[music playing]
What are you thinking, uncle?
Watching Shark Tank, I also strongly feel
like starting a Ghee business.
Like, Vineeta did an ad promotion with Ranveer.
Similarly, I'll also find a big star
to do an ad promotion.
Uncle, these stars charge crores of rupees for a day's work.
I don't have that.
It's okay. You still have Creative Hatti.
What's that?
Look, when we think of Ghee,
then we think of our grandma first.
So we make grandma do the promotions.
But dear, my grandma...
Not your grandma, uncle.
Your grandma has passed away.
This grandma is immortal.
Wait, grandma!
So, to explain your business to your customers, we have grandma.
Wow!
We'll even have to offer discounts to customers.
Of course.
- Even for that we have grandma. - Awesome!
On top of that, to wish customers
on festival days like Diwali,
you have grandma for that.
That's amazing, Shallu.
This grandma seems to be an all-rounder.
My business is going to be a superhit.
Uncle, start it first.
So, sharks, Creative Hatti provides such solutions.
Sharks, Creative Hatti is a platform
where you get
Our country is very diverse.
We find people of different cultures.
But if we go online to search for
graphics, we only find limited options.
We at Creative Hatti have brought a solution for this.
The graphics from Creative Hatti are not just for startups,
but are used even by
large companies like Amazon, Flipkart and Paytm.
All of them use it.
Not just that, even a lot of companies
on Shark Tank have used our graphics.
And that's why on Instagram,
Nisha is known as Shark Designer.
And today, we have a stock of over 1 lakh characters.
through Creative Hatti.
from Panchkula, where did you meet?
Me and Nisha have known each other from childhood.
We went to school together.
And we met these three amazing co-founders during graduation.
And we decided that
we'll transform this friendship into a business.
We rented a small house
and started our business from there.
And you aren't married yet?
- Me... - I'm married. - Who?
Me and Mukesh.
Nisha and Pawan.
Oh!
What about you, brother?
He's with someone else.
- Someone else. - Right.
And now after marriage, all of you live in the same house?
- Yes, we live in the same house. - All together.
Let's come to the product now.
What are your roles?
Who does what in the company?
I'm Mukesh, the CEO of the company.
Explain the business.
Sharks, this is the homepage of our website, Creative Hatti.
You can download our characters and graphic templates.
I want to show the illustrations of some amazing persons
in a vector style.
We are the top-notch freebies.
[laughing]
So...
The heart and soul of our business are our characters.
There are multiple poses.
For example, Anupam,
let's say you need a priest for Shaadi.com.
Our priest, Mr. Rameshwar,
I think is perfect for your business.
And the price is Rs. 4000 for the entire character set?
- It's mine? - Yes.
And if there's any IP infringement?
Understood.
If someone downloads your images
and distribute it on WhatsApp, how will you protect that?
We can't stop the distribution.
But if there's a big company or a corporate,
they already understand that if they print it...
Do you have any legal team to protect it?
We don't have a legal team as of now.
If someone copies you,
then you don't send a legal notice?
We send them an email.
Mostly, either they remove it,
or pay for it.
But how do you find out?
Google image search.
Google, Instagram, that's how we find out.
You should invest in technology
to detect infringement.
But if I want the same priest,
then it's not that it's exclusively for Anupam.
But can I pay you more and take it exclusively?
There's no exclusive model, but an upscaling model.
We'll tell you to get it custom-made from us.
Understood, got it.
But these are similar to Shutterstock.
No. These are our in-house characters.
Shutterstock has contributor data.
Plus, they have a diverse global data.
No one has so much Indian data.
We can say, a single business model
but not exactly the same because we're tapping the niche market.
Tell me something, does the fundamentals of your business
As far as I understand,
after this kind of AI development?
AI, like Midjourney,
takes data from various places in the internet and create it for you.
But if no data exists,
something no one has made,
we even make that data.
You can create brand new images on Midjourney.
Even the ones that don't exist.
There's a lot available for free.
- No, sir.. - I mean...
This is our speciality, sir.
There's a lot available, but you won't find these ones.
- How do you earn revenue? - How do you earn revenue?
We have three revenue streams.
Our own website.
When did you start the company?
Around 22%.
And how much will you earn this year?
This year, we're projecting Rs. 7 crores.
The expense must mainly be on manpower?
