- 2 weeks ago
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00:00Tonight on Dragon's Den.
00:06Ahoy, dragons!
00:08Ahoy!
00:10I'm a biomedical engineer, and alongside a rocket scientist,
00:14we decided to become farmers.
00:16Okay.
00:17Makes sense.
00:18So the suits, you know, it's like our little fishing mullet,
00:22you know, like...
00:23You dress in for the job you want,
00:25which is part fisherman and part business person, right?
00:27Exactly.
00:28You may want to contact your lawyer when this is over.
00:31No, no, no, no, no.
00:32You've got to be careful.
00:33No, our lawyers are very good.
00:35Don't worry about it.
00:36We're all害 warnings to me when I'm out and your hands are wrought
00:42upon the wheel.
00:44I don't know how me watch out.
00:46Yeah, I don't know how long me I've been in.
00:49First to bring their business to the den.
00:51First to bring their business to the den.
01:00So we packed up an entire fishing hut.
01:02We've got lobster traps.
01:04We've got burlap bags of coffee.
01:06We figured we'd show them what we're all about.
01:08I believe that if you're going to do a thing, you do it with your whole heart.
01:14Ahoy, dragons!
01:15Ahoy!
01:18I'm Laura Richard.
01:19And I'm Brad Rideau.
01:21And we're the founders of Saltwinds Coffee from Fredericton, New Brunswick.
01:24And we're here today looking for a million dollars for 10% of our company.
01:28Wow, that's a lot of coffee.
01:29A million dollars.
01:30That's a lot of beans.
01:32Well, dragons, growing up in the Maritimes, I heard a story years ago about how when coffee
01:37first came to Canada, it came on wooden sailing ships.
01:40And back then, the warm, salty ocean air would soak into the beans during the journey.
01:44But I always wondered what that coffee must have tasted like.
01:47That's where I come in.
01:48I'm a scientist with a PhD in chemistry from the University of Oxford.
01:52Wow.
01:53I developed a method to infuse coffee beans with ocean air and recreate that historic
01:57taste.
01:58Whoa.
01:59Well, that's neat.
02:00We're riding a rising tide of sails and charting a course to new ports of call.
02:05So, dragons, are you ready to jump aboard with us?
02:07A hundred percent.
02:08You guys brought this from New Brunswick.
02:10We built it and I drove it up from New Brunswick over the last two days.
02:14How long did it take to get this here?
02:16Two days.
02:17Wow.
02:18That's commitment.
02:19It's a big trip.
02:20It's beautiful.
02:22The best way to taste the difference that ocean air makes in coffee is to try a cup.
02:26So, I'm going to make for you here a coconut-flavored iced coffee while Brad pours out some mugs
02:31of our hot ocean air dark roast.
02:34We can make really amazing cold coffees because as it cools down, it makes the coffee smoother,
02:39sweeter, and less bitter tasting than other coffees.
02:42Well, you're about to save the day.
02:44Fastest way to my heart is caffeine.
02:46Awesome.
02:47Can't wait.
02:48Mud milk for you.
02:50And there's your coconut iced coffee.
02:51This is really less bitter on the aftertaste.
02:54Right.
02:55That's actually a traditional dark roast, but it drinks kind of like a medium or a medium
02:59dark because of the ocean air infusion process.
03:03There's zero bitterness in this.
03:06Like, zero.
03:07This is a really smooth coffee.
03:09It's very, very good.
03:10And I sample a lot of coffee, trust me, so that's very good.
03:14I didn't get any sense, though, of salt or ocean flavor.
03:18Am I supposed to?
03:19No.
03:19The effect of our ocean air infusion process isn't to make the coffee salty,
03:23but to change the chemistry of the coffee.
03:26It takes the bean.
03:27But what's really unique about our process is it actually improves the quality of the
03:30coffee.
03:31So what helps us in this current climate of increasing prices is that we can take coffees
03:35that are less expensive, but then give them extra flavor and quality from the consumer's
03:40perspective.
03:41Where are your beans coming from?
03:43From Central South America, so Nicaragua, Guatemala, Colombia.
03:47So you get them from South America, the beans, and what do you do once you get them?
03:52Now, the process itself, we have several patents pending on this, as well as trademarks to
03:56protect what we're doing.
03:58But effectively, instead of beans being on a ship for months and months, we can do this
04:02in a matter of minutes in a scalable, repeatable fashion in our own facility.
04:06What does that look like?
04:07You're not simulating waves for the beans?
04:10It's about recreating the conditions that were on the ships.
04:12So, Laura, when you were in Oxford, did you think you were going to be doing this?
04:16No.
04:17But you've got to follow the opportunities that life puts in front of you, right?
04:21Just walk me through that.
04:22So I want to make sure I'm clear.
04:25So you're buying a lower-grade bean.
04:27Yeah.
04:28You're putting it through your process and then making it more premium as a result of
04:32that.
04:33Increased quality.
04:34It also is a great lesson for people who are watching as entrepreneurs that innovation
04:39can happen in any category, and often it is those older categories like coffee and other
04:45things that don't get innovated in.
04:48How much do you sell these for, for example?
04:50So this would sell for $22.
04:52So you're in a super, super premium category.
04:55We're in a premium.
04:56You are super premium.
04:57You're not just premium.
04:57You're super premium.
04:58It's pricey.
04:59Yeah.
05:00How much money have you invested in this business so far?
05:03Um, we personally have about $370,000 into this.
