ARRCoat
Initial Ask – Rs. 50 lacs for 5% equity at a valuation of Rs. 10 Cr.
About the Company
We are aware of the fact that paint contains a chemical called VOC, helps in spreading cancer as well as depleting the ozone layer. This company wants their product to substitute the paint segment altogether by bringing about an end to end wall solution, through their bricks. These contain zero VOC, they are anti-crack and washable, and it keeps the house cool as it is made of clay. It is no doubt the most traditional way of building the house, but is integrated with modern architecture and thus, gives an antique look. Their first project was with Gauri Khan, who herself is quite knowledgeable in this field.
They feel that this innovation can be an alternative to paints at large scale, for all the reasons mentioned above. D2C paints business is quite not possible and they want to capitalise their business on this.
Past performance of the Company
Their past performance can be seen by the sales worth Rs. 50 lacs in 6 months of opertaions.
Industry Overview
The product solves a very common problem in a very innovative manner. The hazardous effects of paints are being resolved and is the first product to do so. Thus the product will have a huge B2B demand and has the qualities to dominate in the texture market. Expanding their network among retailers and distributors will help in dominating in this market.
Previous Equity Split/Investments
Ekbal, the real minds behind this venture had been given 30% share in profits, whereas 100% equity shareholding was with the father, in the father-son duo.
Offers made, and the one accepted:
Anupam Mittal was the only one to offer Rs. 30 lacs in exchnage for 10% equity of the company, along with Rs. 20 lacs as debt. This offer was made on some conditions: their claims be verified, no existence of other products in the product portfolio, equity to be given to the inventor, Ekbal and bringing a marketing co-founder. They countered by asking for removing the debt part of the offer, and by giving 30% equity of the company to Ekbal. Anupam negotiated and the deal was closed at Rs. 50 lacs for 15% equity of the company, along with the other conditions.