Arata!
What's Arata?
It's a big company!
Why would they come here?
For marketing! What else?
[theme music playing]
[music fades]
Madhok, awesome party.
Thanks, buddy. Your hair's better than the party!
Don't use so much gel.
You'll start losing hair and your hair will turn grey.
Look. Neither will my hair fall nor turn grey.
This is my mother's homemade hair gel recipe.
- Try it. - Thank you.
My gel already has chemicals and toxins.
This has nothing! What do you even have?
I told you. I have a mother.
Sorry,
Oh, God!
- Looks good. - That's how Arata started.
We went from this
to this,
and from this to that.
And we're the founders of Arata.
Arata is a high-performing hair care brand.
No matter what your hair requirement is,
we've already got products for you
or will be making them in the coming days.
The goal is to become
India's best-selling high-performing hair care brand.
Arata is fully online.
We sell our products
for 1.25% of the company.
- Rs. 25,000? - The fare to Mumbai!
Oh, God!
Sharks, our actual ask today
is Rs. 1 crore for 1.25% equity.
Together, let's have a good hair day
- every day! - Every day!
- Dhruv and Dhruv, welcome to Shark Tank. - Yes.
Thank you very much.
From the time I got here,
I have been wondering
that your brand is funded and quite big already.
Taapsee Pannu used to be your brand ambassador.
So, why are you on Shark Tank?
Is it just for the marketing,
because you're not here to close a deal?
Straight up! Fire!
For clarity,
we've solved 0 to 1 to a certain degree.
Our ambition now is to go from 1 to 10.
We're really excited to close a deal with you,
but we would love to get smart money.
If we get funding from you,
then with the help of your experience and synergy,
we can take this company even further.
[music fades]
What's your background?
I did my schooling from Delhi.
I did my college from University of Southern California, Los Angeles.
Then I did banking in Dubai and the US.
Then I started a food ordering app
which I think Deepinder will remember. It was called Snacket.
I, too, was born and raised in Delhi.
I went to the UK for my undergrad.
I completed BSc in Business Studies at Lancaster University.
Then I was an associate
in a startup consultancy in London.
It helps Indian companies set up in UK and EU.
And then, around that time, I had an overlap with Madhok.
When did Arata start?
The first transaction was quite romantic.
On 14th of February, 2018.
But I spoke to either of you during the WhatsApp communication. You?
- You even sent me shampoos. - Yes. Correct.
It was nice. I used your Super Shampoo.
- It's nice. - Thank you very much.
What does Arata mean?
Arata means fresh and new in Japanese.
Oh, it's a Japanese word.
What is so special about the ingredients?
We have perhaps launched India's first hair gel
that is natural and good for your hair.
We have used organic flax seeds.
So, it's natural, alcohol-free,
Because I'm very interested on the formulation side.
Apart from this, we have other unique ingredients.
Like Curcuma longa
which is a derivative of turmeric.
Curcuma longa
improves hair growth.
It is as effective as Minoxidil.
It's not my research but a peer-reviewed study.
It was supplied by our supplier.
Does it have everything?
No, it's a mix.
- I'll take this. - Sure.
- You'll get an unboxing experience. - Cool.
Thank you.
[music playing]
What's your pricing right now? For example,
- if I talk about Super Shampoo. - Yes.
Earlier, we didn't have much scope for negotiation
with our manufacturers for our gross margin.
But now, our new range of shampoo and conditioners,
if you look at the price,
it's for Rs 299 MRP.
I got it. So, your pricing has reduced now.
- Yes. - Absolutely.
Is sulphate-free better for you or with sulphate?
As per medical advice,
if you don't use sulphate, it won't clean properly. What's your view?
It's an ongoing debate with respect to sulphates and silicones.
One side says that silicones
gives you the hydration required for your hair.
The other side says that
it's instant gratification
but over time, it can ruin your hair.
We realized one thing about our customers.
Either you can give a natural product
or a silicone or sulphate based product.
If the product doesn't perform, they won't return.
They won't
rebuy it if their hair doesn't look glamorous, even if it's natural.
We've noticed that if the performance is high,
then natural is an added benefit.
You said it in your pitch that the ingredients are alcohol-free,
so is that consistent across the range?
As some of them have cetyl alcohol,
cetostearyl alcohol in these products.
So is that a brand claim?
We didn't say alcohol-free. Just to correct you, we said
that we're chemical and toxin-free.
No, you said that you make gels without alcohol.
That is alcohol-free.
If you go to website called EWG Skin Deep.
It's basically a repository of ingredients, like Google.
If you enter any ingredient of our products
you will notice that the average is between 1 and 3,
as per their toxicity score.
1 to 3 being safe and non-toxic.
4 to 10 being potentially toxic,
and even carcinogenic.