05:11Woo!
05:12Wow.
05:12That's a, that's commitment.
05:15And do you have any debt on the business?
05:17Any, any houses got mortgaged or anything like that?
05:19We sold our house.
05:20You sold your house?
05:20We downsized to something smaller, sold the second vehicle.
05:24That's a ton of investment that you put into this.
05:26Like, you're all in.
05:27Oh, yeah.
05:28Right.
05:28Do you guys have money in the bank right now?
05:30Not, like, our runway is very, very short, but we're, we kind of-
05:34How much runway do you have?
05:35Like, months.
05:36So I'm, I'm really curious about the sales side of it.
05:40$150,000, uh, first year, about $650,000 the second year.
05:45We just broke a million in gross sales this year.
05:50How much did you make on the $650,000 or lose?
05:52Uh, we lost about $150,000 on that.
05:58Wow.
05:58At the stage we're at, we can't afford to buy in large quantities of anything, right?
06:03So we can't get the economies of scale that start to make this profitable.
06:07So you clearly think your patents are worth a lot of money.
06:11Yeah, well, I mean, I can do some quick math for you on that.
06:14So the coffees we use, if you look at the bean pricing, this year they've doubled in price.
06:20Yeah.
06:21Yeah.
06:21So, you know, to a, to a big roastery, the large roasters, they'll roast 300 to 600 million pounds a year.
06:29So even if it was 10% of that value to them, that's a lot of value for them.
06:35But then would that mean you're, you're taking your technology and licensing it to sell it to someone else?
06:40Well, or a company.
06:42Or their company, yeah.
06:42Right, so.
06:43They'd sell, they'd, you'd sell the whole processing thing to someone else.
06:45Right, yeah.
06:46So why are you building a brand?
06:48Like, why not sell it to them or license it to them and make money at it?
06:53Yeah, I mean, I mean, I guess it started with the, with the story.
06:57But you're doing, like, the toughest path to market here.
07:00Right.
07:00And the toughest path to make money.
07:03Brad and Laura, first of all, a million dollars is a lot of money to invest in any business.
07:09Right.
07:10I think you're going to need a lot more than a million bucks.
07:12And the fact that you're losing money, I'm going to be out.
07:16I can go.
07:17It's one of the smoothest coffees I've ever tasted in my life.
07:20So kudos for what your technology has done.
07:22He's a big coffee drinker.
07:24Yeah.
07:25I, I think you've got some rough seas ahead.
07:27You're in a competitive space.
07:30Where there are literally thousands and thousands of million dollar coffee businesses out there in North America.
07:37And so I'm going to be out.
07:40I don't see a strategic plan to profitable growth.
07:45I'm out.
07:48You've actually figured out something very differentiated in a very competitive space with very good economics around it.
07:58The technology you have is a far simpler play than building a consumer brand in arguably one of the most competitive spaces.
08:06I'm not the right partner for that on the manufacturing side.
08:09So I'm going to be out.
08:09Well, I would, I would make you an offer.
08:17I'd give you a million dollars for the technology.
08:23You'd own the technology?
08:24I'd own the technology.
08:26It's an interesting offer.
08:27I'd give you a million dollars for the technology.
08:44But she would own the technology.
08:49Is that what you're saying?
08:49She only could add the technology.
08:50I'd own the technology.
08:52I'd let you keep Saltwinds as a brand so you can continue to run that brand using the technology that you've obviously created.
09:01And you'd have to pay for that technology because it would be done through Co-Packer.
09:04And do they get anything besides a million dollars for that technology?
09:08No, they get the million dollars and the coffee.
09:10They get to keep Saltwinds.
09:13Can we have a moment to discuss?
09:15Of course.
09:17Here we're a second.
09:18So it's a million patent portfolio.
09:21It's not enough.
09:22No, it's worth more than that.
09:23Yeah.
09:24You offered a very fair and interesting creative offer.
09:27And we want it as part of the other brand, too.
09:33Yeah.
09:34I hope they take it.
09:36They've lost enough money.
09:38Okay.
09:38Yeah.
09:38Okay.
09:41So, Brett and Laura, what'd you guys decide?
09:45Thank you very much, Arlene, for the offer.
09:48But we do think the technology is worth more than that.
09:52But we do appreciate the offer.
09:56Thanks.
09:57Okay.
09:57Bye, guys.
09:58Bye.
10:03Well, they believe in the technology.
10:05But they haven't done anything with it.
10:07They can get there.
10:07They've lost a ton of money and they continue to.
10:10That was a big opportunity for them.
10:11The challenge is they're out of money in a couple months.
10:13I agree.
10:14They're going to have to decide what they're going to focus on,
10:17whether it's the technology or the brand.
10:20There's a lot of value in our company.
10:22It's difficult to show all the value sometimes in a forum like this.
10:26Yeah.
10:27We think it's worth more, and we're going to go out and build that and show them.
10:30Next, let's see if this Montreal entrepreneur can convince the Dragons he's got more than a corner of the grab-and-go market.
10:52Snacks.
10:53Hi, Dragons.
10:54Hi, Dragons.
10:55My name is Sam.
10:57I'm from Montreal, Quebec, and I'm the CEO and founder of KMR24, the first natural convenience store in Canada.
11:05We're asking for $500,000 in exchange of 5% of the company.
