The Yarn Bazaar
Initial Ask – Rs. 50 lacs for 2% equity at a valuation of Rs. 12.5 Cr.
About the Company
This company aims to become an end to end B2B yarn marketplace. They help to make the unorganised yarn buying and selling process a lot easier. They have their own application, through which they make this possible.
They have been involved with about 212 transactions since July 2019, which have happened in a 100% advance based system through escrow account. Suppliers bill the company and then the company bills the buyers. They charge a commission for each transaction, which varies between 0.5-1.5%. They provide assurance of service and quality, for which suppliers and buyers have referred their own buyers and suppliers too.
Risks involved in this service is the high rejection rate that is possible because of the bad delivery of services. They have planned to integrate with small yarn manufacturing units and use their produce to sell under their brand name through white labelling,
Past performance of the Company
Their sales figure in the month of October is Rs. 15 lacs from an order book of Rs. 10 Cr., that points towards 1.5% commission.
Industry Overview
The Indian textile industry is highly unorganised. Operations have recently been looked upon, but apart from that, the sales, distribution, marketing, procurement of raw materials, all remain very scattered. The processes involve calling and communicating with multiple suppliers, making it very inefficient and non-transparent. This is also a cost sensitive industry. Thus, to capitalise on the broken supply chain, this industry gives immense opportunities,
There are no companies as of now doing this in a single industry or towards a single problem, thus giving this company the first mover advantage.
Previous Equity Split/Investments
The equity is split between the COO (18%), Strategy head (5%), CTO (5%) and the CEO (remaining).
Offers made, and the one accepted:
Anupam Mittal, Peyush Bansal, Ashneer Grover and Aman Gupta came together to offer Rs. 1 Cr. for an equity of 10%. This was countered by asking for Rs. 1.25 Cr. for 10%. But the deal was sealed at the original offer itself.