Pitch 4: Tagz
The idea was born with a purpose to eliminate unhealthy, fried, oily snacks. Founders Anish and Sagar like to call it an urban, Gen-Z snack brand.
Their popped (not fried) potato chips have 50% less fat. The popping technology uses high temperature and pressure, which makes the snack 50% less in fat, and void of cholesterol, gluten, trans-fat, palm oil, and artificial colors/ flavors.
The company wants to expand into chips, dips, chocolates, and cookies, and make a mark in all the mainstream indulgent categories, hence becoming an umbrella of brands.
Tagz is available on more than 30 websites (their official website, Amazon, BigBasket, etc.) and 2,000 retail stores.
Reaction of the Sharks
Sharks Anupam Mittal and Aman Gupta are put off by the company’s valuation of ₹70 crores. Gupta states that Virat Kohli, India’s celebrity cricketer, had introduced a similar concept. Affirming his opinion, Mittal says that customers do not care whether the snack is popped, fried, or baked, but they want it to taste good and is preferably healthy.
In response, the pitcher Anish says that they’re not looking for a consumer who has strict standards of healthy food. Rather, Tagz’s ideal customer is one who wants an alternative to fried chips but can’t avoid their craving, which the founders believe, makes up a large market.
Shark Aman Gupta also states that offering a meager 1% equity on the company is disrespectful, and valuation of ₹70 crores is too greedy.
Shark Ashneer Grover is skeptical whether the company isn’t putting enough focus on offline sales. In response to the pitcher’s reply that the pandemic turned things over in the offline space, Grover harshly critiques the company’s stance and explains that the instability that they believe exists in the offline market because of the pandemic is a myth, and sellers are doing good business through the offline channels.
Financial Performance
While pitching, the company had an annual revenue rate of Rs. 7 crores. In the immediate year before, it was Rs. 1.25 crores. 66% of the sales were online and 40% were through the company’s own site.
Tagz makes each unit at Rs. 17 and sells it at Rs. 32.5, with an average gross profit of 48%.
Ask: ₹70 lakhs for 1% equity
Company Valuation: ₹70 crores
Offer from the Sharks
Shark Anupam Mittal sees a lot of work to be done, and can’t fathom how Tagz can justify its valuation via online sales in the future. He’s out.
Shark Vineeta Singh thinks the B2C model will raise inefficiencies for the company and rather suggests the business focus on growing its store base. She steps out.
Sharks Aman and Namita collaborate and offer a combined ₹70 lakhs but for 4% equity. Meanwhile, Shark Ashneer Grover offers ₹70 lakh himself for 3.5% equity. The two groups of sharks then proceed to sell themselves and prove the other party wrong. Grover accuses Aman and Namita of trying to overpromise their way into a deal.
Pitcher’s Counter Offer:
₹70 lakhs in exchange for 2.5% equity.
Sharks’ Counter Offer:
Sharks Aman and Namita come down to 3% for the same amount of investment.
Shark Ashneer Grover counters with ₹70 lakhs for 2.75% equity, trying to undercut the other group.
Pitcher’s Counter Offer:
The pitchers try to persuade Ashneer Grover to come down to 2.5%, just so they can go back and justify the valuation to their existing investors and keep them happy.
This is when Grover becomes brutally honest and tells them that he’s not here to please anyone, and Tagz does not need to please its investors this way either. Grover says that he has the best offer on the table and he has been standing alone from the start, strengthening his argument. In order to create a sense of urgency, Grover says that he can sign a check for the investment right now if the pitchers agree.
Final Deal:
Tagz gives in and takes Ashneer Grover’s offer of ₹70 lakhs for 2.75% equity, valuing the company at ₹25.45 crores.
Pitch 5: Head and Heart
Head and Heart is a family venture. The head of the family, and the business, Gurnandan Singh claims that his scientific Japanese technique called brain optimization can help students with their concentration, memory, and ultimate brain performance. His wife Rahvinder is an educationist.
Gurnandan Singh’s daughters Mehek and Chehek then go on to identify the name and colors of items blindfolded. The younger daughter can also read the serial number of a currency note without looking.
The pitcher claims that Himachal Education Board has approved their course to be included in the curriculum as an elective.
Financial Performance
The company Head and Heart has already trained more than 5,000 participants. 1,100 students from 7 countries have attended the session online.
The company takes Rs. 5 lakhs from a franchisee. The company also gets 30% royalty from each trainer afterward. Their revenue last year was Rs. 30 lakhs.
Ask: ₹50 lakhs for 5% equity
Company Valuation: ₹10 crores
Offer from the Sharks
The sharks are totally bewildered as if watching a magic trick.
Shark Ashneer Grover questions the business model of the company. He is also skeptical about the pitcher’s claim that Himachal Education Board has approved the technique in the curriculum. Grover also feels it is gimmicky. Because of lack of tangibility, he is out.
Shark Aman Gupta questions the defensibility as anyone can upload the course in Byju’s or other online learning platforms. Gupta steps out.
Anupam Mittal also does not understand how Head and Heart can defend its originality in the online space. He is out.
Namita thinks the company should focus more on corporate clients than students, as tangible results appear quickly. From an investment perspective, she is out.
Shark Vineeta Singh is also out.
As a result, the company Head and Heart does not get an offer from Shark Tank.
Shark Tank India Episode 1: Bluepine Foods (Momo Mami), Booz Scooters, and Heart Up My Sleeves
Shark Tank India Episode 2: Tagz, Head and Heart
Shark Tank India Episode 3: qZense Labs, Peeshute, and NOCD
Shark Tank India Episode 4: CosIQ Cosmetics, Jhaji Store, and Bummer
Shark Tank India Episode 5: Revamp Moto and Hungry Head
