Hair Originals
Initial Ask – Rs. 60 lacs for 2% equity at a valuation of Rs. 30 Cr.
About the Company
Trying to substitute the hair colour market because of its various problems, the company Hair Originals has come up with 100% natural hair extensions in 3 formats: permanent, DIY temporary ones and vig. They provide their services and deliver their product through their website, where the consumer chooses the product and chooses the salon nearest to them, with which they are able to find an end to end solution to the whole problem in almost one-third the cost prevailing in the market.
They source their raw materials from the temples of South and have their manufacturing unit in Gurgaon. Due to the heavy donations at the temples of India, they aim to make this company a global brand and capitalize on the ongoing problems of extreme hair loss and damaged hair quality.
Past performance of the Company
This company has made a huge revenue of Rs. 2.5 Crores in the first 5 months of the financial year 2021-22, of which last month saw sales worth Rs. 55 lacs. Through these numbers, its evident that they make huge gross profits, accounting to about 60-65%. Out of this, they make around Rs. 7.5-8 lacs, making around 15%.
Industry Overview
This industry finds a big chunk and share in India because of the fact that India is the only ethical source of human hair. According to a report in The Economic Times, nearly 35,000 heads are shaven daily on an average by the 1,500-odd barbers employed by the temple management in Sri Venkateswara Temple, one of the biggest suppliers of Remy hair. This shows the size of hair extension market in India and its potential to grow. Thus, this makes India one of the biggest exporter of hair internationally.
However, the industry has been hurt by lockdown on a global basis, seeing a decline of 38%. Overseeing that, the global hair extension market is expected to grow at 13% CAGR till 2026. It has been supplemented by hair loss, hair damage and low quality hair products for these products.
Previous Equity Split/Investments
Previously, they raised Rs. 1 Cr. as angel fund at a valuation of Rs. 10 Cr.
Offers made, and the one accepted:
1. They first got a deal from Aman Gupta and Vineeta Singh, who offered Rs. 60 lacs for an equity of 6%.
2. The other 3 sharks, Anupam Mittal, Peyush Bansal and Ashneer Grover also made an offer together: Rs. 60 lacs, but at 5% equity of the company, which made the offer more attractive.
The founders countered by asking for the same amount at an equity of 4%, for which Aman and Vineeta were ready. But, they made a deal with the other 3 sharks.