Yes, manpower.
- What's your team size? - A team of 40, sir.
So, your average order value is around Rs. 800.
Yes, ma'am.
It was mentioned as Rs. 4000 there.
Actually, we're not investing in CAC right now.
- your profit is Rs 12 lakhs. - Yes.
- So you will be in a big loss.
The major part is spent on salaries now.
The major share goes to the team.
The revenue is Rs 55 lakhs. Where's the rest?
We spend a bit on infrastructure.
What's the infrastructure?
Infra is basically the rent for the office.
It can't be so high.
Will you spend Rs 15 lakhs on rent in a place like Panchkula?
No, we're not spending Rs 15 lakhs on it.
We have three offices.
Then systems, software licensing,
team journey expenses,
ChatGPT expenses.
Then research, team expenses,
we spend Rs 5-7 lakhs on this.
That makes it Rs 30 lakhs.
- We have to get to Rs 40 lakhs. - Yes.
Have you deducted GST or not?
No, we haven't deducted GST. It's all-inclusive.
Rs 10 lakhs will be GST.
- What's the GST in this category? - 18 per cent.
As far as my understanding goes, your business
is a freelancer business.
Five freelancers have come together
and are putting this up like a business to secure funds.
That's not possible, as far as I know.
The other threat of generative AI that we've already discussed.
I think you're underestimating it.
It will end your business.
So, that's the reason, I'm out. But I wish you all the best.
[music playing]
I believe that
to really build something large
each of your IP
that you're building like Fateh Singh, Nani,
whatever you're creating,
you have to make them popular.
They will have eventually... Like AI influencers
they will have their page on Instagram
and they have to become a brand. Only then,
they will continue.
Else anybody can... What you're selling for Rs 4000,
any designer will copy it and sell it for Rs 3000.
The customer is not looking for Nani.
The customer is looking for any Nani.
India is so populated that
someone can sell your product for cheap.
I think right now that journey
from Rs 7 crores to 50 crores,
there seems to be team gaps
and approach gaps for it.
So, I'm out of it now.
Best of luck.
Your graphics will have a limited use.
In branding or communication.
It can be built to become Rs 30-40 crores worth, I've no doubt.
But as an investor,
to get an exit
you have to reach a certain sale point
which I'm not confident about with this character.
And for that reason, I'm out.
This business is
not so large scale from an investment perspective.
It's a partly services business with repeated custom orders.
If I get into the other side partly,
you should focus on the product business as it's very high ma
Once the character is made, the money will keep coming.
I'm out for that reason. But,
I wish you all the best. I don't think you should raise funds.
You're doing very well.
- It's photography, so it's expensive - Exactly. It's hard work.
If you make a community-driven platform
where you're contributing, as we find very few Indian images right now.
If you're making it community-based
from character to community, then add photography.
That will be a better idea to scale up the business.
But for now, you're profitable.
You just need to invest in your technology and build
your community platform.
And you're doing amazingly well, guys. Keep it up.
Thank you.
Unfortunately, I'm out too.
But stay on it.
You don't need investors. So don't get into it.
- Superb! Very good pitch. - All the best.
We wish the five of you best of luck.
And we'll be rooting for you.
- From... - Just love what you've built.
- Thank you, Sharks. - Thank you.
[music playing]
Flyrobe. You know Flyrobe, right?
What is it?
It's the Indian version of Rent the Runway.
Oh my, God! Flyrobe.
This is a 10-year-old company that died.
I know.
Obviously, it's a reinvention game.
[music playing]
What-the-Rahul?
- Rahul, what are you doing here? - What-the-Rahul?
Oh, very good.
There's a dilemma.
I'm here to find a solution for it.
Meet her. She's Aanchal from Delhi.
And they're Shweta and Rishabh from Bengaluru.
Name your companies quickly.
Our company is called Candid Men.
And my company is called Flyrobe.
Flyrobe and Candid Men
are two great but similar businesses.
So we were confused about whose pitch to send further.
So we decided that
why not give them both an equal chance?
And for you to question them.
After that, you will hear this. [buzzer rings]
It means that time is up.
But there's a small twist.
As Sharks, you have to
hold your decision till the end.
Until both the pitches are complete.
Your decision of investment or no investment, whatever it is,
you won't reveal it until then.
Whoever wins the toss will go first.
