Nurturing a Passion for Microbial Protein Applications in Food and for a Sustainable Planet.
Development Stage: Pre-Seed, with completed lab research and construction of a highly automated industrial-scale plant.
Key Points to Present to Investors:
- Minimum Viable Product (MVP): Has received positive customer feedback.
- Founder’s Background: Extensive experience in the food industry and biotechnology applications.
- Successful Exit Experience: A significant advantage as it demonstrates the founders’ ability to execute and attract investment.
- Total Addressable Market (TAM), Serviceable Available Market (SAM), and Serviceable Obtainable Market (SOM) are substantial.
Highlights:
- Patent-protected Microbial Protein: Distinguishes the product from animal and plant-based proteins.
- Target Market: Focuses on consumers open to new products and trends, such as vegetarians, people with special dietary needs, and health-conscious individuals.
- Sustainable Energy: Provides a sustainable and abundant source of energy.
- Betaglucan: A key ingredient that supports heart health, digestion, and immunity.
- Market Reach: Successfully launched in the market with a global flavor giant as a partner to tailor products to specific regions.
- Research and Development: Collaborates with Czech universities for biotechnology research and Hanoi Medical University for product development.
- Marketing Strategy: Sponsors running events and leverages influencer marketing.
- Distribution: Focuses on organic food stores and private fitness centers.
- Automation: Highly automated plant with only 10 employees.
- Raw Material Source: Located in Nghe An province.
- Founders’ Background: The team consists of a finance expert, an economist, and a co-founder with expertise in R&D and production, all of whom are co-patent holders.
- Manufacturing Capacity: One of the three plants can produce microbial protein.
2024 Business Results:
- 1Q24: VND245mn
- 2Q24: VND425mn
- Projected 2024 Revenue: VND19bn
- Net Profit: VND1.4bn
Deal: Seeking VND5bn for 5% equity, post-money valuation of VND100bn
Balance Sheet Information:
- Equity: Founders and Angels: VND100bn
- Lab: 4 patents valued at VND33bn
- Large-scale Plant: VND67bn
- Debt: VND3.5bn
- Investment Period: 5 years since 2019.
Application of Global Trends in Technology:
- Environmental Sustainability: Saves energy, water, and emits no CO2 or toxic melanin. (Contrast: Beef production emits 6-9 tons of CO2.)
- Weather Independence: Production is not affected by weather or seasons, and can occur in arid regions.
- Enhanced Absorption: Shorter molecular chains compared to animal and plant proteins, leading to easier digestion and absorption.
- Health Benefits: Betaglucan boosts the immune system, helps prevent cancer, and lowers cholesterol.
Negotiation Standpoints:
- Shark Hưng: Focused on the scientific and technological aspects of the product and inquired about patent registration. Shark Nga: Questioned the founder about measurable improvements in the immune system before and after using the product.
- Research: A study involving 30 people and animal testing on mice demonstrated improvements in cholesterol levels and immune system indicators.
- Global Comparison: The founder highlighted similar research abroad that received billion-dollar investments at the research stage.
- Achievement: Successfully scaled up the product from a lab to a large-scale industrial production.
- Benchmarking: The founder compared their progress to international competitors who had invested hundreds of millions of dollars to reach a similar stage.
- Market Size: The estimated market size was stated as 100,000 people.
- Pricing: The product was priced 20% higher than other protein products in the market, justified by its unique value proposition.
- Export Strategy: The founder outlined plans to target Halal markets, the Middle East, and Europe, adjusting prices to be competitive in each region.
- Retail Price in Vietnam: Set at 700,000 dong, with instructions for multiple uses.
- Shark Hưng’s Assessment: Recognized the product’s potential for future environmental and health benefits.
Future Product Applications:
- Protein bars
- Ready-to-drink protein shakes
- Ice cream, cookies
- Artificial meat and seafood
Deal Closure:
- Shark Thái’s Offer: VND15bn for 15% equity.
- Co-Investment: Shark Nga and Shark Hưng joined the deal due to their shared interest in healthcare and business.
- Combined Offer: VND5bn for 5% equity and an additional 5% dividend preference for the next 5 years.
- Shark Bình’s Offer: Offered an additional VND5bn to co-invest with Shark Thái, resulting in a total investment of VND20bn for 20% equity.
- Final Deal: The founder accepted Shark Thái’s offer of VND5bn for 15% equity.
Overall Assessment of the Deal:
- Global Market and Family Offices:
The US and European markets have many wealthy family offices, known for their innovative and forward-thinking investment styles. They are often at the forefront of global investment trends, particularly in technology and innovation. Given the saturation of other markets and products, these regions are more likely to invest in groundbreaking technologies.
While European markets might have a higher valuation due to their focus on innovation and sustainability, they also have a more rational approach to pricing.
- Global Economic Context:
Before COVID-19, the Federal Reserve (FED) kept interest rates low. However, the recent increase to 5.25-5.5% due to the Federal Open Market Committee (FOMC) has made borrowing more expensive. This has led to increased scrutiny of startups’ performance when determining valuations.
In Vietnam, startups need to demonstrate stronger financial results to attract investors.
- Emerging Markets and Innovation:
Vietnam is still an emerging market with many opportunities for growth. While it’s not necessary to create revolutionary products that are beyond the reach of Vietnamese consumers, targeting family offices and foreign venture capital firms can be more suitable for innovative products.
The average GDP in Vietnam is still relatively low, so focusing on products that align with the market’s purchasing power is crucial.
- Family Office Dynamics in Vietnam:
Vietnamese family offices often have a strong focus on preserving family wealth and legacy. They may be more inclined to invest in their children’s ventures, even if it means providing significant funding.
However, it’s important to consider the impact of inflation on the value of their assets. Given the relatively high inflation rate in Vietnam, investing VND100bn over five years might not be as significant as it seems.
- Investor Expertise:
Investing in emerging industries requires specialized knowledge and experience. Investors should be familiar with the industry and have a strong understanding of investment valuation techniques.
If a wealthy family office has a dedicated investment team, they may not need to participate in Shark Tank. However, they might be seeking new ideas and investment opportunities that align with their family’s values and goals.
- Marketing and Market Research:
To succeed, the company needs a strong marketing strategy and in-depth market research. This includes:
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- Developing customer personas and market segmentation.
- Identifying effective marketing channels.
- Building strong relationships with customers.
- Understanding the reasons why customers choose the product.
- Re-evaluating the product and identifying key products to target specific market segments.
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