Auli
Initial Ask – Rs. 75 lacs for 4% equity at a valuation of Rs. 18.75 Cr.
About the Company
Inspired by skin care and self care, this company manufactures self formulated and self tested cosmetic products, of which there are other companies too, but none are applying their own formulation. This company makes a majority, i.e. 75% of its sales from its website only. Even being registered at the marketplaces like Amazon and Nykaa, this company sells only 10% of its revenue from these platforms, and the other 15% is achieved by calls and WhatsApp orders.
They’ve not invested money correctly, because of the lack of mentorship. Marketing has only been done for the sake of it and by the spread of words. This is the reason that sharks found it difficult to make an investment decision.
Past performance of the Company
Their sales figure are as follows: 2019-20 – Rs. 35 lacs, 2020-21 – Rs. 1.2 Cr and 2021-22 – Rs. 2.5 Cr. They earn a gross profit of 80% as their selling price is Rs. 499 and the cost is Rs. 120. Their net profit margin is 10%
Industry Overview
The cosmetics sector is a highly competitve market and it will be tough to penetrate this market and compete with market leaders like Sephora and Ulta. There are already new-age companies which have also capitalized in the lower price segment areas. However, if a company in this sector keeps its products natural and high in quality an develops a good distribution and marketing strategy then it can succeed.
Previous Equity Split/Investments
The company has previously raised Rs. 1.4 Cr. at a valuation of Rs. 10 Cr. Till now, the founder has diluted a total share of 15% of the company to the investors.
Offers made, and the one accepted:
For the love of women entrepreneurs, Namita Thapar offered Rs. 75 lacs for 20% equity of the company. This was countered by asking to do the investment in 15% equity of the company, and the deal was sealed at this counter offer.