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Shark Tank India founders who invested over Rs 1 cr in their toy library business are told to ‘think of a better business model’

Shark Tank India Season 4 saw a husband-wife team asking the 'sharks' to invest in their toy library business, but they did not get any offers.

Peyush Bansal told the founders to think of a better business model.

Shark Tank India Season 4, which is currently streaming on Sony LIV, recently saw a husband-wife team from Mumbai who were on the show to present their toy library business The Elefant. Sourabh and Srishti Jain shared that they thought of this business because of the increasing number of toys that their three-year-old was stacking up, and realised that outside of Mumbai, no one was familiar with the concept of exchanging toys in a library like set-up. After quitting his full-time job, Sourabh dove into the business and invested Rs 1.25 crore of his own money, before raising more capital from VCs. On the show, they asked Rs 60 lakh in exchange of 1 percent equity, valuing their business at Rs 60 crore.

Sourabh and Srishti’s business is an app-based toy and book library, where parents can select a subscription plan and choose the toys and books they want for their kids. The business functions on a franchise model, where the libraries are located at the homes of the franchisees, who store the toys, sanitise them, and pack them whenever a new order comes in. But, the franchisee’s initial investment of over Rs 7 lakh caused quite a stir on the tank.

Vineeta Singh was the first to back out. She said that she had a subscription-based business before SUGAR, but she quickly realised that it was a hard task to scale it up. Peyush Bansal wondered if the same toys will be in circulation for the first three years, as that is the minimum time for the franchisee to earn what they have already invested. He was then told that the franchisees need to put in an additional Rs 1 lakh for more toys. Peyush was quite shocked to learn that there were many hidden costs in the business, and he told the founders to “think of the franchisee’s money as their own money.” He then told them to “think of a simpler model like Cashify,” and backed out of the deal.

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Aman Gupta also did not agree with their subscription model, and Kunal Bahl said that they had to reevaluate their business, saying, “Your revenue is the same as your loss.” Anupam Mittal said that they had all the buzz words working for them – sustainability, women entrepreneurs, etc but as one looked closer, they could see the problems of this business. He also got out of the negotiation.

The Elefant did not get any offers from any of the ‘sharks’.

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