[Music] First up tonight is a london-based Startup headed by founder Dimitri Koshkoff from Russia and zhongchul Bay From South Korea ah green light They've refreshed an ancient product to Target a 21st Century customer base in The world we operate there is a little Bit of Revolution happening younger Customers Millennials can't find the Products that fit their lifestyle we Believe we offer something unique for Them he said drink is a board game Brimming with confidence in their idea They've not been shy in applying a hefty Price tag We're going into the dam with evaluation Of close to 5 million pounds obviously a Lot of dragons will be quite surprised To hear that from us well we've got a Bottle ahead of us Hello dragons my name is Dimitri This is my business partner JC we are of Black and we are on a mission to bring Innovations to the team markets we're Looking to raise 70 000 pounds in Exchange for one and a half percent of The equities So what's so special about us well we Are building a new Lifestyle brand Arancy and we are focusing on one Exciting Market the millennials we're Bringing them something unique which is The combination of the three things they
Value strongly the first is a high Quality and health benefits the second Is convenience we offer monthly delivery Directly through your letterbox the Third is sustainability we pay special Attention to ethical sourcing of our Ingredients and our packaging is Recyclable we started selling online in May 2019 and over the last 12 months we Sold over 620 000 pounds worth of products we also Successfully launch our gift range and Have a strong pipeline of new product Development please try some of the Cheese that we've delivered to you and We are looking forward to answer your Questions [Music] Slick pitch from tea Trailblazers Dimitri koshkoff and jyongchul Bay in Your boxes you will have a customer Package that game through your letterbox With some cheese Dmitry and JC are hoping to shake up the Hot drinks industry to attract a Millennial clientele there are some Flavored black teas green cheese as well As fruit and herbal teas they're asking For 70 000 pounds in exchange for one And a half percent of their business It's a bold valuation and Tuka Suleiman Is first to teal So you guys are going to revolutionize The tea market and I don't know how
You're going to attract the dragon at One half percent so you're really really Gonna show me how a t startup business Can be worth about five million So explain to me the numbers you turned Over 620 000 yeah what was your gross profit we Have a we're having a net loss of 990 000. so how much 990 and that loss Exactly so for every town you took in You lost one and a half pounds yeah Dimitri Even my little daughter can do better Than this You're probably going to lose how much In the second year Target loss this year Is 300 300. so that means that Lost 1.2 million where's the money come From Initially we've raised two million Pounds from our friends and family as a Form of lot alone debt exactly so the Cupboard's already got two million debts Correct Number two is last month company called Farmer packs invested 300 000 pounds in Exchange for five percent equity at a Valuation of six million pounds So therefore today we are offering you 25 discount To that valuation that we've achieved a Month ago you're a great salesman But before I wink
You'll be raising more money and I'll be Down to half a percent When you run out of money and you have No more investors It's finished Words of warning from Tuka Suleiman as He discovers the business is Hemorrhaging cash Can Deborah Mead and find a Justification for the Colossal cost of This company In terms of looking how to underpin your Valuation yep either you come in here With great numbers or you come in with Something that says do you know what We've got this guys because nobody else Can touch us I could see really quickly How one of the established businesses With a great reputation for a really Good tea could just say oh that's a good Idea I'll just pop it in a letterbox box And off we go So please give me a bit of magic you've Got a unicorn That Poops out tea So when he's saying that there are much More established companies who can Easily enter But if you're actually Talking about gift ranges usual takes About 12 months to 18 months to develop The packagings and if you are actually Talking about developing and delivering Etc all that system takes roughly about
Three to four years if it is a big Company I said you know I'm going to ask Tasia a question you've got a tea Business Take you you to do an advent calendar For Christmas so monster design a month To print the packaging and then a month To pack You need to speed up It really doesn't take three to four Years So everything you've said is no barrier To entry and it doesn't underpin a five Million pound valuation The entrepreneur's pitch is on Shaky Ground as Deborah meaden discovers they Have no protection on their product Perhaps the T Trader's best hope lies With Sarah Davies the one investor who Falls within their target market I will just say I love how every time You talk about your Target customer Being a millennial that you look over at Me because I think correct me if I'm Wrong I'm the only Millennial in the Room thank you yep And our drink build this tea So I have very little interest in the Products however I am really interested In making money so can you walk me Through what the exit plan is sure our Ultimate exit plan is to be bought out By a much larger company in about seven To ten years from now how many seven