So, how much is cetyl alcohol as per this number rating?
- Uh. I have to-- - It's definitely between 1 to 3.
You're discussing so much about ingredients,
- you are-- - It's important for her.
No, summarize it by saying that it has alcohol.
Do you know that there is alcohol in six ingredients?
- No, that's okay. - It started with alcohol-free.
- So that's why the conversation. - No, I agree.
I'm giving a hint that we must get a chance to speak too.
Yeah. Let Namita ask her question.
Before I get killed by all of them.
What is your primary online platform?
I had read in between that
you were funded well too.
- Yes. - Please share your rounds quickly.
Yes.
Okay. Round 1 was Rs 3.5 crores, in January 2019.
- Valuation? - Valuation?
Valuation was Rs 11 crores.
In 2020, we raised Rs 7 crores.
And the valuation was Rs 18 crores.
- In 2021? - In 2021, it was Rs 17 crores.
- Wow! - That's huge.
Valuation?
Valuation was Rs 77 crores, post-money.
Oh, wow.
What's the valuation now?
For you all, special VIP valuation,
Rs 79 crores.
Why are you framing it
like VIP valuation of
- Rs 79 crores? - Nothing like that.
That was just humour.
Tell me about the sales.
Which is now
profitable on a monthly basis.
Last month, we closed at Rs 2 crores.
For the first time,
we've experienced profitability at EBITDA level.
- How much profit? - 4 to 5 per cent.
Rs 8 lakhs at EBITDA.
Our MIS is pending.
But our assumption is
that it will be approximately Rs 5 lakhs.
Before that?
In the bank, we currently have Rs 50 lakhs.
After raising Rs 28 crores, you're left with Rs 50 lakhs.
We're left with Rs 50 lakhs in cash in bank but
we have inventory worth Rs 4-4.5 crores.
The company is growing at 40 per cent.
It can't service 18 per cent debt. It's a suicide.
Gun to head, actually,
we realised it a long ago that
we have to start getting profitable.
Whatever we do, putting in all our efforts
and we're doing whatever it takes to make sure the company survives.
We've been in near two death experiences.
But that doesn't give you the right to dodge another death experience.
[music playing]
The plan is not clear.
Just the willfulness and determination is clear.
You're saying that you will make it big.
But the ground beneath you is giving up.
[music playing]
And you're calmly raising just Rs 1 crore.
What is your plan?
Do you have any term sheet?
Right now, we have two LOIs.
Mumbai Angels' minimum investment will be Rs 1.25 crores.
And Inflection Point is Rs 80 lakhs to 2 crores.
And other than that,
hopefully, we will have some participation from the Sharks.
Otherwise, there's always debt.
[music playing]
How much is your shareholding?
43 per cent at the moment.
- You guys are lovely entrepreneurs. - Thank you.
- Solid products. - Thank you.
I've used them myself and I can vouch for it.
Thank you.
What went wrong?
The main issues are our biggest learn
One, maybe we
over-indexed our resources in the curl segment.
The way we planned to take and grow in the market share,
we couldn't. Number one.
Second, we over-indexed on our website.
I disagree with your second point.
I've heard it from many women about Arata
that it's about curling.
- Because that was your USP. - Yes.
And that was your hero.
You could've made it big in that segment.
But you raised so much capital that the pressure of growth
has taken you away from the USP.
Because most businesses
die due to indigestion, not starvation.
You raised so much capital that you did it all.
We never started this brand as a curl brand.
But if you're finding success in a certain space,
then doubling that is also a good strategy.
We did.
It's already a cash cow.
but also need to build a supporting cast.
- Chotu-Motu. - What?
- The small ones. - Yes.
You have Rs 50 lakhs left.
There is no sustainable differentiator.
Okay.
The valuation makes no sense.
At present,
- it seems difficult for me. - Alright.
So, I'm out. Stop lying to yourself.
That it's great that you're profitable now.
A lot still needs to be done!
You're still headed towards death. Good luck!
[music playing]
I'd like to give you an offer.
[squealing]
What I like from your conversation is that you've understood
where the gaps are
and you've understood what you need to do.
How much can you accommodate?
If we can understand
what it is that you're willing to offer.
[music playing]
Okay, listen to the other Sharks first.
Then if I'm the only one left
then you can think and let me know.
- Thank you. We appreciate that. - Thank you.
- I have met you before. - Yes.
- Love you guys. - Thank you.
Love the work that you're doing.
- You're doing well on Blinkit too. - Yes.
- Isn't it? - Yes.
I don't want to be out
but I have to be out.
Because as per Zomato and Blinkit's policy, we can't invest in
restaurants or brand partners.
- Neutrality is important for us. - Okay.
So I have to be out. Sorry for that.
