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Dragons Den UK S23E03

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00:01The doors to the den are open for business, a place where fortunes are made and futures are forged.
00:10But this time, the game has changed.
00:13A fresh wave of fierce investors are out to shake things up and steal the deals.
00:22Tonight.
00:23I'm Susie Ma and I'm the founder and CEO of Tropic Skincare.
00:27Having scaled the heights of the beauty world, she's now investing in the future.
00:32Welcome to the den.
00:33Thank you so much for having me. It's a pleasure to be here.
00:37Tropic has been one of the top 100 fastest growing businesses in the UK.
00:41That's what I'm looking for.
00:43I started when I was 15 years old with one product that I sold at a market store to help support my mum.
00:49How much do you want this to work?
00:51By the age of 17, I was able to put a deposit down on a house for her, and at 21, I paid off her mortgage.
00:58I'm getting emotional here.
01:00I then went on The Apprentice.
01:02Are you listening to me?
01:03No, I am listening.
01:05Because I'm telling you, I know about this business.
01:07Didn't win.
01:08Susan, I'm afraid to say you're fired.
01:11But got an investment anyway from Lord Sugar.
01:13And about three years ago, I bought his shares back to be the 100% owner of my company again.
01:18When I look into the eyes of the entrepreneurs, I want to see real passion.
01:23I really like you.
01:24I'm looking for that entrepreneur with that seed of an idea that I know I can invest in support to make it something amazing.
01:32The pressure is on, and the dragons are sharpening their claws.
01:46I'm Tanika.
01:47I'm Olivia.
01:48We're sisters and co-founders of Cubby.
01:51Cheers.
01:53We're taking another entrepreneur into the den with us.
01:56I'm currently 38 weeks pregnant and booked in for my C-section next week.
02:01You're making a bump work for you.
02:03This is our money maker.
02:06I'm really excited to see what Susie has to say as a new dragon.
02:11I think we look really good together, guys.
02:12Do you know what?
02:14We're doing navy, white, navy, kind of white, navy brown.
02:18Almost like we phoned each other last night and said...
02:21She's just had a baby, so I think this might be a good one for her.
02:26I'll try not to go into low-bar.
02:41Students have uni days.
02:43Key workers have blue light card.
02:45And now new parents have Cubby.
02:48I'm Tanika.
02:48This is my sister Olivia, and we're the founders of Cubby, the money-saving platform for new and expecting parents.
02:55We're here today to offer you a 10% stake in our company in return for £50,000.
02:59We started building Cubby when my son was just eight weeks old, and I was hyper-aware that my salary was taking regular downward turns while on maternity pay.
03:09The things I'd usually do to make myself feel normal, like a cup of coffee in my favourite coffee shop, or a pair of new jeans to fit my changing body, were now riddled with guilt.
03:19I found myself spending hours searching for discount codes and deals to make my budget stretch as far as possible.
03:25And that's why we built Cubby.
03:27Cubby works in a similar way to other multi-million pound discount platforms, offering verified new parents exclusive discounts across their favourite brands.
03:36Since we launched just over a year ago, we've amassed nearly 20,000 followers on social media, almost 12,000 app downloads, and have partnered with over 100 brands.
03:46Our app is free for new parents to use, and our business model is based on commission paid to us by brands when users shop via our app.
03:54The market opportunity here is huge. Nearly 700,000 babies are born in the UK each year, and we estimate their parents are spending a combined £20 billion during their year on parental leave.
04:08We're now ready to scale our business, and we'd love to partner with the Dragon to help us achieve our ambitious goals.
04:16A fledgling discount app, designed to ease the financial pressure on new parents, is the offering from sisters Tanika and Olivia Davison.
04:30The entrepreneurs are seeking £50,000 for a 10% share of their business.
04:36First, to dive into the details, is Peter Jones.
04:46Tanika, Olivia.
04:47Hi.
04:47Hi.
04:48Great pitch, great opening pitch. Totally get what it is.
04:53However, it immediately put a ceiling on the opportunity when you said that it's only available to new parents, and you gave me the stats, 700,000 per annum.
05:02Yeah.
05:02Why would you restrict it to that level?
05:06We decided to target new parents in the beginning, because, first of all, from a marketing perspective, it's really easy to kind of find that niche group and target it to them so they understand what it is.
05:18But this is just the initial phase of our business, and we certainly want to expand to have older parents as their children grow as well.
05:25So, at the moment, what's the revenue on this?
05:30What does that look like?
05:31Yeah, so we do consider ourselves pre-revenue.
05:34So, the year ahead is our year one.
05:36We're looking to generate £20,000.
05:39Year two, we will generate £160,000.
05:44Revenue.
05:44In revenue, yes.
05:45Revenue, yeah.
05:46And year three, we'll start making a profit.
05:50So, we will generate £600,000 with a profit of £190,000.
05:56And excitingly, looking ahead to year five, we're looking to generate £5.5 million with a net profit of £5 million.
06:06And, I know that's it, actually, for a moment.
06:13I think you've got a great idea, but you're not capitalised on it.
06:20I've got four or five baby brands, so I know that market very well.
06:24And, in my view, there are loads of baby brands, children's brands out there who are willing to give discounts, coupons, discount codes.
06:40But it's underutilised in the sense that I think there's an opportunity for you to specialise in, let's say, age 10.
06:50And, I think you're limiting yourself, just talking about new parents.
06:57Completely agree.
06:58I think what we're trying to do now, as Taneika mentioned, this is our entry into the market.
07:03And, absolutely, we're looking to expand to parents of older children.
07:07But you're putting barriers.
07:09You see, I think if I was to advise you, I would say, open the barriers up, guys.
07:15You'd be the number one stop shop for discount codes for baby brands.
07:22So, our brands on board are much broader than just baby and kids.
07:26That's such a small element of our...
07:27We want to offer discounts across everything.
07:29So, whether it's your takeaway or your jeans for you or your new computer, it's anything.
07:37Too complicated.
07:38Well, it's a model that works already for student discounts.
07:41So, what would you expect?
07:44You're focusing on newborn babies and you're talking about everything.
