Bringing dragon fruit instant noodles to Shark Tank to raise capital, the founding team received 1 million USD for 10% of shares from Shark Binh. Ms. Phan Thi Na - General Director, co-founder of Caty Food Joint Stock Company, the owner of dragon fruit instant noodles, said that the initial capital raising goal, Caty Food wanted 1 million USD for 5% of shares, equivalent to valuing the business at 20 million USD.
According to Ms. Na, although the instant noodle market is fiercely competitive and is always considered a red market, Caty Food aims to capture 5% of the total market share by 2026.
On Shark Tank, the founders of the dragon fruit instant noodle brand valued the business at 20 million USD, and received 1 million USD in exchange for 10% of shares. (Photo: N. Chung)
This CEO believes that in 2023, Vietnam will record the consumption of more than 8 billion noodle packages. In addition to the big players, there is still up to 27% of the market share of small noodle companies, and this is an opportunity for Caty Food, because in terms of the instant noodle market with fruit ingredients, dragon fruit noodles have no competitors and the potential for development is huge.
In December 2023, dragon fruit instant noodles suddenly launched a "first time" campaign, with a short clip "For the first time, dragon fruit is in instant noodles". This communication campaign immediately took the top spot on social trends in November and December 2023, bringing hundreds of millions of views and organic reach on social networking platforms.
Caty's unique media campaign has successfully "taken the internet by storm", creating a huge amount of attention for this noodle brand. In just a short time, the dragon fruit instant noodle brand has become famous everywhere. The dragon fruit instant noodle manufacturer cannot produce enough to sell. A series of other brands have also joined in with the fun and impressive "first time" trend.
Ms. Na said that dragon fruit noodles have sold more than 3 million packages of noodles after the success of the campaign "Dragon fruit in instant noodles for the first time". The company has expanded to more than 10,000 points of sale, with revenue in 2023 reaching 46 billion VND, with a profit margin after tax of 8%.
In 2024, the company plans to have a revenue of 250 billion VND and expand to more than 50,000 points of sale by 2025. By 2026, the revenue target will reach 2,000 billion VND. Currently, the amount of dragon fruit noodles supplied to the market every day is about 1 million packages. With a factory price of 7,000 VND/package. The founders of this instant noodle brand also affirmed that they do not compete with traditional noodle brands, but want to follow the direction of instant noodles with fruit ingredients.
In 2024, dragon fruit instant noodles aim to earn 250 billion VND and open 50,000 points of sale next year. (Photo: TL)
Talking about the success of the communication campaign “Dragon fruit in instant noodles for the first time”, Marketing Director Tran Danh said that the company’s marketing team is very young, knowledgeable about popular culture and especially grasps trends. When starting to implement, it was calculated that after launching this campaign, it would have a certain virality.
Therefore, Caty Food is very confident and has measured 50-60% of the situation. However, the actual attraction is greater than expected, creating a "positive crisis" when the campaign is successful. Mr. Danh also revealed that this team is still nurturing another explosive campaign in the last months of 2024.
Talking about the journey of creating dragon fruit instant noodles, CEO Caty Food said that the company is a member of the Binh Thuan Dragon Fruit Association, always struggling and yearning to find an outlet for dragon fruit not only in this "kingdom" of dragon fruit but also in the dragon fruit provinces and cities across the country in general.
After 2 years of research with the University of Industry and Trade and the Saigon Institute of Economic Sciences, the company has successfully developed nanotechnology dragon fruit instant noodles, with clear noodles containing 12% dragon fruit content. Dragon fruit noodles have been certified as a product of a science and technology enterprise of Binh Thuan province.
The product is considered a breakthrough, because for the first time in the world, Vietnamese people have successfully brought dragon fruit into noodles, and this is also the competitive advantage of dragon fruit noodles. The combination of fresh dragon fruit into noodles helps reduce starch, creating a cool feeling, better digestion but still maintaining the deliciousness of noodles. Caty also has a technology patent, registered exclusively in the US, China and some other countries.
Dragon fruit instant noodles attracted attention in the market at the end of 2023 with the campaign "For the first time, dragon fruit is in instant noodles" and immediately sold out 3 million packages of noodles. (Photo: HP)
Dragon fruit instant noodles are not only sold domestically but also exported to the US, China, Russia, Indonesia and Australia. Currently, Caty Food has successfully signed contracts with two major partners, the US and China. Of which, with the US, the company has successfully signed 5 containers. With Chinese customers, it has also successfully signed 7 containers and is negotiating to sign 10 containers with Russia and 8 containers with Indonesia. Each container ranges from 700-800 million VND in value.
Talking about the reason for pouring 1 million USD into Caty Food in exchange for 10% of shares, Shark Nguyen Hoa Binh said that in this industry, he found out that in the US, with food processing, companies on the stock exchange only have a P/E (price to earning ratio) of about 15 times. But with a startup company like Caty Food, the valuation is only a maximum of 10 times. This year's profit is 20 billion VND, so the valuation is only about 200 billion VND. With this valuation, Shark Binh offered a deal of 1 million USD for 11.1% of shares.
After consultation, Caty Food team accepted a deal of 1 million USD for 10% of Shark Binh's shares. Successfully closed the capital calling deal.
“Personally, I think the instant noodle market is very red, it is as red as the skin of a dragon fruit. As far as I know, there are about 50 instant noodle companies in the market, and the 4 big ones have the majority of the market share, many smaller businesses are also struggling. This industry has low profit margins,” said Shark Minh Beta, founder of Beta Group.
Source: https://vtcnews.vn/mi-tom-thanh-long-nhan-von-trieu-usd-nha-san-xuat-muon-thu-2-000-ty-dong-ar903099.html
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