Shark Tank India 3 | Urban Space | Rohit Agarwal & Radhika Koolwal

Urban Space, a dynamic home furnishing brand, is revolutionizing the way households decorate their living spaces. With a diverse range of products and a commitment to quality, Urban Space aims to be the ultimate destination for all home furnishing needs in India.

Table of Contents

Product Offerings:

At Urban Space, we offer a comprehensive range of high-quality home furnishing products, including:

Bed sheets
Curtains
Table linens
Carpets
And more

With over 1200 SKUs available, our diverse selection ensures that customers can find the perfect products to enhance their home décor.

Convenience and Affordability:

Our products are conveniently available online, allowing customers to shop from the comfort of their homes. By eliminating the need to wait for seasonal sales, Urban Space provides affordable options for decorating homes year-round.

Convenience and Affordability:

Vision and Mission:

Urban Space’s vision is to become the one-stop solution for all home furnishing needs in every household across India. We are dedicated to offering innovative products and exceptional customer service to exceed our customers’ expectations.

Pitch Presentation

Investment Proposal:

With a solid foundation built on 40 years of textile manufacturing experience, Urban Space is seeking a 1.8 crore investment for a 1% equity stake in the company. With a valuation of 180 crores, this investment will enable Urban Space to capitalize on its projected revenue growth and further establish itself as a dominant player in the home furnishing industry.

Projected Revenue:

In the current fiscal year, Urban Space anticipates achieving a projected revenue of 45 crores. By October, we forecast reaching 29 crores in revenue, with a targeted additional revenue of 16 to 17 crores in the following five months. Leveraging our track record of success, we aim to surpass last year’s revenue of 20.5 crores, demonstrating our commitment to sustained growth and profitability.

Value Proposition:

Urban Space offers a wide range of high-quality home furnishing products, including bed sheets, curtains, table linens, carpets, and more. With over 1200 SKUs available, we provide customers with unparalleled choice and convenience. Our online platform ensures accessibility and affordability, eliminating the need to wait for seasonal sales to decorate homes.

Investor Q&A and Discussion Highlights | Urban Space's business model, market positioning, and financial performance.

Investor Question: What are your top product categories?

Urban Space Response: Our top categories are:

Curtains (40-45% of our business, 4000 SKUs)
Bed sheets (25%)
Blankets, table covers, and carpets (30%)
Other categories, including cushion covers and mattress protectors.

Investor Question: How do you differentiate from competitors?

Urban Space Response: We differentiate ourselves through:

Quality: Our products boast superior quality.
Speed: Thanks to our backward integration and efficient manufacturing setup, we ensure swift delivery.
Pricing: We offer competitive prices without compromising on quality. Additionally, despite a minimal e-commerce marketing spend of 6-7%, we achieve significant turnover entirely online.

Investor Question: Why such low spends on Marketing?

Urban Space Response:

Our marketing strategy focuses on maximizing impact with minimal expenditure. Over the years, we’ve identified our competition and strategically targeted keywords in our cataloguing efforts. Moreover, we conduct live shoots to provide customers with an authentic representation of our products. This approach has garnered us a high review rating of around 4.5 for most of our products.

Investor Question: What is your Approx. revenue breakdown for FY 2023-24?

Urban Space Response:

Own website: ₹6.5 crores
Amazon: ₹20 crores
Myntra: ₹8 crores
Ajio: ₹4.5 crores
Flipkart and Others: ₹1 crore

Total revenue: ₹40 crores, with a net profitability of 25%.

Unit of Economic Breakdown:

Average selling price: ₹1100
Cost of Goods Sold (COGS): 33%
Shipping and Commission: 17% (reduced due to waivers and rebates)
Marketing: 7%
Other Overheads: 5%
Returns: 12%
Average GST: 7%
EBITDA: 19%

Repeat Customers and Market Presence

Repeat customers:
- Marketplace: 25%
- Own Website: 31%
- Dormancy rate: 25% (75% return at some point)

Net Promoter Score (NPS):

NPS: 89%

Growth Plans and Strategies

Urban Space’s growth plans are ambitious and strategic, aimed at achieving significant milestones in the coming years:

1. Short-term Goals:

- Reach a 100 crore Annual Recurring Revenue by Diwali 2025.
- Expand product selection and brand presence both online and offline.

2. Long-term Goals:

- Achieve a topline of 1000 crores by 2030.

Strategic Initiatives:

Product Expansion:

Increase depth and breadth of product selection.
Expand into home décor and adjacent categories/products.

Branding:

- Increase focus on branding initiatives to enhance brand recognition and loyalty.

Team Development:

- - Invest in building a strong and skilled team to support growth and expansion efforts.

Market Insights:

- - Urban Space recognizes the changing dynamics of the industry, with decor shifting from functional to aspirational products due to lifestyle changes.

B2B Segment:

- - Last year’s total B2B business amounted to 12 crores with a 5% profitability, showcasing Urban Space’s diversified revenue streams and business partnerships.

These growth plans and strategic initiatives demonstrate Urban Space’s commitment to innovation, customer satisfaction, and market leadership in the home furnishing industry.

Investor Offers and Negotiation

Amit Gupta’s Offer:

- Investment: 1.8 crores
- Equity: 2%
- Royalty: 5% until 2.7 crores is recouped (1.5 X of his Investment)
- Valuation: 90 crores

Anupam Mittal’s Offer:

- Investment: 1.8 crores
- Equity: 2%
- Royalty: 3% until 3.6 crores is recouped (2 X of his Investment)
- Valuation: 90 crores

Both investors proposed merging the B2B business into one as a condition for their investment.

Decision and Counteroffer by Urban Space | Rohit and Radhika's Counteroffer:

Urban Space appreciates the offers presented by Amit Gupta and Anupam, but they express a preference not to have royalty attached to the investment. Their counteroffer is as follows:

Investment: 1.8 crores
Equity: 1.25%
Valuation: 144 crores

Urban Space justifies their counteroffer by emphasizing the profitability of their business and requests a valuation that reflects their success in the market.

Outcome:

Unfortunately, the negotiation did not result in a deal as the investors refused the counteroffer due to concerns about the valuation, business structure, and scalability. However, the Sharks wished Urban Space continued success in building a thriving brand in the home furnishing industry.