Current funding environment made Shark Tank India a compelling platform from an investment perspective: Vineeta Singh

In 2021, when Shark Tank India first aired, there was almost $40 billion worth of investment that took place in the VC ecosystem. That number fell to $11 billion in 2023. SUGAR Cosmetics founder Vineeta Singh, who’s one of the 12 sharks on the show, said the current funding environment has made Shark Tank India a very compelling platform from a practical investment perspective given the outside environment of funding is pretty tough. 

The third season starts streaming on SonyLIV from January 22. 

Singh adds that the word has spread in the founder community that the kind of leverage that one gets post airing is unprecedented. “Most companies post airing grow 10-100 times. We had some of the finest start-ups of India queuing up this season. We saw a lot of innovation coming from Tier III and rural India from apps solving transportation problem to rural women getting empowered. This was the best season in terms of the kind of companies in various industries like healthtech, AI, robotics, etc.,” Vineeta Singh, CEO, SUGAR Cosmetics told Business Today. 

In the last two seasons, there were questions raised on the profitability of the start-ups run by Shark Tank India judges. According to Singh, there is no one-size-fits-all metric on whether a start-up needs to be profitable from day one or day hundred. “It depends on which industry they are playing in and what kind of access to capital they have. In the case of SUGAR Cosmetics, in our 0 to Rs 20 crore journey, for instance, we were profitable,” she adds.  

“Having crossed that phase and grown into India’s third largest makeup brand, from here on to our future public listing, we plan to grow the business profitably, and breaking even in December 2023 was the first step towards that.” 

She said that the growing digital penetration during Covid-19, shopping on e-commerce platforms spiked. “Here, we found an opportunity to gain market share and we started doubling year on year. While the gross margins have improved from 70% to 73%, we chose to invest more in marketing over the last three to four years so that we can gain market share,” she adds. 

This year, the SUGAR board plans to continue growing more than market growth by 15-20% and focus on generating profits that we can reinvest into the business, the Shark Tank India judge said. “I think this is an honest conversation between the founders and their investors in terms of how much they are planning to grow and how much they plan to invest in marketing and brand building. Hence, I don’t think it’s ideal to use the same metrics across companies at different stages of growth,” she said. 

While she agrees that the greatest goal of any organisation is to be profitable and to deliver sustainable growth for its shareholders, she adds that at what stage they decide to prioritise profitability in addition to growth is a choice based generally a conversation with key stakeholders in the company. 

There are cases where start-ups are losing money where they don’t have access to capital and they’ve taken debt and continue to burn money to chase a higher gross merchandise value (GMV), she says. “I think that’s a really bad idea because then you’re putting everything at stake to grow faster to a point where you hope that a new round of funding will bail you out. But when there is enough money in banks and there’s an opportunity to gain market share, I think it’s important to get the timing right,” she adds. According to her if one misses the timing and doesn’t go fast enough, then there is a chance of losing the opportunity to build distribution and focus on brand building to gain market share from competitors.