07:47Gee, you see...
07:48We're not focusing on new mums.
07:50We're not focusing on new babies.
07:52We're focusing on that period of time where a new mum has had a baby.
07:55She's lost who she is.
07:56She can't go to her favourite coffee shop.
07:58She's feeling guilty about buying a pair of jeans.
08:01So, although we know we're not solving the problem in its entirety,
08:05we're sort of lightening the load for new parents.
08:07I can completely relate to that.
08:09Like, new mums want to know about, I don't know, a discount off of a yoga app
08:13that you can download to help them feel better.
08:15It's about well-being.
08:17Sucks you in a little bit and makes you feel more confident.
08:20There's so much.
08:20Getting your hair done, getting your make-up done.
08:22You can just come out with that.
08:23A little massage.
08:24I thought I did in my face.
08:27I love this.
08:28I love that it's for new mums.
08:30I really, really do.
08:31You've got some very ambitious targets for the next few years, which I love.
08:35Tell me how you're going to be going to $5.5 million in revenue in Year 5.
08:41Yes, in Year 3, we're going to look to open up our platform to parents of older children.
08:47And we estimate about 35% to 45% of parents will stay on with us.
08:52We're looking to do it at that stage because at that point,
08:54we feel like we'll have a significant amount of brands
08:56where the value for new parents makes sense for them to want to continue on our platform.
09:01Amazing.
09:03Tanika, Olivia, I really like the concept.
09:06I think you're right to be focusing on that new parent niche, especially at the beginning.
09:10So if you get the £50,000 today, what are you planning to spend it on?
09:15So majority of that will go on marketing.
09:19So we've seen really good traction on social media, Instagram specifically.
09:23So we would like to try and transfer that over to TikTok and make use of other social media platforms.
09:32And then outside of that, we think we've already started some conversations with the NHS.
09:36If we could find a way to get in their leaflet packs
09:39and just get in front of new parents at the point in time that they are finding out about their baby,
09:44that would give us the reach that we really need in terms of numbers.
09:47OK.
09:49Could I ask you a question?
09:50I know, because I've been desperate to get in there.
09:52Oh, sorry.
09:54Can I just ask, because you've both of you, you've answered your questions really eloquently
09:59and really knowledgeably.
10:00What industries are you currently in?
10:02What industry are you in at the moment?
10:04I work in financial services.
10:05Financial services and...?
10:07I work in the world's biggest e-commerce platform.
10:10And I'm in engineering project management.
10:12Well, that starts explaining it.
10:13Because, you know, you clearly have an in-depth knowledge of...
10:17You haven't just thought, well, this is a great idea.
10:19And working out how you do it, you clearly know how to do it.
10:26This is like a movie, this is.
10:28This is like a movie with no script.
10:31And you have another job.
10:33And you've got a dream.
10:34But at the end of the day, back to reality.
10:38And the reality tells me you're going to need a lot of money.
10:41I don't think we will.
10:45We know how much money we think we'll need.
10:47And this is why we've focused on a small niche.
10:49This discounts element of our business has super high profit margins.
10:55You're fantastic.
10:56But the reality is, how do we take this from where it is today to a proper business?
11:03Yeah, yeah.
11:03And how do you take that leap and commit yourself full-time to this?
11:09You have to take the leap.
11:10We're ready, and we're ready to do that now.
11:12Yeah, we are doing...
11:13Like, the thing is, the reason that we haven't grown more is because we don't have the time.
11:17So we both need to focus on this full-time.
11:20And we are going to do that.
11:21And we're going to do that.
11:22And we are doing it.
11:22So you're both leaving...
11:23Are you leaving your jobs to do this?
11:25Yes.
11:26Are you?
11:27Wow, that's massive commitment.
11:30A massive risk.
11:31We know that.
11:32But I think in a year's time, if we're still in this place here because we haven't been able to put the hours in to make it something, I will kick myself.
11:40But I would never want to put anybody in that position if they're going to give up their job because they believe in it.
11:48And they're struggling at the back end.
11:50That's not what I want.
11:50So, Tika, whether you invest or not, we're giving up our job.
11:53We're going to raise money for this business, and we're going to deliver it.
11:56So you can either be in it or not.
11:58And also...
11:59Yeah, yeah.
12:00Absolutely.
12:01Right.
12:02Guys, I'm going to cut across here because you just made my mind.
12:08Listen, you two are really, really, really good.
12:17And so I am going to make you an offer.
12:21And I absolutely assure you it's down to you two.
12:23So you've asked for £50,000 for 10% of the business.
12:30I'm going to offer you all of the money.
12:34And I want 20% of the business.
12:37You're very early stage.
12:39Yes.
12:41And Tika and Olivia, I'm going to follow on straight away because you are both incredibly, incredibly good.
12:50However, this is not sort of what I would class as my sort of wheelhouse.
12:55Okay.
12:56So I'm going to say that I'm out.
13:02Um, this is going to take quite a few years.
13:07It's not a 12-month project.
13:09You're not going to wave a magic wand and change it.
13:12And for that reason, I'm out.
13:13Thank you, Tika.
13:15Thank you, Tika.
13:18Tika, Olivia.
13:20I've really enjoyed watching this.
13:21It's been so fun.
13:24And I think I've sat here trying to figure out whether I want to invest or I just want to be your friend.
13:30But $50,000 is a lot of money to spend on a friend.
13:35So, um, for that reason, I'm going to say that I'm out.
13:37But I wish you the very, very best for the future.
13:39And I feel so proud of you even though I don't really know you.
13:41So, well done.
13:43I think you're amazing.
13:49I really do.
13:50And, you know, when I look at what you're trying to do, it reminds me of how I first started in business.
13:58And sometimes you do have to put absolutely everything on the line in order to chase your dreams.
14:04And I would love to support you in that journey.
14:07And in my, my good, my...
14:11Sorry, I'm getting emotional here.
14:12My, um, my expertise is building a community.
14:16You know, a lot of people think that when you start up a new business, the most important thing is marketing.
14:22Yeah.
14:22But actually, I believe in the power of the word of mouth.