11:10Back when I was an engineering student, I used to be a big consumer of junk food, sugar energy drinks,
11:19and so I had the idea to bring all these great products that you find in stores like Whole Foods markets in a convenient way, accessible around your corner.
11:29We have all the classic categories of that convenience store, but the products we have, like the chips, are not like...
11:36Everything's natural.
11:37Everything's natural and better for you.
11:37Everything's natural, organic, better for you.
11:40So, why don't you come up, like, see some of our products, check out some of our products, and maybe try some coffee.
11:48KMR24 stores can be found in the Montreal area, with more locations opening in Ontario this year.
11:55These guys are all Dragon's Den companies, Awake Chocolate.
11:58Yeah.
11:59Pure Gum.
12:00Pure Gum is a Dragon's Den company.
12:01In addition to prepackaged goods and meals, KMR24 also sells smoothies, coffee, and hot food items.
12:08Sam, do you make all the products, the fresh products in store?
12:11We have an industrial kitchen that makes all the products themselves.
12:16They ship it to us three times a week, so it's always fresh, seven days shelf life.
12:21How many square feet is your store?
12:22Around 1,000 square feet is the ideal size.
12:25We have one store that's 400 square feet, which is doing over $1,800 per square feet, which is crazy in the industry.
12:34And what's the other store doing?
12:36That's insane.
12:37The other one's around $1,100.
12:39That's still real, $1,100.
12:40That's very good.
12:41Yes, we're above average.
12:42This is way higher, because your basket sizes are so high, because natural products are more
12:46expensive, and people buy more of them.
12:47Yes, but also the traffic.
12:48Like, we have very high traffic per location.
12:50Right.
12:51So there's a few things wrong with your business right now.
12:54First of all, you're calling it Kale Mart, which is knock-off from Kmart.
12:59You're also calling it Kale Mart 24.
13:03I have a business called Alt 24, which is exactly that.
13:06No, it's not exactly that at all.
13:09Well, it's a convenience store.
13:11Yes, but it's not that at all.
13:14That's an automated business.
13:15Okay.
13:16Oh, so you know the business.
13:18I know them very well.
13:19And you chose to knock off the name.
13:21All their franchisees are coming to us.
13:23I don't think that's knocking off the name.
13:24We have employees in our store.
13:26Their business is an automated store.
13:28My business.
13:29Huh?
13:30My business.
13:31That's my business.
13:32That's your business, okay.
13:33Yes.
13:34So look, your business.
13:35Alt 24 is my business, and that's a knock-off.
13:37This is a knock-off of Alt 24.
13:39No, it's not a knock-off.
13:40But you come in here asking for money, and the money is going to be to defend a lawsuit.
13:54This is a knock-off of Alt 24.
13:58No, it's not a knock-off.
14:00Well, you're carrying Coca-Cola and Pepsi and Lay's products.
14:03Do you see any Coca-Cola here?
14:04Sorry, because I'm not.
14:05No, come to our store.
14:06No, no, no.
14:07Because I'm not carrying some of your products.
14:08See what we're offering?
14:09No, sorry.
14:10You're like a coup star without an employee, without any lottery, alcohol, because you're
14:16not allowed to because you don't have an employee.
14:18You have 35% robbery.
14:22Sam.
14:23I know the people there very well.
14:25This is a knock-off of an existing business, even the name.
14:30How is it a knock-off?
14:31It's a knock-off because, first of all, it has 24, and it's convenient.
14:34It's like saying 7-Eleven.
14:35How is it not because it has the word 24?
14:37A lot of people have 24 in their name.
14:39It's not like your business.
14:40Sam, I'm going to give you a little piece of advice, okay?
14:43Like, when you're going so close to something that already exists...
14:47It doesn't exist.
14:48No, I'm sorry.
14:49You've got to be careful.
14:50No, no, no, no.
14:51You've got to be careful with lawsuits.
14:52Look.
14:53Okay, go ahead.
14:54I'm telling you, you've got to be careful.
14:56You're coming here asking for money, and the money is going to be to defend a lawsuit.
15:01Okay, it's fine.
15:02I'm making it very simple.
15:03I am out.
15:04But I can tell you, you may want to contact your lawyer when this is over.
15:08Yeah, our lawyers are very good.
15:11Don't worry about it.
15:12That's what you're going to be spending the money on.
15:13Why are you talking about?
15:14Let's move past it.
15:16Your offering is basic.
15:18Sam, Sam.
15:19Give the guy a break, right?
15:20Sam, just take a chill pill.
15:22You need to just now realize that you've got one dragon out, and there's four of us that
15:25are still trying to talk to you.
15:27So, can you tell us what your sales were, please?
15:30So, per store, on average, it's a million dollar revenue.
15:35Net profit is 15%.
15:38Gross margin, 45%.
15:39Yeah.
15:40And this year, we're going to do 4.7 million with three corporate stores and one that's
15:45opening soon.
15:46So, there's 4.7 million with three stores or four stores?
15:49Because a million per store adds up to 3 million a year.
15:52How do you get to the 4.7?
15:54It's from franchise fees that we collected.
15:57Okay.
15:58We have already sold nine franchise stores.
16:01What does it cost you to create that franchise opportunity?
16:04That cost us probably $40,000.
16:06That's it?
16:07That's it?
16:08Yes.
16:09Are you sure?
16:10Yes, yes.
16:11That's too cheap.
16:12That's too cheap.
16:13It sounds impossible to franchise a business for $40,000.
16:16I can show you the books.