And regarding the investment,
it's your money so the decision is yours too.
Shall we toss? Who's calling?
I'll call for tails.
You're calling for tails.
So, you have heads. If we get heads, you will go first.
- Done. - And if it's tails, you will. Done?
On the count of three, two, one.
[music playing]
- Tails. - It's tails. Congratulations!
that we're wearing suits today.
She bought this suit for Rs 13,000.
The MRP of my suit is Rs 13,000 too.
But I got it for Rs 1500.
Because I've rented it.
She spent Rs 11,500 more than me.
On a suit
- that she might never wear again. - Hmm.
Because she's an emotional buyer.
And I'm a logical buyer.
We observed this psychology of men.
We noticed that they want to wear a nice variety of clothes
but they don't wish to spend so much
on one-time occasion wear.
But everyone deserves to look great at an event.
So, we've brought to you,
for our beloved men, Candid Men.
men's number one choice.
Come on, Rishabh! Shweta!
[song fades]
Rishabh! Shweta! I loved the clothes.
- Thank you. - Thanks.
Do you design it yourself?
- He's my brother. - How did you start it? Okay.
It so happened that
two weddings fell in the same month
and I bought three to four pairs of clothes.
I spent around Rs. 30,000 to 35,000.
It felt great when I wore it for the first wedding.
When I wore the same clothes to the other wedding after two weeks,
my excitement had died.
I also realised one thing.
I had spent Rs. 35,000 then,
but didn't wish to spend that much again.
So, it occurred to me that rentals had a good scope.
Interesting.
Please tell me your background.
I've done Computer Science Engineering
from VIT, Vellore.
- My father was into the textile business. - Okay.
I've seen how the textile business functions through him.
Where is it based?
- Erode, Tamil Nadu. - Okay.
- No, I'm not at all angry. - Okay.
Like my sister, I too studied Computer Science Engineering
It's not anger.
- Yes. - Otherwise, you're outspoken.
Just not in front of your sister. Please continue.
I worked for my dad's business also for a while.
I was in the US for one and a half years
to study for MS.
Is she the CEO or are you?
- She is. - I am the CEO.
Got it.
I have a question about this market.
When Rent the Runway, a billion-dollar company,
became big 15 years ago,
many players tried in India after that.
There's a stigma to it
just as there is to repeating your clothes.
Similarly, there's a stigma to wearing rented outfits as well.
Do you see that changing?
Ma'am, the stigma definitely exists, but it has significantly improved.
Rental companies earlier
would treat their customers from the angle of affordability.
Only the customers who don't have money would rent clothes.
They had that kind of stock too which wasn't in trend at all.
What's the average price range of your outfits?
Minimum four days.
What's the average cost?
Rs. 2,300, sir.
then you need to rotate one outfit 15 to 20 times
- On MRP. - On MRP.
- Okay. - How much will this cost me otherwise?
Minimum Rs. 6,000.
I think a similar unbranded outfit will cost Rs. 4,000 to 5,000.
If you're only going to wear it once,
even then paying Rs. 1,300 is cheaper than Rs. 4,000, right?
Okay. This one's for Rs. 1,300. What about the other products?
- The rental for the Jodhpuri set is for Rs. 2,600. - Okay.
This one's also for Rs. 2,600.
This is heavy. It is for Rs. 5,500.
How much would it cost?
This will cost you at least Rs. 35,000 in the market.
Are these branded outfits?
- This is our... - We don't sell it under a brand name.
- Not sell. Sorry. Rent. - Sorry. Rent.
Do you also have a shop or is it an online rental only?
we allowed customers to try our outfits there.
Customers would come to the office
after pre-selecting the outfits from the website.
The sales personnel would keep those clothes in the trial room
for them to try on.
We wanted to see if a showroom
would generate business if we opened one.
How much business do the stores generate?
So, you're growing with your own money.
- Have you raised funding? - No.
Are you profitable even at the company level?
- Yes. - Yes.
Fantastic.
Give us the unit economics of your Hyderabad store.
Until now, the Hyderabad store...
- No, monthly. Last month. - Last month.
Last month was Rs. 10 lakhs.
On average, you rent out one product
- at 20% of the MRP. - Yes.
So, how do you calculate COGS?
- The clothes that we buy... - Yes?
