A married couple from Rajasthan recently brought their biofuel company, Ecoil, to the Shark Tank India stage, presenting their sustainable business model with confidence. Their primary goal is to collect waste oil from restaurants and transform it into biofuel. While explaining their approach, they highlighted how biofuel is often made from palm oil and meat tallow, but their method stands out for its sustainability. The entrepreneurs stressed the increasing need for eco-friendly solutions, especially as the airline industry faces mandates to reduce carbon emissions.
Seeking Rs 1 crore for 1.25% equity, the founders valued Ecoil at Rs 80 crore. The sharks, including the newest addition, Chirag Nakrani, were visibly impressed by the company’s financial growth. With a projected revenue of Rs 26 crore this year and Shell India already holding a 4% stake, Ecoil had strong credentials to back its claims.
While Aman Gupta raised concerns about potential competition from industry giants, Ritesh Agarwal saw promise in Ecoil’s market potential. Aman pointed out that bigger players could undercut them once the industry gained traction. However, Ritesh believed otherwise, emphasizing that the market had ample space for multiple players. Chirag, too, showed interest, leading to an offer from both him and Ritesh.
Namita Thapar chose to step away from the deal, voicing skepticism about the industry’s future. She argued that airlines might prefer purchasing carbon offsets over using biofuel. “This is my thesis,” she stated, maintaining her belief in the airlines’ cost-cutting preferences. The founders stood firm, shaking their heads in disagreement.
Anupam Mittal took a different stance. He saw Ecoil not as a fuel manufacturer but as a part of the oil supply chain. While acknowledging their progress, he said, “You’re on the right track, but you’re what I call a sandwiched business.” He explained how the company would face pricing pressure from established corporations, while also struggling to predict the success of downstream buyers. Eventually, Anupam also decided to step out.
Negotiations took a sharp turn when the founders asserted their unwillingness to lower Ecoil’s valuation below Rs 50 crore. They explained that such a move could “trigger” complications with previous investors. Ritesh, thinking creatively, proposed a solution. He suggested splitting the equity into advisory shares to avoid any disruptions to the company’s cap table. This proposal ensured that earlier investors’ stakes remained unaffected.
The founders accepted the revised offer, leaving the tank with a strategic deal. It was a moment of triumph for Ecoil, securing both financial support and valuable mentorship. Ritesh and Chirag’s belief in the company’s mission stood out, showing that innovative thinking can pave the way for sustainable growth.