16:18I'm kind of doubting some of the, to be honest, the numbers.
16:21Like, they're all just too good to be true.
16:23And I've been around enough to know, hmm, do you either not know?
16:27All the numbers?
16:28I know very well.
16:29Or is there something missing here?
16:31I know very well.
16:32What's your filter to decide whether a product makes it in your doors or not?
16:38So, first we look at Nilsson data if they're performing or not.
16:42If they're performing, we're interested.
16:44But you have standards of better for you.
16:46You're not going to be selling cigarettes.
16:47We sell classic categories of convenience stores.
16:51You do?
16:52There's big margins.
16:53You better sell them.
16:54Do you sell vapes?
16:55Yes, we sell vapes and cigarettes.
16:56Oh yeah, that's a big category.
16:57But let me explain to you.
16:58Let me explain to you.
16:59Now I'm confused.
17:01If you don't have three categories, which are tobacco, alcohol, and lottery, you're not
17:10getting your space.
17:11I thought this was like an ethical version of a 7-Eleven, where you'd say, we're only
17:16carrying healthy products.
17:17We're not going to do vapes.
17:19Yes, no, no.
17:20In terms of food, it's all natural.
17:23Don't tell me that I have friends that go to the gym, that eat only like salads.
17:27They're smoking because they're smokers.
17:29You're doing all the natural stuff and you're doing all the sins because you are in a business
17:34to make money.
17:35Of course.
17:36So stop pretending that you are something that you are not.
17:38I don't think he pretended at all.
17:42For every other founder, we would say, wow, you looked at the data, you figured out what
17:47was selling, and you built it $1,300 to $18 of sales per square foot.
17:51I understand that.
17:52I don't have a problem with that.
17:54Michelle is right.
17:55With your story, there's no question that you're doing well.
17:59With your approach, there's a concern about you as an entrepreneur.
18:04Not that you're not a good entrepreneur, because I think you're damn smart, but you're
18:08also a little too aggressive with the, you know.
18:12When someone comes and tells me he's going to have a loss.
18:14Sam, Sam, Sam, calm down for a second.
18:15Your franchises are coming to us to save them.
18:17You know, I saved two of your franchisees.
18:19It's too confrontational.
18:21Sam, listen to me.
18:22You're raising money, and the point of raising money is that you have to instill confidence
18:26in people, okay?
18:28So if you have an investor, a potential investor that came at you hard, your composure is important.
18:34How you compose yourself is important.
18:36How you answer the question.
18:37I am very composed.
18:38Listen, Sam.
18:39I am very composed.
18:40We all walk into rooms.
18:41But you're coming to me telling me.
18:42Sam, hold on a second.
18:43Sam.
18:44No, no, sorry.
18:45You're not listening.
18:46No.
18:47No, I'm not listening.
18:48I'm sorry.
18:49Okay.
18:50So that's the reason why this will never get anywhere, right?
18:51Okay, you'll see.
18:52Because you do not listen.
18:53You'll see.
18:54Good luck.
18:55Okay, great.
18:56Good luck.
18:57Sam, you're not listening, Sam.
18:58You're not listening.
18:59You're not listening.
19:00You're not listening.
19:01I'm feeling terrible about my business.
19:02And I just sit there and very calmly walk them back to center.
19:05Mm-hmm.
19:06You're getting a good advice right now and you're still not listening.
19:08You're still being...
19:09I am listening.
19:10But you're being defensive.
19:11You're still being defensive.
19:12You're still being defensive.
19:13No, I'm listening.
19:14You know, like, I'm not here to deal with that.
19:16So, sorry.
19:17But Sam...
19:18Yeah, you are.
19:19Because you're asking us for our money.
19:20You're here to get money.
19:21You are here to deal with that.
19:22You are asking us for our money.
19:23I'm keeping my cool.
19:24Like...
19:25No, you're not.
19:26I think working with you could be challenging.
19:30And so, I'm sorry, but I'm going to be out.
19:35Okay.
19:36Based on how this went today, I think you just got to do a little bit more work as a founder.
19:41So, I'm out.
19:44I think you missed an opportunity, but hey, I'm the first one to say,
19:48have a WTF willing to fail mentality, right?
19:51There's a lesson in this.
19:52And I think you're a scrappy entrepreneur who's negotiated some great deals.
19:57You've got a business with some amazing numbers.
20:00What I found challenging was building a business is about leadership because you need followers,
20:07especially as franchise owners, to come in and follow your vision and what you see building in the world.
20:13And I think you've come in and you've sort of kept a little bit of the chip on your shoulder.
20:17And I think that's made you less open to some of the opportunities that we might have ended up seeing.
20:23And for that reason, I'm out.
20:24Okay.
20:29I think maybe the lesson here is that the response is often more important than the pitch.
20:33Yes.
20:34He got thrown off.
20:35I think he reacted completely inappropriately.
20:37He had to recover.
20:38He had to recover.
20:39Business is not personal.
20:40We want to know you're strong enough that you can stick to where your business model is.
20:43Because we're investing in them.
20:44But thoughtful enough that you can say, huh, that's a good point.
20:48Let's think about that.
20:49Yes.
20:50It's kind of deciding if we like the person and believe we could do business with them.
20:53You know, the business is great.
20:55It's doing amazing.
20:56We're going to get to where we want to be.
20:59Yeah.
21:00No hard feelings.
21:01It's fine.
21:02And yeah.
21:03Coming up.