14:26Yes.
14:27And I've proven that, you know, in my business, I spend a tiny fraction of our everyday revenue on advertising, on social media, on any of that stuff.
14:36And we have built an incredible community of over 20,000 ambassadors that are active every single month buying our products and selling our products.
14:45And we've literally done that through word of mouth.
14:48Yeah.
14:48And I think the mummy and new parent community is so tight-knit.
14:51Oh, it's so tight.
14:52Yeah.
14:53So that's where I feel I can really help you at.
14:55So I am going to make you an offer.
15:01You ask £50,000 for 10% of your business.
15:05I'm going to offer you all of the money.
15:09And I'm going to go for the 10% that you've asked for as well.
15:12Thank you, Susie.
15:14Of course.
15:15That's amazing.
15:20Thank you, Deborah, and thank you, Susie, for your offers.
15:26We would love to accept your offer, Susie.
15:30Well done.
15:31Oh, my God.
15:31Can I give you all that?
15:32Oh, my God.
15:34Congratulations.
15:35Victory for Olivia and Tanika.
15:38Good luck next week.
15:41Well done.
15:43With new mum Susie Ma in their corner,
15:46their business has a nurturing start
15:48as the debutante dragon proudly lands her first deal.
15:53What happened?
15:57I don't know.
15:58I can't even remember.
15:59Yeah, it was good.
16:00And we're really happy to walk away with Susie.
16:04I don't usually high-five a competitor, but...
16:07Aw!
16:08You smashed it.
16:11Are you kidding me?
16:13I was being a bit sassy, wasn't I?
16:14Yeah, it was good.
16:16Don't mess with a pregnant woman.
16:19Unfortunately, I won't be celebrating with a glass of wine tonight.
16:22I will.
16:22Um...
16:23We just need to do a bit of the power.
16:40What was it?
16:40This one.
16:41Power stance.
16:42I'm Louise.
16:43This is Kate.
16:44And we're the co-founders of Craft & Crumb.
16:46Whatever happens.
16:49I don't know if it's engaging.
16:53Cookies?
16:54Yeah.
16:54You add water or an egg and you make your own cookies.
16:58So what's new?
17:00What's the twist?
17:01Yeah, I don't know why you just don't buy a cookie.
17:05We're lucky in the fact that we're still able to be friends
17:07and run a business together.
17:09It makes it more fun doing it with your best friend.
17:12There we go.
17:13Couldn't really wish to do it with anyone better.
17:15Hello, Dragons.
17:27I'm Louise.
17:28And I'm Kate.
17:29And we are the founders of Craft & Crumb.
17:31We're on a mission to make home baking more creative,
17:35more connected and way more fun.
17:38We're here today looking for £100,000
17:40in exchange for 3% of our business.
17:43Kate and I met when our kids were little.
17:47Kate was one of those mums who loved baking with her kids
17:49and was very good at it.
17:51I, on the other hand, was not.
17:54So many parents are looking for creative opportunities
17:57and fun things to do with their kids.
17:59But often, they can find it very overwhelming.
18:02I just wanted a simple baking kit,
18:04one that contained everything that was needed
18:06and was well thought through.
18:11That's you.
18:11That's when we realised we didn't just want to improve baking mixes.
18:17We wanted to create an amazing experience,
18:19something that felt exciting, creative and tasted delicious.
18:23And Craft & Crumb was launched in 2016 from My Kitchen Table.
18:26We started with baking kits
18:29and then we went on to launch our baking kit party bags.
18:33As there were so many parents like ourselves
18:34who were fed up of our kids coming home from a party
18:37with yet another plastic bag full of tat.
18:40Then lockdown happened.
18:43And of course, baking became the nation's favourite pastime.
18:46Our business boomed.
18:48We moved into a fulfilment centre
18:49and launched into John Lewis, Ocado and Selfridges.
18:52In the past two weeks, we have just launched into 230 Tesco stores
18:57on their accelerator scheme, which is a major milestone for us.
19:00Thank you very much.
19:02We'd like to invite two of you to come decorate a biscuit.
19:06What about our guest dragon?
19:08I'd love to.
19:09As someone who never bakes.
19:10So, who's going to come and join Susie?
19:13All right, I'll do it.
19:14Let's do it, Stephen.
19:15Right, I'll do it.
19:18A children's home baking kit with clever crafting added in
19:22is the offering from Kate Horne and Louise Nicholson.
19:27This is my RA level.
19:30It's quite nice to have those two quiet for a minute.
19:33The entrepreneurs are seeking £100,000.
19:38Deborah, I've finished.
19:40That's amazing.
19:45I'm never eating that.
19:46That's going to be framed and that's going on my wall.
19:49And that's a happy face because we're all happy to be in the den.
19:54In exchange for a 3% share in their business.
19:58Oh, wait, hang on a second.
20:00Hang on a second.
20:00All right, let's see.
20:02What have you done?
20:03OK, sorry.
20:03Oh, you, I will never trust you again.
20:08Cheat.
20:08We do, in fact, have a little something for each one of you.
20:12Wow.
20:15Stephen Bartlett may not be playing by the rules.
20:19I can't believe you thought I did that.
20:21I did it.
20:22Stephen, I was shocked.
20:23But a more obedient Susie Ma is ready to get down to business.
20:30Louise and Kate, first of all, congratulations.
20:37What a gorgeous business.
20:39I love the branding.
20:40I love the animals, the creativity, the fun side of it.
20:43Help me understand about the actual product itself in terms of the cookie that is made.
20:47Because I'm looking at your ingredients and I'm seeing flour and caster sugar.
20:52Do you have a range with slightly healthier alternatives, like brown flour, whole grain flour?
20:59So, we are mums.
21:02We've got five children.
21:02We're health conscious.
21:04We care what they eat.
21:05It is definitely important to us.
21:06We're not marketing this as something that we eat every day.
21:10It's a creative activity with a treat at the end.
21:13But what we'd love to do is have a more health conscious range.
21:17We'd have an allergy sensitive range.
21:19We've got loads of ideas.
