Story of Gas Monkey- Shark Tank Bangladesh -Entrepreneur
Biography of Introduction to Gas Monkey
Gas Monkey, a company founded by Kad Jan and his daughter
Kia in Bangladesh, is entering a rapidly growing industry: the LPG (liquefied
petroleum gas) market. Over the past decade, the LPG industry in Bangladesh has
expanded 20 times, with expectations to double by 2030. Kad Jan, as the founder
and CEO, and Kia, the co-founder and marketing director, are on a mission to
revolutionize this industry with their innovative app-based service. The app
allows customers to easily order LPG cylinders from their preferred brand with
fast and safe home delivery, ensuring quality with a thorough QC process before
every delivery.
Revenue and Growth in Year One
In just one year since its launch, Gas Monkey has achieved
significant growth. The company has generated nearly 3 crores in revenue,
completed over 10,000 deliveries, and gained more than 13,000 app downloads.
Impressively, 40% of these downloads are from registered customers, with 25%
being repeat buyers. This all occurred organically, without any marketing
spend. The company is now seeking an investment of 70 lakh for just 1% equity,
with the goal of capturing 10% of the Dhaka market, equating to 250,000 cylinders
per month by 2030.
Challenges and Improvements for Repeat Customers
Gas Monkey faces a few challenges in retaining repeat
customers. One key issue is price, as customers find the service slightly more
expensive than buying directly from local retailers. With delivery charges, a
cylinder is priced at 600 Taka, while a nearby retailer may sell it for around
1,580 to 1,800 Taka. The second challenge is delivery time; currently, the
average lead time for a cylinder is between 1.5 to 2 hours, which they aim to
reduce to 30 minutes to improve customer satisfaction and retention.
Profitability and Future Expectations
Despite the rapid growth, Gas Monkey is not yet profitable.
The company's gross margin is currently around 8%, but they expect it to rise
to 16% as they scale. Their net margin is projected to be around 7% once higher
volumes are reached. The business model, focusing on low-profit margins and
organic growth, relies on continued expansion and better operational
efficiencies. However, profitability is a major concern for potential
investors, as the margins are quite low at this stage.
Investment Breakdown and Marketing Plan
Gas Monkey plans to use the investment in four key areas:
marketing, inventory, trade finance, and infrastructure development. They
currently operate from 10 distribution points across Dhaka, but to reduce
delivery time to 30 minutes, they need to expand their network. The company
also plans to improve their marketing efforts to increase brand recognition and
customer acquisition, focusing on both corporate and individual customers.
Sharks’ Reactions and Concerns
The pitch at Shark Tank faced skepticism from the investors.
One of the major concerns was the low margins, which made the valuation seem
too high for many of the sharks. They also pointed out the risk of competition,
as larger organizations could easily replicate the business model and improve
the delivery process. There was a fear that other apps could enter the market
and disrupt Gas Monkey’s position. Despite the enthusiasm of the founders, the
sharks were hesitant to invest due to the perceived risks and the company's
current financials.
Price and Profitability Concerns
One shark expressed concern about the price point of Gas
Monkey’s services compared to local retailers. With a price difference of
around 20 to 25 Taka, the added delivery charge makes the product less
competitive. Additionally, the fact that Gas Monkey’s net profit margin is low
raised further concerns. The company is burning through a significant portion
of its product cost, making it difficult to achieve profitability in the short
term. The lack of immediate profits made the investment proposition less appealing
to potential investors.
Valuation Disagreement
The valuation proposed by the founders, asking for 70 lakh
for 1% equity, was seen as too high by the sharks. One investor questioned the
growth potential and risk of competition, stating that larger companies could
easily replicate the business model. The high valuation, combined with the
challenges related to margins and competition, led to several sharks deciding
to withdraw from the deal. Despite the organic growth and potential, the
business’s early-stage nature made the investment too risky for the investors.
Story of Gas Monkey- Shark Tank Bangladesh -Entrepreneur/age/net worth/startup/ Story of Gas Monkey/Shark Tank Bangladesh
Sharks’ Final Decisions
As the pitch progressed, the sharks continued to express
concerns about the business model and the valuation. Two of the sharks decided
to back out entirely, citing their inability to match the requested investment
size and their skepticism about the business’s long-term viability. One shark,
however, chose not to make an offer but explained that their decision was
influenced by personal connections to the founders. Ultimately, after a lengthy
discussion, all the sharks except one chose to exit, leaving the founders
without the funding they had hoped for.
A Father-Daughter Venture with Long-Term Vision
Despite the setback, Kad Jan and Kia remain optimistic about
Gas Monkey’s future. They emphasize that their primary goal was never to raise
funds from Shark Tank, but to use the platform as an opportunity to showcase
their business. The father-daughter duo, deeply passionate about the LPG
industry, is committed to growing their company. While they may face challenges
ahead, they are determined to continue their journey, knowing that success may
take time but they are dedicated to reaching their milestones and expanding the
business. Their story is one of persistence and innovation, with a long-term
vision in mind.
Timeline of Gas Monkey's Pitch and Shark Tank Experience
Company Introduction: Kad Jan (Founder/CEO) and Kia
(Co-founder/Marketing Director) pitch Gas Monkey, an innovative app-based LPG
service in Bangladesh.
Revenue and Growth: In one year, Gas Monkey generates 3
crores in revenue, completes over 10,000 deliveries, and gains 13,000 app
downloads (40% registered users and 25% repeat buyers) organically.
Challenges Identified: Key challenges include a higher price
point compared to local retailers (600 Taka with delivery charge vs 1,580–1,800
Taka at retailers) and long delivery times (1.5 to 2 hours). The aim is to cut
this to 30 minutes for better customer retention.
Profitability and Projections: Gross margin at 8%, expected
to rise to 16% as the business scales. Net margin projected to be 7%. Despite
growth, the company is not yet profitable.
Investment Request: Gas Monkey seeks 70 lakh for 1% equity
to capture 10% of the Dhaka market by 2030 (250,000 cylinders/month).
Investment Breakdown: The funds will go toward marketing,
inventory, trade finance, and expanding infrastructure to improve delivery
speed.
Sharks’ Concerns:
- Low margins and high valuation raised skepticism.
- Potential for competition from larger players who could replicate the business model easily.
- High valuation of 70 lakh for 1% equity seen as too high given the business's low margins and financial uncertainty.
Valuation and Profitability Disagreement: The valuation was
questioned, and the product's pricing (with added delivery charges) compared
unfavorably to local retailers. The business model's viability was questioned
due to low margins.
Sharks’ Decisions:
- Two sharks exit, citing skepticism about the company's future and valuation.
- One shark refrains from making an offer but expresses personal respect for the founders.
- Only one investor remains, but no deal is finalized.
Post-Pitch Reflections: Despite not securing the investment,
Kad Jan and Kia remain optimistic. Their primary goal was exposure and to
showcase their passion for the LPG market. They remain committed to their
vision for Gas Monkey, focusing on long-term growth and overcoming challenges.