21:04This is something new that we've developed from the medical research sector.
21:07We turn unused barns into smart farms like this.
21:11Think you have an idea for the next billion dollar big brand?
21:28Hello, dragons.
21:29Come on in.
21:30Yes.
21:31Yeah.
21:32Yeah.
21:33Auditions are open.
21:34And we want to see you in the den.
21:36There is a better way.
21:38This is so beautiful.
21:40What have you got to lose?
21:42Wow.
21:43Oh, yeah.
21:44This is our moment to shine.
21:45Yes, yes.
21:46Stop dreaming.
21:47Start pitching.
21:48Don't you want a bite of the next big thing?
21:50Yes, we do.
21:51Let's make a deal.
21:52Good luck.
21:53Cheers.
21:54Apply now.
22:01Now, from biochemical engineering to farming, this entrepreneur hopes a little cash can help
22:08show his farming innovation.
22:10Hello, dragons.
22:11My name is Ishan.
22:12I'm from Surrey, BC.
22:13I'm looking for $500,000 in exchange for 8% of our company, Sky Acres.
22:18I'm a biomedical engineer.
22:20And alongside a rocket scientist, we decided to become farmers.
22:24Okay.
22:25Makes sense.
22:26My friends and my extended family are blueberry farmers in Abbotsford, and they were hit with
22:31the floods a few years ago.
22:33And the only place that wasn't affected were the barns.
22:36There's two and a half billion square feet of unused barn space that this could be used
22:41to generate revenue and diversify their income.
22:44So that's what Sky Acres does, is we turn unused barns into smart farms like this.
22:51I have never thought of all the unused square footage in barns.
22:56Oh, that's smart.
22:57Pretty cool.
22:58You can start with three racks just like this, or you can scale up to a thousand.
23:02And this is not hydroponics.
23:04This is something new that we've developed from the medical research sector.
23:07Other vertical farms, they take market share away from the farmers.
23:11Instead, we empower them.
23:13And I'm really proud to announce that most of our customers, they're from the younger
23:16generation, and they're creating a new life for their families' farms.
23:20And you can taste the difference.
23:22So beside you, you'll find some cherry tomatoes, some basil, and the pesto that's on your plate.
23:29So feel free to give it a try.
23:31Sky Acres sells these vertical growing systems to help people grow their own produce.
23:36With a companion app, they also help customers sell their harvest directly to local grocers or restaurants.
23:43We help these farmers grow everything from strawberries, the cherry tomatoes, and 60 other varieties.
23:49This literally tastes like it was picked five minutes ago.
23:52These tomatoes were picked not long ago.
23:55So we'll be able to harvest, put it in the packaging, and have it on a grocery store shelf so that we really preserve the nutrients, the freshness, and the taste.
24:03Delicious basil.
24:04The issue is growing it isn't really the main issue.
24:08Selling it is a whole other ballgame.
24:10So what we've done is we provide support for that.
24:14So we provide the labeling, we provide the branding, and the packaging.
24:18And not only that, we also provide direct access to grocery stores and restaurants.
24:23These traveled across the country to get here, and they still taste as good.
24:26The crazy thing that we found was cherry tomatoes from our farmers was about 260% higher in nutritional content, which was a huge eye-opener for us.
24:35Why?
24:36A lot of these Californian farms or farms around the world, they are picking it before it's ripe, and they're adding what's called ethylene gas in their trucks.
24:45True.
24:46So that it ripens on the way there.
24:47Right.
24:48This doesn't sound healthy.
24:49The pesto was delicious.
24:50Oh, thank you.
24:51You said this is not hydroponics.
24:53This is a technology from the medical sector.
24:56What does that mean exactly?
24:57I wanted to kind of bring a medical device to market.
25:00And what that medical device did is it turned medicine into a mist that lung cancer patients could inhale.
25:07Interesting.
25:08So when the floods happened, something kind of clicked for me that maybe I could repurpose the technology from the medtech sector into agriculture.
25:14So instead of medicine, we're turning nutrients and water into the mist.
25:18What's the substrate?
25:19The really cool part about this is we don't have any substrate at all.
25:23The piece of foam at the top that holds the plant in place, the rest is suspended in that misted environment.
25:29And what this allows the roots to do is they create this really fluffy structure.
25:35And what this means mathematically is it has six times more surface area, and this allows us to grow upwards of six times faster than in the soil.
25:43So the roots are going into a water base that you're mixing with nutrients so that the plants can get what they need to be able to grow.
25:51That's exactly right.
25:52I just put a raised garden at my country house because I want a garden.
25:57But we have a barn.
25:59How much do I have to spend on you to just get that barn going?
26:04One of these systems is only $600.
26:06Is it one of the racks?
26:08Just one, so all three levels.
26:09Got it.
26:10With all the lighting, the irrigation, the sensors, they're all just $600.
26:14And you say just $600, giving the impression that that's a lot cheaper than your competitors?
26:19So commercial vertical farming systems start at $200,000, $300,000 for a container farm.
26:24Depends on the size of the farm, right?
26:26If you put this into a large farm and you had $600 per rack, you're going to add up to tens of thousands of dollars fairly quickly.
26:34So, I mean, the challenge in this space is, and I know a lot about it, is the margins.
26:38It's almost impossible to make money at it.
26:40So we make money three ways.
26:42So number one is selling the equipment.
26:44And we make about 35% to 40% profit margin on that.