21:20But at this moment with the resources that we've got, we're concentrating on this.
21:25But it's absolutely something that we would love to do in the future.
21:29I suppose if I was shopping for this kind of product, what is the reason why I would buy your product over your competitors' products?
21:36So, our product, we spend a lot of time working out what that creative bake is.
21:41So, you might find our competitors are make a cupcake and then put a wafer on it.
21:45For us, you're making leopard print biscuits, you know, burger and chips out of cakes.
21:49We also have, obviously, the craft activity that's on the inside of the box.
21:52And we know that our customers are quite happy to gift our kit just as much as have it and use it with their own children because it's premium and it's design-looking.
22:00So, your point of difference isn't necessarily the final product itself, but the experience, the fun of it in making that product.
22:09Okay.
22:11Now, £100,000 for 3%, you must have knocked it out of the park.
22:19This must be a great business and making lots of money.
22:22So, tell me about that.
22:23What's, last 12 months, what have you turned over?
22:25What's been your net profit?
22:27So, last 12 months, we turned over £1,065,000 with a net of £66,000.
22:35£66,000.
22:36Yes. Okay. And the year before?
22:38And the year before that, we turned over £905,000 with a net of 44.
22:43Okay. And what's the forecast for this year?
22:46So, this year, we are forecasting £1.5 million and £15,000 for our net.
22:52£15,000?
22:55Yeah.
22:56So, you're going to make £15,000 and you're valuing a business over £3 million.
23:00So, this is our tough year because this is our big year of scaling up.
23:03So, this year, we launched into Tesco, but over the next couple of years,
23:07we intend to be in three and then five supermarkets over the following years.
23:10So, in year two, we were looking to take £3.2 million with a net then of £200,000.
23:19Right.
23:21You've done well, haven't you, to think you can get a valuation of £3 million away?
23:25Well, we look to say that we have 10 years.
23:27We've been going for nearly 10 years.
23:28Is that how long it's been going?
23:30Nearly 10 years, yeah.
23:33Louise and Kate, we play a game before you walked in,
23:39which is we try and guess what it is just from looking at it.
23:42And we all knew what it was, so there was a silence.
23:45Actually, the silence was because we were trying to figure out what the twist was.
23:48What was the innovation here?
23:49And you walked out and you basically revealed that there isn't really a twist to this business.
23:55It's a home baking kit.
23:57Part of the issue with that is that alludes to the fact
24:02that this is an incredibly competitive market.
24:04And so I wasn't surprised to then hear that when we look at your top-line revenue growth,
24:08it's about 10, 15% a year.
24:10So as an investor, I need to see a growth profile to indicate to me that there is defensibility here and the idea.
24:17There's some kind of innovation here.
24:19And as I've looked and I've looked and I've looked and Susie asked you a question,
24:22the point of innovation is it's more fun.
24:26Now I have to then sit here and figure out if that's a big enough value proposition
24:30and a defendable enough value proposition and one that your competitors also aren't saying
24:34when they market their products for this to take off.
24:37And I don't think it is.
24:40So I'm going to say that I'm out, but I wish you the best.
24:45Kate and Louise, I mean, this is really difficult.
24:50But in terms of the...
24:51You've done really well to create a product and you've done it from your kitchen
24:55and then now you've got a business.
24:57You've done really well to get into supermarkets.
25:00But I think your 3 million valuation is just ridiculous.
25:03There's no question that this business is worth nowhere near that.
25:06In fact, I would question if it's even getting up to the seven-figure level.
25:11You are great entrepreneurs and you've done a brilliant job getting to this point,
25:16but I don't think it's an investment because I don't think I'm going to get a return.
25:20I think you're going to need a lot more dough.
25:23And on that basis, it can't get an investment from me today, so I'm going to say that I'm out.
25:29So, all I can say to you is, it's time to review your whole business.
25:39Do not plan big expansion, but caution, focus, and consolidate.
25:48I wish you all the best, but today, I'm not going to part with £100,000.
25:53So, for that reason, I'm out.
25:54Louise and Kate, I really commend you for what you've done.
26:04I mean, if you have a look at what you've created in your business, you've generated millions.
26:08But what concerns me the most is that for a business that has been going for 10 years, you're ending with £15,000 profit.
26:19And the valuation that you have set is not reflective of your actual business because the profit is not there.
26:27And so, for that reason, I'm out.
26:33So, I'm going to tell you where I am.
26:38I think this is a business for you.
26:42And it's sometimes businesses do take a while to grow.
26:46It can take some time to do that.
26:48And then suddenly you wake up and think, oh, my goodness, we've really got something here, which is what I suspect happened to you.
26:53It started off as, oh, well, let's do it.
26:55Let's make a bit of money.
26:57And now you're thinking, wow, we can do this.
26:59But I think it's for you.
27:00You're smart.
27:01You can do it.
27:02You've done it already.
27:03You're good.
27:05I think you'll have a great business.
27:06But I won't be investing.
27:08I'm out.
27:10Thanks very much.
27:11Good luck.
27:11Good luck.
27:12Thank you all for coming in.
27:16That's it for Kate and Louise.
27:19Their hard work earned them admiration from the Dragons.
27:23But their limited profits proved a hurdle too high for a deal to be made.
27:28We obviously didn't get investment, but the Dragons gave us great feedback, actually, which we will take on board.
27:33Absolutely delighted with ourselves, really interested, worthy of patting ourselves on the back.
27:37I hope they understand how well they have done.
27:40Yes.
27:41Yeah, a million pounds.
27:42I suppose that's the way a cookie crumbles, isn't it?
27:44Yeah.
28:00Okay.
28:01Green light, time to lift.
28:02Ah, do you want...
28:03Yeah.
28:04Yeah, I don't even want some water.
28:05I'm Richard.
28:06This is Erica.
28:06We're from Combo Closet.
28:08It's going to be good.
28:10Oh, baby.
28:11Oh, there's this.
28:12Okay.
28:14We're trying to make off-grid toilets more convenient.
28:16Everybody poops.
28:17Yeah.
28:19There's no pouring back now.
28:22Port-a-loo.
