Family model has difficulty raising capital but still closed on 7.5 billion investment from shark tank
Episode 4 of Shark Tank Vietnam season 6 welcomes the Bach Khoa Com Tho brand to call for capital with two representatives: founder Nguyen Thiep and co-founder Do Mai.
This brand was born in 2014, specializing in serving rice pot products to the student community, office workers and households.
Founder Nguyen Thiep and co-founder Do Mai of the Bach Khoa Rice Pot brand.
After 9 years, Bach Khoa Rice Pot has 30 stores, including 14 self-owned stores, 16 franchise stores and 11 stores in the process of completion.
To achieve the goal of opening 100 stores in 2024, Bach Khoa Rice Pot came to Shark Tank Vietnam to call on the Sharks to invest 5 billion in exchange for 10% of shares.
"We have a development plan for the entire territory of Vietnam. And in the South, there is also a team researching the food culture of the South and Central regions," Do Mai shared more about the startup's development orientation.
Talking about competitive barriers with competitors, Nguyen Thiep said that Bach Khoa Rice Pot has an exclusive formula and always has a research team to create new products.
"And when they copy us, their thinking is just the same as ours, but if they want new results, it's not possible because we always learn and improve every day," said the male founder.
Sharing more about the financial picture, two representatives of Bach Khoa Rice Pot said that the total assets of the brand are 9 billion, working capital is 2 billion. The revenue of the whole chain in 2022 is 40 billion, the profit is 5 billion. Notably, none of the 30 existing stores are at a loss and the expected profit in 2023 will reach about 15-20% depending on the location.
"There is no balance sheet yet. We don't know how much total assets there are and what form the assets are in, how much is equity and how much is debt," Shark Hung concluded and refused to invest.
Shark Hung Anh also refused to invest because he assessed that the startup did not need additional capital.
Shark Louis also left the pool because he found the startup’s plan to conquer the Central and Southern markets unconvincing. Similarly, Shark Tue Lam also rejected this deal.
Shark Binh said: "Professional investors will reject you. Mainly because you are a family model. That is why it will be very difficult for you to raise capital."
Admitting that the brand developed from a family model, Do Mai further explained the reason for coming to Shark Tank to raise capital: "Because from the family model, we realized that there were many shortcomings. Therefore, when we came here, in addition to raising capital, we also wanted the Sharks' companionship to be able to consolidate resources as well as manage and operate appropriately."
Shark Binh closed the deal at 7.5 billion VND for 36%, 3 more requests were made.
Appreciating the startup's desire to transform and change, Shark Binh proposed to invest 5 billion for 36% of shares with the condition that it could open 100 stores, pay dividends to investors and complete due diligence (business appraisal) before broadcasting. The Chairman of the Board of Directors of NextTech said that he could help the startup manage transparently and clearly; Digital transformation, linking software systems, and reporting.
After consultation, Nguyen Thiep expressed his wish to buy back 10-15% of shares at US market price after 1-2 years.
However, Shark Binh did not agree with this proposal. He pointed out that if the number of shares owned is less than 35%, investors will lose their voice, and the startup will return to the family model.
Do Mai continued to make a new proposal with the figure of 10 billion for 36% of shares, Shark Binh made another proposal. "Each side retreated a little, which is to invest 7.5 billion for 36%, with some conditions as follows. First, you must open 100 stores as committed. Second, you must pay dividends to investors annually. Third, complete due diligence and sign the investment contract before the program is broadcast."
Finally, the two founders of Com Tho Bach Khoa agreed to this proposal, marking another "handshake" between Shark Binh and a startup in the F&B field.
16-year-old international student couple raises 300 million
The appearance of L'arlesienne with representatives of 2 international students studying high school in the US: Dinh Phuc Khang - Founder who just turned 18 and Nguyen Ngoc Khanh Linh - 16-year-old Art Director, created excitement for the "Shark" tank.
Dinh Phuc Khang - Founder just turned 18 and Nguyen Ngoc Khanh Linh - Art Director is 16 years old.
L'arlesienne is a fashion company specializing in providing genuine leather bags with unique designs. With the first collection, L'arlesienne sold 95% of the products after 6 months of opening, earning more than 500 million VND, with a profit margin of 28%.
L'arlesienne currently sells through the brand's website, Facebook, and Instagram. In addition, it sells directly through Phuc Khang's sister's store.
Coming to Shark Tank Vietnam season 6, L'arlesienne called on the Sharks to invest 300 million VND for 15% of shares to produce the next collection.
Concerned about the fact that the two founders were young and did not have enough business experience, Shark Louis asked: "Why should we invest in two young people?"
In response, Phuc Khang admitted that he did not have much experience or knowledge in design or business management, but had a passion for fashion. "Young startups often have many bold ideas that can be viewed from many different perspectives," Phuc Khang convinced.
Responding to Shark Hung's question about establishing the business, Phuc Khang said that L'arlesienne was officially registered in December 2022 and the legal representative is Phuc Khang's mother. "I promise the Sharks that the Sharks are investing in us, not my mother," the young startup affirmed.
The cat model design is expected to cost 1 billion VND, however 400 products sold will earn 2.4 billion VND.