26:47And number two is we collect royalty fees.
26:49So we collect 15% on the transactions that happen through our two-sided marketplace, connecting these mostly independent stores and restaurants to our network of growers.
26:58And lastly, we also sell the packaging itself.
27:01We make anywhere between $10 and $50 per square foot per month in just those royalties and consumables.
27:10And how the farmers make money, they harvest, put it in the package, and the app that we've developed, they tell them where to deliver it.
27:17The amazing part about this is for something like basil and cherry tomatoes, the profit margin for them after our fees is actually 47%.
27:24Why is it so much for them?
27:26Because you're connecting direct with that buyer.
27:28Exactly.
27:29So we're cutting out the five or six middlemen.
27:31But how many deliveries have been made to an independent store or restaurant?
27:35So every week, there's at least one delivery per farmer.
27:39Okay, so we're still very, very much in the trial phase of this.
27:42Very small.
27:43How much have you done in revenue?
27:44Let's talk the numbers.
27:45Yeah, so we've been in research for the past few years.
27:47So it's been about, I'd say, five months.
27:50And in those five months, we received about $450,000.
27:53So why is this worth $6.25 million today?
27:56We have $3 million already in the pipeline for just equipment purchases.
28:00We see a big potential to scale very quickly.
28:03The more installations we get, the more our recurring revenue compounds.
28:07That's only true if they continue to use the product, right?
28:11And so what happens with a lot of these growing operations is that people lose interest in it.
28:16Arlene has a really good point.
28:17All of us that have had these little vertical farms, you kind of give up because they're a lot of work.
28:23How much money would I make as a farmer for running this vertical farm?
28:28So just these three shelves will generate $730 in monthly revenue after paying a living wage and after paying our 15% as well.
28:39That's if everything grows and everything sells.
28:43That's right.
28:44And what if the farmer doesn't deliver?
28:46For me, when I hear door-to-door logistics, like that is a full-time business.
28:54For sure.
28:55I don't even think we picked up on that.
28:57Just building the Uber part of this business is really, really challenging.
29:02Exactly.
29:03I admire that you took technology that was for the medical industry and said,
29:07I can repurpose it and think about it from an ag perspective.
29:10This space has not yet proven a model that truly is scalable and financially viable.
29:18And until that happens, I am going to be out.
29:22I can go.
29:23I'm digging what I'm eating here, but I think you're too early for an investment on my end and I'll be out.
29:29For me, I'm already invested in the vertical farming space.
29:33So I'm going to be out just for that reason.
29:35No worries.
29:37I like the green mission and that you're giving farmers a new lease on life and on their property.
29:43But at this point where you're at today, this business is not growing on me.
29:49I'm out.
29:50I'm going to buy one of these.
29:52Sure.
29:53I think it's, I think it's really cool.
29:57And I would love to see how it works at scale.
30:00So again, like you're getting close, you're just not quite there.
30:05So I'm going to be out for now, but I think you got the seeds of something good.
30:09Amazing.
30:10Thank you so much.
30:11It was a pleasure.
30:12Thanks for coming.
30:13Take care.
30:14Coming up, another box of Lujan.
30:22In 20 seasons of the show, this is the biggest deal I have ever done.
30:28Woo!
30:29$20 million.
30:30Hi, I'm Alexa Suter.
30:31I'm the founder and CEO of HooHa, a women's healthy underwear brand.
30:35And this year we're on track to do over $42 million in sales.
30:42I faced the dragons in 2023.
30:44HooHa has redefined a category of natural underwear.
30:48What you're seeing there is the green panel lining that has zinc oxide permanently embedded
30:53into the fibers during the spinning stage.
30:55It's really skin soothing.
30:56That's impressive.
30:57Last year, our sales were $3.9 million.
30:59And this year we're projecting $9 million.
31:00That's amazing.
31:01Good for you.
31:02I don't have anything to do.
31:03I'm the founder and CEO of HooHa, a women's healthy underwear brand.
31:05And this year we're on track to do over $42 million in sales.
31:08I faced the dragons in 2023.
31:11HooHa has redefined a category of natural underwear.
31:14What you're seeing there is the green panel lining that has zinc oxide
31:16permanently embedded into the fibers during the spinning stage.
31:17I don't have a fancy business degree.
31:20So I'm really looking and hoping to find mentorship as well.
31:23Okay.
31:26Arlene, I think I'm going to accept your offer.
31:28Oh wow, that's amazing.
31:29HooHa.
31:35Welcome to our warehouse.
31:37When I was in the den I got two great pieces of advice.
31:40One was we should stick to what we know best and not get too distracted.
31:44And the other one was innovation is the lifeblood of a company.
31:48So I kind of listened to both.
31:51As we continue pushing the needle on fabric innovation,
31:54we're allowing ourselves to get into new product categories that bring
31:57the benefits of our underwear to different areas of people's wardrobe.
32:01In 2023, we had done 3.9 million.
32:04In 2024, we did over 20 million.
32:07Another box of HooHa.
32:08And this year we're on track to do over 42 million in sales.
32:11Now we're at a place in the business where we need to invest more in inventory,
32:20more in innovation to really bring this thing from 40 million to 100 million
32:25and then multiple hundreds of millions in sales.
32:28And this year we're on track to get into new product categories.
32:33Hi.
32:34Big day.
32:35Welcome.
32:36How are you?
32:37Good to see you.
32:38Nice to meet you too.
32:39This is the first print.