28:23Port-a-loo.
28:23Yeah.
28:24I think these are quite versatile, though.
28:25They're not just for camping.
28:27Everyday use.
28:28Stuck on the M6.
28:29Oh, right, in your car.
28:30Could have done with that about three hours ago.
28:35I'm so nervous.
28:37And I'd like to smile.
28:38Everybody poops.
28:39Hello, Dragons.
28:51My name is Richard.
28:52I'm the CEO and co-founder of Combo Closet.
28:55Hello, Dragons.
28:55My name is Erica.
28:56I am the co-founder and head of marketing at Combo Closet.
28:59So often, we experience off-grid toilets as a dirty, inconvenient chore.
29:04Combo Closet is looking to revolutionize off-grid sanitation.
29:08It started in 2020 when I installed a market-leading composting toilet in my camper van.
29:13And I found it so much less unpleasant to empty than a regular portable toilet that uses chemicals.
29:18However, I saw a lot of room for improvement, and in 2021, we crowd for the Cuddy, which was the portable composting toilet specifically designed for camper vans.
29:27So Cuddy is a composting toilet.
29:29It uses a compost process in order to break down your number twos.
29:32Yeah.
29:32They all use urine diversion to separate them out and stop the formation of sewage.
29:36But with Cuddy, you actually add a carbon-rich material to it, and it starts breaking down that number, too.
29:42Our latest product is the S1 Sealer.
29:44It is a dry, flush toilet, and that seals waste in a compostable or a plastic bag.
29:52So far, the business has been doing very well, and last year's turnover was just over £700,000.
29:57We sell primarily direct-to-consumer in North America, US, Canada, and the UK, and we have distributors in Australia, New Zealand, and Germany.
30:05We're currently looking for £100,000 for a 3% stake in the business.
30:11I'll go into a quick demonstration of each product, if that's OK.
30:14Not quite a live demo.
30:16Not a live demonstration.
30:20A range of composting toilets, which break down waste without water or chemicals, are the proposition from Richard Peter and Erica Pugh.
30:31So this is our first product.
30:32It's Cuddy.
30:34It's a urine-diverting toilet, and they work by separating solids and liquids with a urine-diverting seat.
30:42Inside, there's an agitator, which makes it self-contained.
30:46So what you would add is the sawdust or Coca-Cola at the start, and then you mix it after each use, so you don't make a mess.
30:52The pair are seeking £100,000.
30:56Cuddy Light has all the same features, but we took away the poo-mixing, so you would pre-bag it and add sawdust after each use.
31:03In exchange for 3% of their company.
31:07And lastly, we have the S1 sealer.
31:10This is a dry-flush toilet, and it has all the same features.
31:15However, when you press flush, it will kindly seal the waste in a compostable bag.
31:23The entrepreneurs have already lifted the lids on their products.
31:29Now it's time for the dragons to lift the lid on their business.
31:32Richard and Erica, hi.
31:40Hi there.
31:41Absolutely looks fantastic.
31:46But is it comfortable?
31:48Try it.
31:48Try it.
31:50Just keep your trousers on.
31:52Yeah.
31:54He's quite tall, isn't he?
31:56Is that how you...
32:00You're riding it like horses.
32:02I had to reverse in.
32:04I feel like we're in a bigger one.
32:06Is that how you...
32:06Can you close the curtain?
32:08Well, you've got to get the thing in, haven't you?
32:11Oh, yeah.
32:12Oh, my God.
32:13No?
32:15Am I the only one with that issue?
32:16I think you probably want to be a bit further back in the tent, but it's a loo with a view.
32:19Look at it.
32:19You're good.
32:20It's quite small.
32:21Yeah, it's low.
32:22It's designed to go under a bench seat.
32:24Do they come in bigger versions?
32:25That's what we want to...
32:26That's exactly what we want to develop next.
32:28A full-size version.
32:28A full-size version, yeah.
32:29Okay, because if I was to invest, I think I'd need a bigger version.
32:31If that's all right.
32:33Just for you.
32:35Hi, guys.
32:37I used to know a lot about composting toilets, because I was looking at putting them down by my stables.
32:42But when you're talking, sort of bits of that are coming back, but I've lost the whole picture.
32:47So, can you talk about the IP?
32:50Do you have any protection on it?
32:52The specific IP within Cuddy is the extending agitator.
32:57So, typically, they would have them on the side, and that requires a lot of space, whereas we put ours on the front, where you always have to wear access, because you've got to sit on it.
33:05And it extends.
33:06That means that it's more compact for a camper van.
33:11It's patent pending.
33:12We haven't pushed it to grant.
33:13We pushed it to...
33:15Do you want to put the lid down as well?
33:16Oh, thank you.
33:18Yes, Mum.
33:19We haven't pushed it to grant.
33:24We've filed it internationally in America, Australia, Europe, and the UK.
33:29OK, got it.
33:32Hi, guys.
33:33Can I get a confirmation on your revenue and profit?
33:37So, you said it was 780, was it, revenue?
33:40700.
33:41705, yeah.
33:42705 revenue.
33:44And what's your net profit?
33:45Net profit this last year was £75,000.
33:50OK.
33:51And what are you forecasting for this next year, this upcoming year?
33:54The target for sales for this year is £1.2 million sterling.
33:58Yeah.
33:59We're at about £415,000 in revenue.
34:03And what are you forecasting for the end of the year in terms of profitability?
34:06I would expect, for the end of the year, a £300,000 loss.
34:12OK, so I'm trying to figure out if I invest £100,000, which is a lot of money, for 3%.
34:17You know, I have to do the math to figure out if I can get a seven-figure return on that investment over time.
34:26So, give me the big picture vision of how big this business can get, and then just detail for me how it gets there.
34:31So, with the growth of the business, in the next two years, we're planning to achieve a £4 million turnover.
34:40And the profitability there?
34:41I would expect profitability closer to £1 million.
34:45So, if you have £1 million of profit, and I have 3% of the business, how much am I going to get paid as a dividend that year?
34:53Nothing.
34:53We'll reinvest it.