Seven to ten years from now now I've Been a wheelchair by that you need to be A millennial to capitalize on the Investment opportunity guys I'm going to Say where I stand You can convince these Um institutional investors to invest in You thinking of they may get their money Back in 17 years time good luck Unfortunately I haven't got seven to ten Years I'm out An incredulous two casulliman decides That any return on his investment would Be too far down the line and makes an Abrupt exit Tage lalvani already has a tea business Will he be willing to infuse this Startup into his existing interest I Have a love hate feeling for your Business okay I love your branding and your Packaging Definitely hate your valuation and your Numbers I just think that this business model is Not going to work so on that basis Unfortunately I'm going to say I'm out So guys From where I'm sitting yeah It looks like a very high risk business And a long journey and generally high Risk equates to high reward And actually based on the valuation You're offering it's very very high risk Very very low reward with inevitably
Multiple rounds of dilution So it's definitely not one for me and I'm out Sarah Davies thinks the tea bag post box Proposal is a risk too far and becomes The Third Dragon to bow out The Den's green queen queen Deborah Meaden now wants to know whether the Entrepreneur's product lives up to their Claims of sustainability Are you organic We are not organic okay as your what's Your packaging made of it is fully Recyclable but it's not recycled so it's Plastic uh there is an element of a Plastic indeed in an actual tea bag yeah But let's pick up on bucker teas for Example sure so pucker set their stall Out completely as being organic they Removed all plastic from their tea bags Your core Market the Millennials are Becoming extremely sensitive to plastic And Recycling and whether it's organic Or not and you're entering that market Embedding those problems in your product Does that sound sensible So we definitely hear these feedbacks From our customers we acknowledge that We now have launcher Campaign which is Collecting the aluminum foil that you Actually see for the tea bag you can Actually send it back to us and then we Recycle together To stop you there I mean that is really
That's not serious anybody who honestly Cares enough to take all of the old all Purging out of the bin put it in an Envelope and send it back to you it's Not going to buy your product in the First place it looks great you're ahead Of the pace on some of the design but You're behind the pace in the thinking Of your consumer and that's Disappointing So I'm sorry I won't be investing Product lagging behind its more Sustainable competitors convinces Deborah meaden to be the fourth Dragon To exit the deal To Jones Is Now their only chance for Investment but he's been unusually tied Lift up until now has he seen something The others have missed Do you know anything about me We've had few stories have they been Good stories Sure because for me I do have a business now where for many Years even some of my friends have said Why are you still putting money into This thing Because it's losing 400 000 a month And I carried on investing and I've Invested maybe 10 12 million In the next sort of 12 months that Business will carry a valuation of Around a billion dollars
So I think that you've created a Fantastic product incredibly well Thought through so I feel that this Could be an exciting journey to go on So I'm going to make you an offer That's great great news So I would like to offer you all of the Buddy 70 000. But I would want 10 of the company So I am asking for more than you would Want to give away but I feel that I Could potentially help to turn this into A A billion dollar tea business Thank you very much for your offer can You give us a few seconds to yeah [Music] A dramatic turn of event gets the Proposal back on the boil as Peter Jones Is tempted by the tea business and makes An offer What do you think But his request for 10 of the equity is Far more than the one and a half percent The entrepreneurs were hoping to give Away to be so um five percent or three Percent I don't think he's going to ask okay all Right Thank you Peter for uh for your offer Will it be Um willing to consider five percent No no I wouldn't because I think that The value that I'm going to bring to
This and where I could help you get to Much faster I think is worth More than five percent right now Just [Music] Um will they be willing to increase your Um cash contribution to 100 000 pounds on the basis that you are Getting 10 stick Um I wonder whether the way to do this is The minute you pay me back I will drop Down to seven and a half percent equity That's a great sound that's a great idea And I think on that basis I think we Would be ready to accept uh Handshake thank you he's promised you a Billion dollar company so thank you very Much thanks congrats thank you success For the entrepreneurs as they walk away With a blend of 70 000 pounds and a Dragon who shares their vision of Dragging tea into the 21st century yes Yes amazing sorry You are all really gutted and I really Love it it's because you played it badly And you're lost great When Peter said he's going to make an Offer I had to come down and try to Focus on the battle I think we won the Battle and we got a dragon with us now
