The debut season of the business reality show Shark Tank India has led to many participating startups managing to increase their valuation significantly, according to a report by Redseer Strategy Consults.
The study’s findings revealed that many startups, appearing on the Indian adaptation of the popular US series, secured deals 6 times greater in value from outside investors within a span of 1.5 years.
“Their current valuation is also 2.5X greater than what they were valued on Shark Tank season 1,” says Kanishka Mohan, a partner at Redseer.
Redseer says that a total of 27 startups successfully secured funds from external investors, regardless of whether they scored a deal, dropped out, or got rejected on the show. In all, most startups that appeared on the show fared well afterward, securing better deals and increasing valuations.
Dissecting the businesses that appeared on Shark Tank, 90 percent of the pitched ideas were centered on consumer-facing concepts, while the rest were B2B.
Commenting on the high rate of conversion on the B2B deals on the show, Mohan adds, “Out of the 19 deals, 10 came from the healthcare and manufacturing sectors. The majority of B2B deals were made by Namita Thapar and Peyush Bansal, having expertise in healthcare and manufacturing sectors respectively.”
On the investors’ side, the sharks negotiated hard and got much better deals with equity significantly higher than what was pitched on the show for every deal.
Aman Gupta, co-founder and CEO of boAT, was the most active shark, securing 70 deals with a total investment of Rs 246 million. Closely behind Gupta were Peyush Bansal and Namita Thapar securing 67 and 62 deals, with total investments of Rs 215.5 million and Rs 206.6 million, respectively. Six out of a total of eight sharks who appeared on the show preferred businesses in the food & beverages industry, while the remaining preferred to invest in healthcare.
Delving deeper, the investments in both seasons totaled Rs ~1.06 billion, with the F&B sectors receiving the biggest share of the pie. Most of the deals made on the show had one shark on board; however, it never happened that all the sharks invested in a single business.
Offering further insights on the entrepreneurs and startups, Redseer says that most pitchers hailed from metro cities and have studied in the top IITs and premier business schools. The majority of the businesses were headquartered in metros, with the rest situated in Tier 1 and Tier 2, or smaller cities. Redseer also notes that most of the pitched startups have been in business for more than two years.