34:54The real growth for the business isn't just, like, next year.
34:59We're looking for investors that are in this for longer term.
35:03We want to start with this model on the S1, prove that it works, and then make a larger model to take on, like, 5%, at least 5% of the RV market.
35:13So, when do you think I get my money back in a multiple?
35:16Is there a year?
35:18I would say...
35:20A long time.
35:20I reckon you'd be talking seven years.
35:26I guess all of this is contingent on this being so unique and such a better solution that people will continue to choose this over the alternative.
35:34So, I have to turn to our portable poop connoisseur, Debra Mead.
35:38How different is this in terms of...
35:41I think my question would be, in the RVs at the moment, the toilets look a lot more like toilets.
35:47Yeah.
35:48So, they're full-size toilets, and they are basically plumbed in.
35:52They're toilets.
35:52Yeah.
35:53Yes.
35:53So, I think there's two issues here.
35:55One is the consumer behaviour, because that doesn't have the same experience.
35:59But the second one is, and having worked in the caravan industry, trying to get them to change the layouts of blinking caravans,
36:08and, oh, my goodness, it's hard, because their whole manufacturing process is built around putting in normal toilets in plumbed-ins of tanks.
36:18I didn't give you a lot of hope there, did I?
36:20No.
36:20So, for that reason, I'm going to say that I'm out.
36:22OK.
36:23But I wish you the very best.
36:25I just can't see how I'll be able to get a return on that basis, so thank you.
36:30Richard and Erica, it sounds like you're very passionate about this subject, but as an investment, I'm only taking a three-year view at the moment.
36:49Not taking a seven-year view, unfortunately, you know, because I get offered lots of investments, and I can get a much better return.
36:57So, for that reason, I'm out.
37:00Guys, look, you clearly know your stuff, and I really commend you for that.
37:08Unfortunately for me, this is not an area that I'm passionate about, and I don't think I'm the right dragon for you guys.
37:13So, for that reason, I'm out.
37:18Richard and Erica, I think this is absolutely brilliant.
37:24I think that you both have presented really, really well.
37:28Richard, you're nervous, and yet you're quirky.
37:31As a character, you'd be amazing, both of you, to work with.
37:34I think you'd be refreshing, and I'd like to be given that chance.
37:37If you'd come in here in 12 months' time, and you had your patent, and you had everything teed up, and this was a purely, sort of, let's say, more advice-led investment,
37:57I think the offer of 100,000 at 3% would be right, but I do think that you're over-evaluing at this moment what you've got.
38:06And that's why I'm going to make you an offer of all of the money, but for 20% of the business.
38:1320% Jones.
38:1820%?
38:19And I'd also be willing to share that.
38:26They wanted three.
38:28Well, it doesn't matter what they want.
38:29I actually, I think that's a fair offer.
38:32I tell you what I say, I tell you what, I like what you do, but I also understand the journey you've got ahead of you.
38:38What you've got going for you is people are becoming increasingly concerned, particularly people who jump into their RVs and travel around, particularly concerned about the environment.
38:56You better not make an offer after telling me this had no hope.
39:01I didn't.
39:02I answered your questions, honestly, and I stand by those answers.
39:08Do you know what?
39:20I'm not going to make you an offer, because I can't see, for me, that it's an investment that I'm going to get a reasonable return on in a reasonable amount of time.
39:30So I'm afraid I'm out.
39:32Thank you very much.
39:38So 20% is obviously a big chunk of the business.
39:45Do you have connections with the RV industry and those manufacturers, or do you have connections of connections?
39:49No.
39:50No, I wouldn't want to oversell that.
39:52I don't have those direct connections.
39:54Okay.
39:54However, we do have the ability to open doors that perhaps were closed previously.
40:01Okay.
40:04I think...
40:04Let me see.
40:07I think we're going to decline the offer.
40:09I do appreciate the offer.
40:11We believe we'd like to continue to try and grow it ourselves and see where the journey takes us.
40:20Good for you.
40:21Good for you.
40:22Do you know what?
40:22I completely respect that decision.
40:26So on that basis, I have to say that I'm out.
40:29But good luck to you.
40:31I hope it all works out.
40:32Good luck.
40:33Richard and Erica must leave the den without a deal.
40:46Okay.
40:48The gulf between their ask and Peter Jones' offer...
40:52That was fun.
40:55Proving too wide to bridge.
40:58I think we would have gone to maybe 10% or something, but I think 20% wasn't what we expected.
41:03as far as giving away the equity.
41:0620%.
41:06Wow.
41:07We wanted a dragon, but not at that price.
41:10I had to go in at a much higher level than they were offering.
41:14Honestly, Peter, that is the fair offer.
41:16They have got massive obstacles ahead of them.
41:19Yeah.
41:19So, we're here.
41:37This is it.
41:38I'm Thomas.
41:39This is Martin.
41:40And we're from Only Cat.
41:41We got this.
41:42We got this.
41:43Jinx really came up with the idea.
41:47Jinx is my cat.
41:48She started bringing in lots and lots of mice and birds in the middle of the night,
41:53and I had to do something about it.
41:56This is like got Deborah Meadon written all over it.
41:58Do you have cats, Deborah?
42:00I do have cats and dogs and horses and geese and sheep.
42:03Got a whole zoo at your house.
42:06I love it.
42:08I'm feeling both excited and, yeah, obviously a little bit nervous.
42:15It's a great opportunity to showcase what we've spent the last three and a half years building.
42:21Let's see if they like it.
42:22Hello, dragons.
42:36My name is Martin.
42:37And I'm Tom.
42:38We're brothers and the founders of Only Cat.
42:40We've created a smart AI-powered cat flap designed to stop your cats bringing home prey.
42:47This is Only Cat.
42:48The built-in AI-enabled camera screens your cats upon entry.
42:54If prey is detected, the door remains locked.
42:57We even send video alerts to your phone so you can see the foiled attempts.
43:01The feedback from the Only Cat community is phenomenal.
43:06They say it's worth every penny, even at our £450 premium price point.
43:12The pet tech market is booming.
43:14And we've already raised over £750,000 in pre-orders.
