In the latest episode of Shark Tank India, a mother-son duo from Raheja Solar Food Processing presented their innovative solution to tackle food waste using solar heaters. Their company focuses on producing solar-powered machines that dry fruits, vegetables, and flowers, preventing them from being discarded. The duo explained that every year, food worth an estimated Rs 90,000 crore is wasted globally, a staggering statistic they aim to address with their technology. The food processing industry, they pointed out, is valued at $4 billion, highlighting the vast potential of their business.
Seeking Rs 50 lakh for a 1% stake, the duo valued their company at Rs 50 crore. They revealed ambitious targets, expecting Rs 15 crore in revenue this year and a profit margin of 10%. Their business, however, does not solely rely on producing machines. They also sell dried fruits and vegetables, although this side of their business makes up only 10% of their total revenue. The entrepreneurs assured the sharks, particularly Kunal Bahl, that their primary income comes from selling the solar drying machines. They have partnered with organizations like Reliance Foundation and Tata Group to reach out to farmers struggling with the financial losses due to food spoilage. They pointed out that 15% of all agricultural produce is wasted annually, which contributes significantly to the alarming rates of farmer suicides in India.
Despite the compelling cause, some sharks were skeptical. Aman Gupta and Anupam Mittal decided to back out. Anupam, in particular, questioned the commercial viability of the business. He told the entrepreneurs that, while their work was admirable, it wasn’t a business at its core but more of a passion project. He warned that viewing it as a business could lead to failure.
On the other hand, Peyush Bansal and Vineeta Singh saw an opportunity in the business. They offered to jointly invest Rs 50 lakh, but at a reduced valuation of Rs 25 crore, half of what the entrepreneurs had originally hoped for. This offer was for 2% equity. Kunal Bahl, who took time to analyze the financials, also saw potential in the business. However, he wasn’t interested in small stakes and made it clear that he didn’t typically engage in deals offering just 1 or 2 percent. He presented two alternatives: the entrepreneurs could either accept Rs 2 crore for a 10% equity stake, or Rs 1.25 crore for a 5% stake. Both options valued the company at Rs 25 crore.
The founders, though appreciative of the sharks’ interest, weren’t ready to give up so easily. They countered the offer, asking for a Rs 40 crore valuation, as they didn’t want to let down their earlier investors. Vineeta and Peyush, who had already expressed their willingness to join forces, seemed ready to accept the founders’ counteroffer, but assumed Kunal wasn’t interested in collaborating with them. However, Kunal surprised everyone when he agreed to team up with Vineeta and Peyush. He suggested that the three sharks could jointly invest in the company, with a combined 7% equity share between them, which would allow them to maintain their terms while addressing the founders’ valuation request.
After careful deliberation, the founders accepted Rs 1.75 crore for 7%. The sharks assured them that the split would be managed in a way that maintained the Rs 40 crore valuation for older investors. With that, the deal was sealed