32:40It's going to do really well.
32:41Yeah.
32:42You suggested it.
32:43Yeah.
32:44In 20 seasons of the show, this is the biggest deal I have ever done.
32:50I've been wanting to do an underwear deal for like 17 years.
32:55$20 million is a lot of capital, but you know what?
32:58Alexa and her team are going to make sure that they grow this business.
33:01They're going to scale.
33:02They're going to be entering into new markets and new product lines.
33:05They're going to be able to do that because they were able to find the right capital partner
33:08and they have the right plan.
33:10Me too.
33:11I'm so excited and thank you sincerely for the vote of confidence in myself
33:16and the team and the brand.
33:19We feel so much stronger to have you in our corner.
33:24Let's make it official.
33:25Are you ready?
33:26Yeah, I'm ready.
33:30Here we go.
33:31It's just really fitting that this is happening on our 20th anniversary of the show.
33:35You know, the thousands of entrepreneurs that have gone through this show,
33:38I think this is a testament to all of them.
33:40High five.
33:41Woo!
33:42I think it shows you what's possible when you dream your dream
33:45and you live it out loud and you push hard to make things possible.
33:48Let me just take that.
33:49All right.
33:50Let me just take that.
33:51Please.
33:59And finally...
34:00Wow, they were in suits with fisherman stuff.
34:03Friends from university wading into the den ready to hook a dragon partner.
34:08Hi dragons, my name is Glen and I'm from Lunenburg County, Nova Scotia.
34:12I'm Javi, I'm from North Vancouver, British Columbia.
34:15And I'm James, I'm from Keswick, Ontario.
34:17And we're here seeking $150,000 in exchange for 20% of our business, Larry's Catch, based in Ontario.
34:25So let's face it, seafood across Canada can be a little fishy.
34:30Now, I'm not talking about Canadian seafood.
34:34I'm talking about the seafood that we eat, which is over 80% imported.
34:39When I moved to Ontario, I went from eating seafood almost every day to never touching it.
34:44Oh.
34:45I would beg my father to start sending seafood from back home and it didn't take long for others to start asking if I could send them seafood as well.
34:54This slowly turned into a side hustle and around eight months ago, I coerced two of my best buddies to quit our jobs in tech and become fishmongers.
35:04Oh, I love it.
35:05This sounds a lot like our story.
35:07Yeah, so Larry's Catch sells seafood boxes online.
35:11Our products are sourced from family-owned fishing operations across Canada, including Nineveh, BC, PEI, and Nova Scotia.
35:20Wild caught and sustainably certified.
35:22So, dragons, are you ready to hook a company that's making waves?
35:26Oh, boy.
35:27Well.
35:28On the table next to you, you actually find a Southwestern for your next fishing adventure.
35:31What's with the suits?
35:32Yeah.
35:33You're dressing for the job you want, which is part fisherman and part businessperson, right?
35:37Exactly.
35:38Exactly.
35:39There's real fish in here.
35:42The seafood boxes contain fresh, wild caught fish that are flash frozen for quality assurance.
35:47Available online only, the boxes range in price from $119 to $270.
35:54Half an island.
35:55Nova Scotia.
35:56Oh, that's pretty cool.
35:57Nova Scotia scallops.
35:58Atlantic cattle.
35:59What a great idea.
36:00My biggest question, where's Larry?
36:02So, Larry is a fifth generation fishing captain based out of a town called Riverport just outside of Lunenburg.
36:08And, as you can see, he's also my father.
36:11Aww.
36:12Aww.
36:13Larry, in the early 2000s, was diagnosed with primary progressive multiple sclerosis.
36:18Aww.
36:19So, he's now, unfortunately, he's bound to a wheelchair.
36:26Oh.
36:27And, sorry.
36:28That's okay.
36:29Yeah.
36:30Yeah.
36:31So, this is my sort of special way of carrying on the tradition.
36:34Nice.
36:35Well done, Glenn.
36:36Well done.
36:37Yeah.
36:38This is pretty cool that you tell the story of where the fish came from.
36:40It says, you know, the brave fishers travel up to 100 kilometers on the ice in the winter.
36:44Yeah.
36:45So, we offer 17 different products from seven different family-run fisheries from six different communities around Canada.
36:55If I order today, when could I get it?
36:57You get it tomorrow.
36:58Okay.
36:59It's just the three of us waking up five in the morning.
37:01You can imagine us packing orders.
37:02This is exactly how my story started.
37:04Yeah, there you go.
37:05Yeah, so.
37:06We went to Queens as well, Michelle.
37:07We actually met on day one of university, and we've lived together for the last eight years.
37:11Did you say you still live together?
37:13Yes.
37:14We live together to this day.
37:16I love it.
37:17What were your revenues last year?
37:19Yeah, so we only started eight months ago, and we've done $230,000 in sales.
37:24Well, good for you.
37:25Can you just run through your unit economics quick?
37:27Yeah.
37:28Our average sales price is $160.
37:31Yeah.
37:32Around 47% of that is directly the product cost.
37:37On average, over the last eight months, our margin has been 24%.
37:42What we've really seen is as soon as we went Ontario-wide rather than just the Toronto area, rural areas lit up.
37:51We actually started sort of targeting East Coasters, and believe it or not, we actually would go online,
37:59look up when East Coast flights were arriving, and stand at the airport and hand out business cards.
38:04Stop.
38:05That is such good guerilla marketing.