43:20And we're here today looking for £200,000 investment in return for 4% equity in our business.
43:29We'd love to do a demo of the product to show you how it works.
43:32Great.
43:32A 21st century take on the cat flap is the offering from Martin and Tom Roszynski.
43:42So over here, I have the Only Cat app installed on my phone.
43:46So I'm now on the activity feed.
43:49So I'm seeing a list of all recent entries and exits, both from my cat, Jinx, but also from friends and family who have chosen to share their Only Cat devices with me so I can keep in touch with their cats.
44:03The siblings are seeking £200,000.
44:06So as Jinx approaches, the cat flap scans a face, detects that the cat is coming home alone, and the cat can pass through the cat flap.
44:17In return for 4% of their business.
44:20But now Tom has attached a fluffy toy mouse to the cat.
44:25The cat flap recognises what's happening, and the cat was not allowed entry.
44:29Fashion mogul Tuukka Suleiman might be more familiar with catwalks than cat flaps, but he's first to quiz the pair further.
44:41Right.
44:42Martin and Tom.
44:44So tell us about each one of you, what your background is, what your qualifications are.
44:50So get an idea.
44:52Absolutely, yeah.
44:53So we're both fascinated by technology.
44:55My background has always been electronics and software.
44:59Previously, I founded a company called Wolf, the world's online festival.
45:03That grew to be a business bringing in $10 million of revenue annually.
45:09My background is in mechanical engineering.
45:12As CEO of an engineering consultancy company that does problem solving and troubleshooting of vibrating machinery.
45:19So that business, we've got a turnover of $4 million.
45:22So at the moment, you mentioned that it's not cheap, £450.
45:30Yes, it's a premium product.
45:32How much does that box cost you to manufacture?
45:37We are looking at around £160.
45:46And your route to market is going to be online direct to consumer or is it a wholesale model or what?
45:53So at the moment, it is direct to consumer.
45:56Right.
45:57So give us some numbers.
45:58So your sales, your gross profit and your net profit.
46:01So last year, we had $352,000 revenue, $155,000 gross and zero net.
46:09This year, we are looking at $1.9 million turnover.
46:15We're now seeing weekly orders in the region of $30,000 and that has been growing on an exponential trajectory.
46:21So $30,000 a week?
46:22Correct.
46:22Yes.
46:23So $1.9 gross profit?
46:26$847,000 and $339,000 profit the net.
46:32Can we just look at your, I think it's really, I think it's obviously a really neat price.
46:41It's not something I would use to be perfectly honest.
46:42I don't have a cat flap and I let the cats in and out.
46:45But I completely get it.
46:47I think the price is quite racy.
46:48What would an electronic cat flap that allows me to let cats in and out, what would that cost?
46:54The most basic cat flap that can let only your cats in costs around £50.
47:01Yeah.
47:01Then there are connected cat flaps, which can cost £230, but we have the prey detection and also the camera.
47:09Okay.
47:10So let's talk about IP.
47:13What have you got?
47:14So we have a patent that's pending on the AI technology and the prey detection.
47:20And more fundamentally, we believe in the training data that's necessary to train the algorithms isn't easy to new entrants on the market.
47:28Okay.
47:28So I've got to ask you, you've got experience.
47:35You've got technical skills.
47:41Why do you want a dragon?
47:43Sure.
47:43So we want to accelerate our manufacturing.
47:47We want to reach more customers and really amplify the direct-to-consumer growth that we've been seeing.
47:55Yeah.
47:55But as I said, you have experience.
47:57You know how to make stuff and you know how to get it made.
47:59So my experience is in business-to-business, not business-to-consumer.
48:05That's a very different market.
48:07But you can manufacture.
48:08You're an engineer.
48:09Yes, but I would say, for me personally, what would be of great value is, for example, big box distribution to create those distribution networks to take our products.
48:22That's interesting, because you just said it was manufacturing and I'm just trying to get to the – you've just changed why you need –
48:27Manufacturing a consumer product at scale is very different to manufacturing low-quantity, bespoke products for advanced engineering applications, which is where the expertise lies.
48:37So we've figured this out as we've gone along so far.
48:43And in terms of telling the story, this is currently us wearing many hats, putting on a hat thinking, let's dabble with creating a video for social media.
48:50But we are not marketing experts.
48:53The whole mindset and know-how of how to tell that story optimally on social media is something we don't have.
49:01The dragons do.
49:02So it's – you want that so badly that you've asked for £200,000 for 4% of the business.
49:14We believe it's a fair valuation.
49:16If you look at our financials, the £750,000 in pre-orders, the trajectory that we're on to deliver millions of revenue in the coming years.
49:26And more important than that, you've actually got a run rate at the moment, or at the moment you're selling around £30,000.
49:31So that does underpin some value.
49:35I'm just trying to – I always have to feel that I understand the reason somebody is here.
49:42You're two smart guys.
49:43It's a really good product.
49:45I find it difficult to comprehend some of the things that you say you're missing, because I'm not entirely convinced you are.
49:53And then you overlay that with quite a racy ask.
49:58And I just – I'm going to sit quietly and see if I can get those slots to work.
50:02Martin and Tom, can I ask you a few questions surrounding the product?
50:09Sure.
50:09So I wonder if there is a wider wildlife benefit.
50:13If a cat is denied entry, if it has a rodent in its mouth, does it teach the cat to not kill rodents?
50:19So we can't be sure of that.
50:20So is there a benefit?
50:21But there is some initial data that would suggest that there is.
50:25I have to challenge that.
50:26What's the initial data?
50:27Where from?
50:28So we've seen a steady reduction in the attempts –
50:31You've seen.
50:32I'm looking for data.
50:33Right.
50:33So this is field data based on a deployment of 2,000 –
50:36Just observation.
50:39Sorry, I had to challenge it, because that's not initial data.
50:41It is data analysis based on – I can – there's an anecdote and then there's the data.
50:47The anecdote is my cat, who is bringing prey in three or four times a night.
50:52After installing OnlyCat, after a few months, that prey activity reduced to effect –
50:58Or they're killing it over there and they're not bringing it in.
