Urban Monkey
Initial Ask – Rs. 1Cr. for 1% equity at a valuation of Rs. 100 Cr.
About the Company
The company has been able to develop a range of street-ware, which has been very popular amongst the younger generations, and the younger generations, which are very fashion-centric have been all over this.
The company has over 10 categories, which according to the sharks is very high, and this increases the distribution costs of the company.
The Eyewear segment is responsible for 30% of the total revenue and the Caps have around 40% of the total revenue.
Thus, the sharks believe that the company should carry on with only these two segments instead of too many segments.
Previous Year Performance
The previous year, the company grossed Rs.3Cr. in sales and this year the company has projected Rs.12Cr in sales, out of which 5Cr has already been achieved till date.
Industry Overview
The Streetware industry is more dominated by local players than a consolidated player. This is also because of the trust which the local players can build with the local population of the area.
Moreover, the taste from one area varies with another and the range of products liked by people all around, is very wide and thus cannot be consolidated under one company.
Moreover, the cost of distribution in the clothing and accessories industry is very high and because of this the margins are also very crunched in the industry.
Moreover, the high number of players in the industry gives a very high bargaining power to the customers, thus killing margins further.
Offers made, and the one accepted:
1. Peyush Bansal offered Rs.5Cr for 50% of the company, contingent on only continuing the 2 segments
2. Aman and Ashneer offered Rs.1Cr for 10% of the company.
Both of these deals were countered with an offer for Rs.1Cr for 1.33% equity.
The owners then raised the equity to 1.53%, which was also turned down by the sharks.