Those designs will become obsolete in a year
and we'll have to replace them after a year.
So, you take the number of wears in a year
and divide it by the total purchase price
to arrive at per rental cost price.
- Is that what you do? - Yes.
What's the usage of one outfit in a year?
That's our EBITDA.
That can't be your EBITDA.
Are you making 40% EBITDA?
If the unit economics is done, may I ask something?
Sure, please do.
Has it happened that people don't return the outfit?
Yes, but it's less than 1%.
Fraud isn't a big issue.
- For now. - Not a big issue till the number is small.
Okay. This industry saw a lot of competitors.
There was a company called Flyrobe. Have you heard of them?
Yes, we have.
They've got funding too.
- Yes. - Have you heard they weren't doing well?
Yet you decided to get into this.
What we're doing is quite different.
Firstly, the stores they opened were huge.
They spent a lot of money on the rent itself.
Basically, our models are different.
We source a lot of things in-house.
We have also realised that
men as consumers don't care what the brand is.
What's your plan three years from now?
How big will your business be?
And how? How will you achieve it?
How many stores would you have when you do sales of Rs 54 crores?
15 to 20.
I think 15. 15...
- You said the monthly profit per store will be Rs. 10 lakhs. - To 20.
So, Rs. 1.5 crores x 12 is Rs. 18 crores.
Your numbers don't seem clear to me as per your strategy.
You're quoting big numbers,
but the backward math is not in place.
- You'd need 40 to 50 stores, right? - Yes.
- Why don't you know the math? - Sorry.
The time to say sorry is over.
You're on Shark Tank now.
So, you haven't thought about a long-term strategy.
You saw the business was doing well
- and this is how it can be grown. - Grow. Yes.
How much money goes into building one store?
- Around Rs. 60 lakhs. - Rs. 60 lakhs.
- Rs. 60 lakhs! - To make 40 stores,
you'll need at least Rs. 25 to 30 crores.
Yes.
What do you think
your biggest strength will be going forward?
- Definitely, thank you. - Thank you.
- All right. - Thank you so much.
[theme music playing]
Hi.
[theme music concludes]
Sharks, do you see this 'lehenga'?
After one picture of it on Instagram,
the 'lehenga' was no more.
We wish to wear something new and designer on every occasion.
That isn't sustainable for the planet
or our pockets.
you can now rent
like Gaurav Gupta, Amit Aggarwal,
Sabyasachi as well as Shantnu Nikhil.
to open over 100 Flyrobe stores in India.
[upbeat song playing]
Very nice designs, Aanchal.
- Thank you. - Lovely.
- I am not a designer. - Okay.
- I'm a lawyer by profession. - Wow.
I worked as a lawyer in Delhi for seven years.
I didn't see that.
I did not found Flyrobe.
I founded Rent It Bae with my partners.
We acquired Flyrobe,
which was the largest player in this space.
We knew we wanted to make a tech-enabled business.
We started online sales ourselves.
We opened our first store ourselves too.
"Are you interested?"
- Whoa! - So...
They had raised funds from big-scale investors.
- Yes, exactly. - How much did you raise in 2018?
We raised a Rs. 1.5 crore round at the time.
the CAC in western wear was not reducing.
- Logically, not many people wear western wear daily. - Yes.
So, they changed the product to ethnic wear.
Now ethnic wear was to be rented out online.
They realised it was important to open stores.
What was the deal?
This was a slump sale.
- we opened our first franchise store in Bengaluru. - What year?
- 2020. - March 2020.
- Covid struck after a week. - Ouch! Right.
We were trying to scale the offline business,
but that completely tanked.
We'd have constant fights with existing investors
because our monies were due which they refused to give us.
We raised our money last over here on 1 April 2020.
How much was raised in total?
- Including Rs. 1.5 crores... - Total Rs. 8 crores. Yes.
Rs. 6 crores there, so that's Rs. 7.5 crores.
- You raised that too. - We raised Rs. 8 crores in total.
- Rs. 8 crores in total. - Rs. 8 crores till date.
How much equity was diluted?
54%.
Micro VC funds.
Oh, wow. Okay.
Explain your business model.
Physically, we have 7 stores as of right now.
So, we have 9 stores in total.
We have dual products.
One is our in-house inventory
What's your average rental price?
In the C2C model,
we basically give the customer 30% of the rental price.