51:00So there will be some of that.
51:02They will still continue to eat prey.
51:03But we have seen a number of cases from our customers where by preventing the cat from being able to bring in the prey,
51:11The prey has then managed to escape.
51:13So while we can't guarantee it, it does increase the survival odds of prey if they're not permitted to come into the house.
51:20Also, by sending instant alerts to the owners that the cat has prey – has captured prey and is at the door,
51:27that allows the owners to act and intervene and to save the prey.
51:33Guys, I really commend you for what you have created.
51:37I think you're both obviously very, very clever.
51:39And I definitely see scope for growth for this, and I see success in the future for the two of you.
51:45I think for me personally, £200,000 for 4% of your business is a big ask.
51:51And for that kind of money, I would need to be very passionate about that particular investment.
51:55And this is just not an area that I feel passionate in.
51:58So for that reason, I'm afraid I'm out.
52:00But I wish you the best of luck for the future.
52:03Thank you very much.
52:03Completely understand.
52:04Tom Martin.
52:10Yes.
52:10Hi.
52:11Hi.
52:12I take my hat off to you for the technology that you have.
52:14It's well thought through.
52:16You're both really investable as individuals.
52:18But I think you've got a very small opportunity at your price point and your point of entry.
52:25Very small.
52:28This is a product that's going to be not only specific to people that have cats.
52:32It's also specific to people that have got a lot of money.
52:35So I'm going to wish you well on your way and say that I'm not going to invest today and I'm out.
52:41Sure.
52:46Okay, let's, let's, let's, let us begin.
52:51Let's get the party started.
52:52Let's get the party started.
52:53I'm ready to watch this.
52:54Time is money and we've got some cat flaps to sell.
52:57Um, I think you've both done really well.
53:01And I think you've got something really cool.
53:04Debra asked you earlier why you were coming to the den.
53:06To me, it was abundantly clear.
53:08I look at this product and much of the game here is both to establish, I think, brand in market.
53:13So that any sort of new market entrants are held out by you being the dominant player, having the furthest reaching story.
53:20Um, and so it's, it's, uh, it's very much within my wheelhouse.
53:25I spent the last sort of 12, 15 years of my life understanding how to market products and from a DTC perspective.
53:34Um, so I'm going to make you an offer.
53:38This is going to be a great offer.
53:40This is going to be a really great offer.
53:42No, it's going to be a fantastic offer.
53:44I am really excited.
53:45I think it's a variety of times.
53:46I'm excited to hear it.
53:47No, no, no, because it's, um,
53:48We're at the edge of our seats.
53:50It's an unbelievable offer.
53:51You can just wait for this one.
53:53Um.
53:54Drum roll, please.
53:55Don't take all day.
53:57Yeah.
53:59You've asked for 200,000, for 4%.
54:01I'm going to offer you all of the money for 12 and a half percent of the business.
54:14Wow.
54:16Yeah, thank you very much.
54:20Look, you have got a very good offer.
54:23I mean, I wouldn't have, I mean, to me, um, there's a lot to do here because what you
54:32need is to create the reality to make this product accessible at the price point that you're
54:39going to knock the competition out because somebody else is going to come along and make
54:44a version of it at a much lower price, I would definitely bring sauce into the table and I
54:53would definitely bring that cost down for you.
54:56So, look, this is my offer.
55:01If another dragon is willing to join me, I would give you half the money.
55:05That's 100,000 pounds for 10%.
55:17Guys, so I think it's a great product.
55:21You guys are clearly very smart.
55:25And I actually think with some tweaking of price, you can bring yourself closer to the
55:29main market, then I think you'd have an exponential change to your market potential size.
55:37Um, I don't think Stephen's offer, I think it's a good offer.
55:43I don't think it's a crazy good offer.
55:46We would agree.
55:47Um, because I think that, you know, you clearly have shown that you've got traction now, you
55:53know, and it should carry on up.
55:55So I am going to make you an offer.
56:00But I'm not going to make this easy.
56:02I'm going to offer you all the money.
56:10And I, too, want 12.5% of the business.
56:16I did say I didn't think, I said to you, I didn't think your offer was unreasonable.
56:21That's what I said.
56:32So, thank you very much for the offers.
56:38We are leaning towards going with Stephen.
56:45But we came here thinking that our 10% is really our upper limit.
56:50And we wouldn't be able to go beyond that.
56:55Beyond that, yeah.
56:58So 10% is the limit?
57:0010% is the limit.
57:02Then you've got a deal.
57:08Well done.
57:09Thank you so much.
57:10Well done.
57:10Well done, guys.
57:11Thank you so much.
57:12Well done, guys.
57:13The cats have got the cream.
57:15Well done, guys.
57:18Martin and Tom leave the den with £200,000.
57:23Let's do this.
57:24And the backing of a dragon with the skill set to supercharge their socials.
57:30I'm very familiar with a lot of the work that Stephen has been doing.
57:34Working with him is going to be a pleasure.
57:37Well done.
57:38I told you it was a fantastic offer.
57:40Deborah, how do you feel about that?
57:41Well, if it was anybody else, but you know.
57:43Oh, that's so lovely.
57:47I've never seen you like this before.
57:48Don't trust me.
57:49I don't mean it.
57:50Next time.
58:04Tiny, good to see you, bro.
58:05I was shook when I knew you were coming because I knew you'd outdress me.
58:08You know, that was my whole MO.
58:09Forget the investments.
58:10I was like, I need to outdress this guy.
58:12Being really candid, I didn't find it that great.
58:15That's not true, Peter.
58:16If your friends' and family's money is already kind of down the hole, I'm sure mine will probably end up there as well.
58:22I would probably drive you guys crazy.
58:24No comment.
58:25No comment.
58:26I think you're a gift to humanity.
58:28I really appreciate it.
58:29Thank you, sir.
58:32Lord of the Flies, as you've never seen it before, a fresh take on the castaway classic watch on BBC iPlayer.
58:42As another struggle for power continues on BBC One, will food prove to be their forte?
58:48The Apprentice continues next.
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