I want to join you
but I'm afraid
because Rs 1 crore is not a joke.
- Yes, Sir. - Not at all.
You want help. I'm willing to help.
Let's connect on WhatsApp and meet outside.
I'm out now because I'm very scared.
If you're still thinking
that a VC will come in and save you
then it's delusional.
- Nobody will save us. - No.
I mean we will save ourselves.
If you bet on the jockey and not the horse,
you will believe that we will do whatever pivot is needed.
You're the jockeys too fast for the horse, is my problem.
But anyway, let me speak to Namita and...
- Thank you. - Thank you.
Okay, fine.
[mumbling]
We can hear you.
We know what you want.
Joke.
Let's convince Aman to come in with everybody else.
[laughing]
And I think Anupam may also be thinking about it.
One thing is great.
You guys haven't lost your sense of humour.
You know, Anupam? If we lose it
we won't be able to keep moving forward.
Good! Great attitude.
They're back. The queens.
[music playing]
It's the final offer. Namita and I will come in.
Say yes or no.
It's a good offer.
- Could we have a minute to discuss? - Yes.
- Yeah, sure. - Thank you. Be right back.
Vineeta, he's saying they're killing it on Blinkit.
Yeah, must be.
And they just started quick commerce.
- I know but quick commerce... - Quick commerce...
Not on quick commerce like Swiggy and Zepto.
Their sales will go up.
We want to make it... continue at 60.
And if they say no, we walk away.
We can't make that call.
[music playing]
We don't have a counteroffer.
We just have a question for clarity.
- Regarding the offer. - Tell me.
If we take Rs 1 crore at this valuation.
You will get around 1.33 per cent equity in the company.
And the differential of 0.6
around 0.33 per cent each
If advisory has any tax implication
then the company
which is Slick Organics...
We will figure it out.
Sure, we'll do that.
- Wow! Good. - You got a deal.
- Thank you for the grilling. - I'm very excited.
Congrats, guys!
So we're betting on the jockeys.
- Yes, we're going to get better. - We promise you.
- Thank you. See you! - Thank you.
- Congrats! - Let's do this.
And we're the founders of Vecros.
I'd like to show you an interesting demo.
A demo that probably none of you or anyone in India
has ever watched.
So, we're calling our flagship product Athera.
And the hero of our pitch.
[buzzing]
Who's operating it?
Prem just pressed a button
and the drone automatically took off
came inside, took a round, and landed.
Also, you saw the 3D map.
[music playing]
Sharks, Athera is India's first
So, Vecros innovated a drone
that has 8 cameras, as you can see.
and can also dodge obstacles, if any.
we're going to launch our new product, Jasper.
we want India to be recognised at the global stage
and want to become the number one player in this category.
So, Sharks, let's change the idea of what drones can do.
We have one demo left.
- Another demo? - Can we show you?
Sure.
I told you about a unique feature of obstacle avoidance.
I'd like to show it to you live.
What is obstacle avoidance?
In obstacle avoidance,
Prem will launch it again
and the drone will hold itself autonomously
and as soon as I get close to it, it will dodge.
If you wish to participate, one of you can experience it.
He is our obstacle. Wish to go?
What?
By chance, if it doesn't miss him, it's alright.
[laughing]
We love you, Anupam.
Okay.
[buzzing]
Whoa!
- What do I have to do? - He's scared.
You have to run towards it, like you have to catch it.
Come on.
Oh my, God!
Enough.
Give me the remote.
- Oh! - No, you can't control it.
I know him. I know how his mind works.
Move aside.
[screaming]
[buzzing]
- Gosh! - That was wrong of you!
- What did I do? I saved my back... - You removed the obstacle.
It is so dangerous.
Oh my God!
Hang on. What happened?
So, here's the thing.
The drone was already trained in a particular orientation
to look for a free path on its own.
When its nose was changed or its...
- Its heading was changed. - The heading changed.
So, it got confused.
That was risky.
[tense music playing]
I hope there is no damage. Can that be repaired?
It can be repaired.
- Its landing gear broke. - Yes.
- We can replace that. - Or you could take her necklace.
[Sharks laugh]
Good to hear. Good to hear that.
Tell us about yourself and your education.
I thought of doing something in drones
which was not attempted before.
It struck me that India doesn't have GPS Denied Technology.
I met Rajeshree on LinkedIn during the pandemic.
Oh, on LinkedIn!
Robotics was my passion.
I wrote over six papers on it during the term of my graduation.
I even got an offer to do a Masters and a PhD.
When I came to IIT Delhi, I started working with him.
I gave up that offer and continued with him.
There are a lot of drone start-ups.
The start-ups in India
mostly work on flight time and avionics.
The real gap lies in intelligence.
The drones that the industry requires
are not being made.
Let's say this tank has a GPS Denied environment.