- what's your bottom line at a store? - 27% at our store.
- Got it. This is the bottom line or EBITDA. - Yes.
- Yes. - Okay, thank you.
What was the sales figure for this year?
Over the course of the next five months,
- we will make 60% of our revenue. - How much will you make?
How much profit will you earn from Rs. 7 crores?
Rs. 7 crores will be our GMV.
We will earn a profit of 15%.
if you have taken our franchise,
we will provide you with 20% luxury stock of your store,
- They cannot do that. - This is how a franchise works.
- Why? - Because our barcodes are attached.
Also, we check it every day.
They can trade in cash. Franchisees work their way around.
We had faced this issue.
So, there is a 0% fraud rate.
- Currently, the fraud rate is 0%. - Okay.
Because the deterrent effect is solid.
They will not get any stock from us.
You cannot run your store without luxury stock.
Aanchal, your business is confusing to me.
Because
the companies with around 3 stores...
If I look at the net revenue
that is recorded in the books that investors are interested in.
Your net revenue with 9 stores
Your 7 stores generate revenue equivalent
- to that of 2 to 2.5 stores of another company. - 2.5 stores.
2.5 stores.
The revenue I disclosed is the revenue of 2.5 stores.
- Which was last year's revenue. - Yes!
- The rest of... - How much was your last month's net revenue?
Until now, we have generated Rs. 2.8 crores.
with approximately 3 stores, with an average order value of 2,300.
If we exclusively sell men's clothing will get the same numbers.
However, the women's market is vast,
and we cannot disregard its potential.
Even funded players struggled to keep up,
why are you doing this? What sets you apart from others?
I believe this business
requires a shift in consumer mindset. It will require some time.
When Ola and Uber were first introduced,
hardly anyone used taxis for their daily commute.
The mindset gradually changed.
Celebrities are talking about this now.
When Sonam Kapoor mentions in Karan Johar's show
that we are not crazy to splurge on expensive clothes.
All our clothes are borrowed.
Sara Ali Khan walks the ramp,
shows off her dress and says this is borrowed fashion.
It is also expanding the narrative of sustainability, right?
The mindset is changing.
- I have a doubt. - Okay.
The person who purchased Gaurav Gupta's dress
worth Rs. 4.5 lakhs,
will that person
have an interest in earning money from rentals?
Basically,
the person who owns a Gaurav Gupta dress
cannot do anything about it.
There is no market for used ethnic items in India.
But she will think about when to wear it next.
It's not a wedding dress that she won't wear again.
If she decides to wear it, we will give it to her.
If the dress gets damaged, are you compensating them with Rs. 4.5 lakhs?
We take rent and security deposit from our customers.
The security deposit doesn't cover the entire value of the dress.
- My heart races when you talk so fast. - Breathless.
I am sorry.
- No, it's a good thing. - No problem.
Answer my question and we will understand.
What is your customer retention rate in C2C?
I have an approximate number.
We have received clothing from people we reached out to last year,
and approximately 15% to 20% of them
- Yes! - Thank you! Love your energy and passion. Keep going.
- Very nice seeing all of you. - All the best.
- Thank you! - Go, girl!
[theme music playing]
Running this business poses significant operational challenges.
of scalability beyond metropolitan areas,
regardless of the obstacles encountered.
And for that reason, I am out.
Rishabh and Shweta. Just like Namita,
I decided never to enter the rental business.
There are two crucial elements that you have
successfully mastered.
First, you mentioned that in one year
you rent one piece of clothing
eight times on average.
Second, you mentioned that your fraud rate
is less than 1%.
I thought that achieving these two metrics
would be unattainable for a rental business.
You have managed to accomplish that,
which shows your strong execution capabilities.
But your team needs improvement.
[suspenseful music playing]
So, I have an offer for you.
This is conditional upon my verification of these two numbers.
The average unit is utilized 8 times annually.
And the fraud rate is less than 1%.
So, my offer is Rs. 60 lakhs... That was your ask.
[laughing]
But this year's projection is Rs. 6 crores in revenue.
He will give you a brilliant offer.
I will take a couple of minutes.
- I will go next! - It's stressing me out.
I am impressed with the execution strength shown by both of you.
I love such founders.
I didn't get clarity on your plan of action.
But we can jump-start with it.