38:08Yeah.
38:09I see guys your age come in here, pumped up like this, selling alcohol.
38:15You guys are pumped up selling fish.
38:18But you're selling Canadian fish, and to me it's got all the makings of the best kind of brand, which is there's a story to tell.
38:25Thank you so much, Charlie.
38:26So, Glenn, what is the big picture vision? How big will the revenue be in five years?
38:32We want to expand far beyond Ontario and become the household name.
38:36I want this to be a sustainable industry that is supported within our walls so that we don't have to depend on other countries to be picking up our stuff.
38:46Is this business actually ready to grow? Do you actually have enough supply?
38:51That's something that takes time. You can't just turn around and all of a sudden have a new supplier.
38:55This year we're set to do about 800k to a million dollars.
38:59And with our growth rates and with the expertise of a dragon, we know that we can do to 20 million and beyond.
39:05I'll make you guys an offer. I love that you've come in here and rented matching suits to cut costs.
39:15I like you guys. I'm going to give you what you've asked for. 150 for 20%.
39:21Thank you, Brian. Thank you, Brian.
39:23You know, the fact is you came in here looking for 150,000 for 20% and you get that offer, you know, from Brian.
39:30He would be a great partner for you guys. So I'm going to be out.
39:33I love you guys' attitude, your optimism, you're like so Canadian humble. But for a couple of reasons, this catch isn't for me. I'm out.
39:45You guys are the sustainable food story and food sovereignty is everything. So I feel very strongly about that. I would give you the $150,000 for 20% for exactly the same deal that Brian gave you.
40:02So that's my offer.
40:03That's awesome.
40:04Okay.
40:05Michelle.
40:06There are such remarkable similarities in our story. And they like, kind of like all make me like emotional because it takes me like back. But like, being at Queens, meeting my co-founders there, packing boxes, going into the fishing industry, you know, it's a true local has probably been one of my biggest success stories from Dragon's Den.
40:27I know just such a disproportionate amount about this space specifically. I would give you $150,000 for 22.5%. And that extra 2.5% I think would be worth it.
40:41And, you know, I do definitely see the value of your track record. Brian, if you don't mind, would you please just share your thoughts in terms of how you can help us?
40:54Yeah.
40:55I know how to build a brand with people. I've got a passion for seeing people grow and build something special. And brands that have meaning and stories behind them. And I want to be a part of that. So I'm going to put this awesome hat back on.
41:11Here we go.
41:12Awesome. Well, thank you very much for sharing that. Do you mind if we just take a moment?
41:15No, go ahead.
41:16Please.
41:17They totally remind me of, I think all of us, right? Like, we've been in their shoes.
41:21Sure have.
41:22Sounds good.
41:23I should.
41:24Okay.
41:25Let's turn it up.
41:26Fellas, you are three amazing partners. So which fourth partner do you want to join your group?
41:33I think we're going to ask if Michelle and Arlene, would the two of you be willing to team up on this for the amount of equity that Michelle asked for? So 22.5%.
41:46I would be prepared to go in with Michelle if she wants a partner. But if she doesn't, I'm also prepared to do it on my own.
41:53Okay.
41:54Yeah, I have an enormous amount of respect for Arlene. But I really want to work with the three of you guys directly in doing this. So I'd like to do it on my own.
42:03Uh, do you mind if we take a moment again?
42:04Yeah.
42:05Or is that...
42:06No, not at all.
42:07Okay, sorry about that.
42:08And to be clear, sorry guys, I will do it for the same, I'll do it for the same 20% that Arlene did.
42:12Oh, wait a minute.
42:13Uh-oh.
42:14Uh-oh.
42:15Uh-oh.
42:16Okay.
42:17That changed.
42:18Okay, let's talk.
42:19Let's talk.
42:20Folks, stick to your guns, Michelle.
42:22She just wants to get...
42:23That's fine.
42:24You're gonna...
42:25That's fine.
42:26Michelle.
42:27Yeah, for sure.
42:28Sounds good.
42:29Thank you very much, Arlene. We appreciate it.
42:31Yep.
42:32Um, Michelle, we would be honored to take the deal.
42:35Ooh!
42:3614A, thank you guys.
42:38Great work.
42:39Oh my gosh, you're so tall.
42:41I grew up on seafood.
42:42Thank you all so much.
42:43Yeah, good luck.
42:44I really, really appreciate it.
42:46Bye.
42:48Well, we didn't get that one, Arlene, but there's other fish in the sea.
42:50Yes.
42:51I am so excited to go home, uh, tell my dad he's gonna be absolutely over the moon.
42:58I'm honestly kind of getting emotional just thinking about telling him.
43:02No fear.
43:03No fear.
43:04Tune in next time.
43:05Yeah!
43:06We feel like if we were coming back here in three months, we don't pay for futures.
43:13You've watched the show before in 20 years.
43:15I hope, right?
43:16You are in the top 1% of the 1% of entrepreneurs who take $400 and kind of do a million dollars
43:22in revenue in their second year.
43:24Yeah.
43:25It's really phenomenal.
43:26I would never have thought an OT like me could be here in front of you.
43:35And we can help millions.
43:37Millions!
43:38Put some money in your mouth and your hands fly upon the wheel.
43:46Definitely我是 Pa� $1.
43:48I rock, bro...
43:49It's real!
43:50Put some money in your mouth and your hands fly upon the wheel.
43:55I rock!
43:58It's real!
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