How do we fly the drone here?
In order to autonomously fly drones,
Why is that so?
- The world has autonomous cars now. - Yes.
Autonomous systems come with a 100 kg payload weight
where you can fit a supercomputer.
When it comes to a drone, even one gram is very important.
So, your invention is miniaturisation.
It has a market share of 37%.
The first is Defence with a 48% market share.
The rest is consumer and other applications.
So, inspection and mapping
- which is your area of work... - Yes.
How big a market is it for drone services and products?
As per the report, it's a 20 billion market in India.
Twenty billion!
- In INR or dollars? - Dollars.
- No, that seems implausible. - The number is inflated.
You didn't take up business courses at IIT Delhi, did you?
- Are you the only company? - Yes, Deepinder.
- In India, right? - Yes.
There must be others abroad.
- There's one in the US. - Yes, a leader in the US.
Who is the leader in the US?
- Skydio. - Skydio.
- Are they not in India at present? - No.
- When are they coming? - Well, regulations are a problem.
The import of drones is now banned.
They might come in the next two or three years.
Do you sell services, products or operating systems?
What do you exactly do?
We operate via two models.
The first is the Enterprise Model.
The next model is for drone service providers
who need a fleet of drones.
What are your sales or revenue?
Our revenue last month was around Rs. 9 lakhs.
Nokia is one of our clients.
We showed them our proof of concept
and they gave us a letter of intent for ten drones.
How many people in India
are registered as drone manufacturers?
200 companies.
100 of them must be bigger than you.
- In business and size, yes. - In size.
For them, this is just a natural extension
if this becomes profitable.
How many do you currently sell?
We are pre-revenue now.
We've gotten acquisition offers.
- You got them? - Yes.
- What did they offer you? - Around 70% of the company.
- For how much? - Rs. 15 crores for 70%.
Our team is quite small right now.
We want to bring passionate people like us on board
and defeat our competition easily.
- There's no harm in dreaming. - Yes, sir.
How will you grow big?
Did you never feel the need for a business co-founder?
He'll focus on the business while you focus on the product.
Our current focus is on growing the business.
Rajeshree and Prem,
the B2B one,
I don't have much knowledge of it.
What the demand in India is or what the needs are.
I won't be of much help to you.
For that reason, I'm out.
As we discussed,
there are bigger drone companies out there than you.
I may be wrong,
but my assumption is
that if one of these companies wanted,
they could enter the market
and easily compete with you.
For that reason, I'm out, but I wish you the best.
I feel that
you're being pulled in the direction of services,
and you have to because of revenue,
so you will lose focus on R&D and tech.
My suggestion to you is
you should get into a partnership
with a tech-commercialisation organisation
that can open those doors for you
while you focus on the technology.
I don't quite see that right now
and I won't be able to help you with that.
So, I am out.
- Good luck. - Thank you.
You said spatial AI drone.
Anupam twitched one button and it crashed.
The terminology you used
and the demo you showed us
didn't seem to match in my opinion.
Secondly, your competition is really high.
A hundred companies are bigger than you.
They are doing more R&D than you.
So far, I have not understood why you guys are special.
The third point is, you said you're a hardware company.
Now, you say you're shifting to services.
If you wish to move to services,
why can't you use anyone else's hardware to make that shift?
You can do that, right, or not?
Their hardware isn't that capable.
It's 3.5. You could import it.
Make it on 3 since it's just services.
Services will have a roadmap.
You'll start one thing and go on to make many others.
So, either be a services company or a hardware company.
At an early stage, both things are too much to do.
For these three reasons, I'm out.
You must know this business. I didn't understand it yet.
It will take more time.
What I liked about you was you turned down an offer
and decided to follow your dreams.
I will make you an offer.
- Whoa! - Wow!
Rs. 10 lakhs for 1% equity.
The rest Rs. 90 lakhs debt for 3 years
We're already closing a round.
Pre-money valuation at Rs. 20 crores
and Rs. 2 crores oversubscribed at post-money valuation.
So, if you want to offer the same valuation...
Um, we'd love to have you.
Basically, that will be Rs. 20 lakhs
- for 1%. - 1%.
Rs. 20 lakhs for 1% equity at a valuation of Rs. 20 crores,
as you had said.
The rest is debt at 10% interest for 3 years.
- Comfortable? - Yes.
Yes. Aman, I think we have a deal.
[camera shutter clicking]
- Thanks a lot. - Bye.
We'll meet in Delhi.
[Sharks giggle]
Don't fly back on your drone.
- No. - [both chuckle]
Hello, friends. Welcome to Ask The Shark.
Joining us today is Deepinder Goyal of Zomato,
also called Deepi.
Rudra from Indore has asked a question.
- Right? To summarise. - Absolutely.