I have an offer for you.
Rs. 60 lakhs which was your ask for 5%
Shweta, super impressed. You are sharp and analytical.
So, congratulations.
I think you will make it big.
You will need a minimum of Rs. 50 crores.
I firmly believe that
it is not advisable to invest in VCs for the upcoming 2 to 4 years.
In order to take this risk, as Vineeta proposed,
it must account for 8% to 10% of your company.
You won't accept that.
So, I am out.
I wish you all the best.
You hurt them.
Rishabh! Shweta! Brilliant entrepreneurs.
Don't give 5% or 10% of equity at this stage.
I am out.
You require minimal assistance now. Open 2 or 3 additional stores.
And you will see an increase in valuation.
They aren't giving you the right valuation.
He is out.
We have a counteroffer for both of you.
But the valuation is Rs. 20 crores. You won't budge.
We will make a profit of Rs. 2 crores
I can't proceed with a valuation of Rs. 20 crores.
- So... - May I suggest something?
Feel free to propose a valuation along with the percentage of equity.
In case, you manage to achieve a PAT of Rs. 2 crores,
consider clawing back some equity.
Yes, that is fine with us.
3% with a clawback.
[suspenseful music playing]
Okay! I will offer this to you now.
you will be eligible for an additional 2% clawback.
So, you will get the deal at 3%.
Same offer.
- Congratulations! - Thank you!
Super excited.
[camera clicks]
[theme music playing]
Welcome back!
- Hi! - Aanchal! - Did you drink water? -Yes!
- I drank water. - Are you calm now? - Yes!
- All right! - Aanchal,
honestly, your business
has operational challenges.
Especially, since it is a C2C business.
So, it's a very
challenging business for me personally.
So, I am out! But I wish you the best.
Thank you!
Aanchal, sometimes,
having high energy and intelligence can lead us
to hustle in too many directions,
inadvertently causing complications for ourselves.
Your operational metrics
are not as good as those of other businesses
in this industry.
So, I think you should
simplify it more before you raise more capital.
For that reason, I am out.
Aanchal, I never imagined that renting could be so profitable.
However, when I learned about the number of stores you both have.
It convinced me that this market exists.
But I don't think the plan of action you chose
is accurate.
You need to complicate things less
and concentrate on it.
Then you may do well.
- I am out today. - Sure.
Aanchal, I beg to differ.
I think your energy is what sets you apart
in this industry where funded players struggle to make an impact,
you left a mark there.
The franchise partners are generating revenue
and you are also reaping profits.
I like your energy.
And you are channelling it effectively.
When I asked you,
you mentioned that you've tried many things.
There were complications at the start, but not any more.
You've solved the issue.
I loved you for that.
And for that, I will give you an offer.
Wow!
- Why are you so surprised? - Wonderful!
- Okay! - Lovely!
that your CAP table is quite messy.
54% with a micro VC?
I am confused
if will I invest in you or micro VC.
So, that's my biggest challenge.
And that's the reason, I am out.
Good luck to you!
- Thank you. - You have an offer.
I hope it works out.
Thank you so much.
Can I take some time and come back? Thanks.
[phone ringing]
- Hello! - Ricky!
- Yes? - We have one offer from Aman. - Okay.
5% equity for Rs. 50 lakhs.
- Can you negotiate? - Sure. How much?
He advised the first pitcher not to give 5% for Rs. 50 lakhs.
[mumbling]
Her CAP is messy. How are you taking 5%?
[suspenseful music playing]
Welcome, Aanchal!
Aanchal, before you say anything,
you should keep your equity safe.
- Think before you make this deal. - Sure.
[laughing]
If you would like to reduce the equity.
He won't like to do that.
Kindly consider reducing the equity. It is a request.
The current proportion of equity
necessitates raising additional rounds.
So, my ask is
But sometimes Sharks are unfair and unreasonable.
That is between you guys.
I cannot accept Rs. 50 lakhs for 3%.
As everyone mentioned, nobody would
consider entering this industry for the next 2 to 3 years.
So, you will have to build it more.
I am prepared.
- There was a window of 10 years. - I think you can do it.
- Yes, I am prepared. - I will give you a counteroffer.
[camera clicks]
- Thank you, Aanchal. All the best. - Thank you so much.
- All the best, Aanchal. - Thank you!