boAt Lifestyle co-founder and CEO Aman Gupta sealed a huge deal on a recent episode of Shark Tank India season 4 amid some high-voltage drama. Shashank Chourey, the founder of the Indore-based perfume brand EM5, came on the show to pitch his business.
Talking about the origins of his brand, Chourey said he was amazed by how expensive luxury perfumes are. He said that most luxury perfume brands work with very high margins.
“Most luxury brands work with very high margins. Upon looking for perfumes that were not so costly, I saw they were spending more on branding, packaging and bottling and no real value was being added to the actual perfumes,” he said.
He said that it was this realisation that led him to create EM5, which offers high-quality luxury fragrances at affordable prices. During the pitch, it was further revealed that the founder is an engineering dropout who has also dabbled into the world of professional hacking due to his passion for IT.
Coming to EM5, the founder said he owns his manufacturing unit and the company achieved a monthly run rate of ₹1.7 crore in just 2 years due to the minimalist packaging approach. He also revealed that he has invested around ₹2.3 crore and the brand has an inventory worth ₹1.7 crore at cost.
He sought an investment of ₹70 lakh for 2 per cent stake in his company, taking his company's valuation to ₹35 crore. His main aim of coming to the show was to get guidance from the 'sharks'. Gupta was impressed with Shashank's hold on his business' numbers and said he saw the latter's potential to make it big.
His fellow 'sharks', however, had some questions. ACKO founder and CEO Varun Dua was concerned what would happen to EM5 if other brands started replicating the same fragrances.
SUGAR Cosmetics co-founder and CEO Vineeta Singh, however, said that a lot of brands like EM5 choose the global bestsellers of international luxury brands and duplicate the exact same scent. Singh and Lenskart's Peyush Bansal opted out of the deal due to concerns about Chourey's overconfidence regarding his business.
Dua, however, offered the pitcher an investment of ₹70 lakh for 5 per cent equity along with 1 per cent royality till he recoups 1.5 x his investment. Anupam Mittal also proposed two offers -- ₹70 lakh for 4 per cent equity with 1 per cent royalty till he recovered his initial investment and ₹70 lakh for 6 per cent equity.
At this point, Aman Gupta also had two offers -- ₹1 crore for 10 per cent equity or ₹70 lakh for 6 per cent equity. Finally, Chourey accepted Aman Gupta's offer of ₹1 crore for 10 per cent equity. Gupta also told the pitcher: “Tu banda goat hai, mere paas boAt hai (You are greatest of all time and I am the owner of boAt).”