:51:33,160 --> 00:51:34,720 The anti-dilution clause will kick in. 797 00:51:40,280 --> 00:51:41,960 no one is going to fund it 798 00:51:42,040 --> 00:51:46,760 in the beauty space at this scale with a non-clear differentiation. 799 00:51:46,840 --> 00:51:48,360 You are not going to get funding. 800 00:51:49,520 --> 00:51:50,880 You're getting Rs. 2.5 crores. 801 00:51:51,080 --> 00:51:54,480 Be smart. Be a businessman, not a product theatre only. 802 00:51:54,640 --> 00:51:55,720 Take the funding. 803 00:51:55,800 --> 00:51:59,400 You'll get a year to make this work. Otherwise, you're done. 804 00:51:59,520 --> 00:52:01,400 - Good luck. I'm out. - Thank you. 805 00:52:01,480 --> 00:52:02,760 - Good luck, Robin. - Thank you. 806 00:52:02,880 --> 00:52:03,680 - Bye. - Thank you. 807 00:52:03,800 --> 00:52:04,680 - Bye. - Thank you. 808 00:52:05,080 --> 00:52:06,320 [sombre music playing] 809 00:53:30,600 --> 00:53:32,640 Friends, welcome to Ask The Shark 810 00:53:32,720 --> 00:53:34,400 where you get to ask business-related doubts 811 00:53:34,520 --> 00:53:37,240 and questions to your favourite Shark. 812 00:53:37,320 --> 00:53:42,440 I am merely a medium to pass on the Shark's answer to you. 813 00:53:42,520 --> 00:53:44,120 Today on Ask The Shark, we are joined by 814 00:53:44,200 --> 00:53:47,320 the CEO and Founder of Shaadi.com, Mr. Anupam Mittal. 815 00:53:47,400 --> 00:53:49,040 - Welcome, sir. - Thank you very much. 816 00:53:49,160 --> 00:53:52,920 Sir, Mr. Abhinav Thakkar from Pune wants to ask you a question. 817 00:53:53,240 --> 00:53:57,480 I have often seen you ask pitchers about the market size. 818 00:54:06,720 --> 00:54:09,200 of how risky the business is. 819 00:54:09,360 --> 00:54:11,840 When the market size is big, 820 00:54:11,960 --> 00:54:14,080 many mistakes are forgiven 821 00:54:14,400 --> 00:54:17,280 - because market size has that kind of room. - Hmm. 822 00:54:17,400 --> 00:54:19,240 When the market size is small, 823 00:54:19,720 --> 00:54:21,200 no matter what you do... 824 00:54:21,280 --> 00:54:23,560 You might be the best entrepreneur out there, 825 00:54:24,040 --> 00:54:28,080 but your mistakes won't be forgiven because the market is very small. 826 00:54:28,280 --> 00:54:30,840 - You don't have enough room to manoeuvre. - Okay. 827 00:54:30,920 --> 00:54:32,760 - The risks increase. - Okay. 828 00:54:32,880 --> 00:54:36,400 This is why investors give a lot of importance to the market size. 829 00:54:36,480 --> 00:54:37,320 Got it. 830 00:54:37,720 --> 00:54:39,440 How do you calculate this, sir? 831 00:54:39,520 --> 00:54:42,160 There are many ways to calculate the market size. 832 00:54:42,280 --> 00:54:43,720 One is pretty straightforward. 833 00:54:43,840 --> 00:54:46,400 The market size is published in many industries. 834 00:54:46,480 --> 00:54:49,800 Access the internet and do a little bit of research. 835 00:54:49,880 --> 00:54:53,480 You will have a fair idea and get the approximate numbers. 836 00:54:53,600 --> 00:54:56,400 It does happen at times and in many cases, 837 00:54:56,520 --> 00:55:00,480 that you need to find out the market size, right? 838 00:55:00,600 --> 00:55:03,640 - Let's take electric vehicles for instance. - Okay. 839 00:55:04,000 --> 00:55:05,720 It is a product 840 00:55:05,880 --> 00:55:10,680 - that everybody believes will have a huge market in the future. - Okay. 841 00:55:10,880 --> 00:55:12,280 What will its size be? 842 00:55:12,360 --> 00:55:13,400 There are many ways to find out. 843 00:55:13,480 --> 00:55:17,000 One way to very simply put it is to say 844 00:55:17,120 --> 00:55:19,480 that all the cars being sold today 845 00:55:19,840 --> 00:55:23,600 will be replaced by EVs within 20 years. 846 00:55:24,080 --> 00:55:25,560 The next step is 847 00:55:25,840 --> 00:55:29,640 to consider the replacement cycle of an ICE engine. 848 00:55:30,040 --> 00:55:32,600 - Let's say its replacement cycle is every five years. - Okay. 849 00:55:32,720 --> 00:55:36,160 - That of an EV might be ten years as it has fewer parts. - Yes. 850 00:55:36,320 --> 00:55:39,040 So, if you look at the numbers, 851 00:55:39,160 --> 00:55:40,280 you will understand 852 00:55:40,360 --> 00:55:43,000 that the size of the EV industry 853 00:55:43,120 --> 00:55:45,480 might be half of that of the regular car industry 854 00:55:45,640 --> 00:55:48,320 - if the replacement time is half. - Yes, half. 855 00:55:48,400 --> 00:55:51,600 You can take a proxy and calculate the market size too. 856 00:55:51,720 --> 00:55:54,880 At times, you have no idea absolutely 857 00:55:54,960 --> 00:55:56,920 in cases where there is no substitute product. 858 00:55:57,000 --> 00:55:59,680 How do you calculate the market size at that point? 859 00:55:59,760 --> 00:56:04,080 It can be calculated using a top-down approach. 860 00:56:04,160 --> 00:56:06,920 - Take digital watches for instance. - Okay. 861 00:56:07,000 --> 00:56:10,560 - Your watch is priced at Rs. 5000. - Okay.