According to the sharing, L'arlesienne will continue to be managed by Phuc Khang and Khanh Linh after studying in the US with the following schedule: From the beginning of the year until June, focusing on design. By the time of summer break in June, it is time to produce samples, then survey the market and open for sale at the end of the year.
"We have now finished researching this cat model. The total cost I am estimating to start producing this collection will be around 1 billion VND," Phuc Khang shared about the new collection. This collection will have 400 products, with expected revenue of 2.4 billion VND.
The retail price of 6 million VND/bag made Shark Binh wonder: "Is there anyone willing to pay 6 million to buy this bag?"
Phuc Khang shared that most of the customers of the first collection have a stable income of 20 million VND or more. These customers often do not want to spend too much money on a branded bag but still want to own a unique, quality design. L'arlesienne has standards in production and quality. The advantage of this brand is that it cooperates with an Italian factory that has more than 20 years of experience in the leather bag industry.
Shark Tue Lam believes that only high-income earners in Vietnam are willing to pay for bags priced at VND5 million or more. She advises startups to look for markets with higher incomes and consumer tastes that are more suitable for the product. She will not invest.
Shark Hung Anh and Shark Binh also did not invest because they assessed that the most important thing right now for the two young founders was to focus on studying. From his own experience starting a business at the age of 19, Shark Binh added that "We can only do our best when we are with our customers."
Shark Hung offered 30% of shares for 300 million VND investment, deal closed successfully.
Shark Louis also refused to invest in a production company with no one running it because the founder was still in school.
On the contrary, Shark Hung supports Phuc Khang and Khanh Linh. "I have dozens of businesses and I still go to school normally, if we know how to arrange it," he expressed his opinion.
Wishing to impart knowledge of business administration to the two founders, Shark Hung offered to invest 300 million VND in exchange for 34% of L'arlesienne's shares.
Shark Hung said he could look for more investors in the same field as L'arlesienne that already have a distribution system, the same segment and the same customer base. However, the first goal is that the two founders must ensure their studies and not be too distracted. Starting a business can be considered an internship but must be really serious so that they can later run a trillion-dollar business.
After consideration, Phuc Khang negotiated with Shark Hung an investment of 300 million in exchange for 25% of shares.
Shark Hung continued to offer 30% of shares for 300 million VND investment and L'arlesienne agreed, closing a successful capital calling deal of a young startup at Shark Tank Vietnam season 6.
Valuation up to 4.5 million USD, but only raised capital of 200 thousand USD
Appearing in episode 4 of Shark Tank Vietnam season 6, Bui Thi Hoang Diep - Co-founder of eJoy called on the Sharks to invest 100 thousand USD for 2.2% of shares, equivalent to a business valuation of 4.5 million USD (nearly 100 billion VND).
eJoy is a tool for learning knowledge and English through watching movies, playing games, and relaxing. This tool integrates AI from Google, Microsoft, and Amazon into all video and text websites to translate and look up, saving users time instead of having to open a dictionary to look up. AI not only translates terms but can also create quizzes and save them for users to review and memorize.
Bui Thi Hoang Diep - Co-founder of eJoy called on the Sharks to invest 100 thousand USD for 2.2% of shares.
Established in 2019, eJoy has recorded 1.5 million users and 800,000 monthly active users. The average monthly revenue is 15,000 USD, coming from the subscription model. Accordingly, customers can pay monthly, quarterly or yearly with fees ranging from 70,000 VND/month to 1.7 million VND/year. Although it has made a profit, eJoy is using the profits to continue investing in new products.
With the desire to develop the eJoy tool into a platform to help people learn for life, Hoang Diep came to Shark Tank Vietnam to call for Shark investment.
Explaining the valuation of up to 4.5 million USD, Hoang Diep said that eJoy has been invested by 2 investment funds with a total holding of 8.9%. In the previous round of capital raising in 2021, eJoy had 700 thousand users and was valued at 1.5 million USD.
In addition, startups need capital of 100-200 thousand USD to develop the product into a platform ecosystem without wanting to dilute the share level. The third reason is that the average lifetime value of both free and paid users is 10 thousand VND/person.
Shark Louis offered to invest $300,000 for 36% of the shares, but she refused.
Hoang Diep shared that the typical customer profile of eJoy is those who need to learn on platforms like Coursera, Udemy or many other platforms in each field. Among them, there are two typical customer groups: those who work in technology, need to learn about AI, learn about new technologies and doctors who need to learn medical knowledge in English.
Shark Louis said he is investing in an educational system of about 20 kindergartens and international schools from primary to high school, so he wants to find an Edutech company to develop with this system.
Wanting investors to have a say in the startup, Shark Louis offered to invest 300 thousand USD for 36% of shares.
Shark Tue Lam offered to invest 100 thousand USD for 5% of shares when eJoy reached revenue of 45 thousand USD/month.
Hoang Diep further negotiated with Shark Louis about the investment of 200 thousand USD for 5% of shares. In response, Shark Louis said he would not change his decision.
"Currently, in this capital call, we do not want to dilute to that extent," Hoang Diep shared and decided to reject Shark's investment offer.
Source
Comment (0)