Tagz Foods
Initial Ask – Rs.70lacs for 1% equity at a valuation of Rs.70Cr.
About the Company
The company has used a new technology, named Popping in the snacks industry. This technology avoids any artificial substances to be involved in the manufacturing process. The company is currently producing popped potato chips and aims to focus on cookies, chocolates and other fast moving consumables.
It is currently present on over 300 Online platforms and over 2000 Brick and Mortar stores. The gross margins enjoyed by the company are very crunched and the industry is filled with competition.
Past performance of the Company
The company earned a revenue of Rs.1.35Cr in the previous year and is on track to do 7Cr. this year in sales.
40% of these sales are through own website.
Industry Overview
The industry has a Pepsico dominance, and is followed by local competitors which are far too many. Displacing the giants will be difficult we feel. Health chips aren’t mainstream, but they do have scope for growth. This market is double edged. Huge marketing expenses will be expected from the company. Will be interesting to see which market they prefer to begin in. Moreover, the competition in this industry is very fierce, due to which the Customer Acquisition Cost will be very high and still big companies will try to overrun new entrants.
Main competitors in this space include Too Yum, which is currently marketed by Virat Kohli, who is a great fitness model, making marketing further difficult into this industry.
Previous Equity Split
Raised Rs.4Cr. at a valuation of Rs.20Cr
Offers made, and the one accepted:
1. Namita Thapar and Aman Gupta offered Rs.70lakhs for 4% equity
2. Simultaneously, Ashneer Grover, offered the same amount for 3.5% equity.
Both of these offers, were countered for 2.5% equity for Rs.70lakhs.
3. This made Namita and Aman drop the offer to 3% equity for the same amount
4. Finally, Ashneer dropped his offer to 2.75% equity for an equal amount