Urban Space Shark Tank India Episode Review

• Urban Space Overview :
  • Urban Space is an e-commerce brand with a focus on premium quality home furnishing products.
  • The products include bedsheets, cotton curtains, rugs, carpets, blankets, cushions, pillow covers, comforters, and mattress protectors.
  • The brand operates on its website and major e-commerce platforms like Amazon, Myntra, Ajio, and Flipkart.

• Urban Space Founders:
  • Founded by Radhika Koolwal and Rohit Agarwal.
  • Radhika holds a Bachelor’s in Computer Science and a Master’s from the International Management Institute.
  • Rohit holds a Bachelor’s in Technology and a Master’s from the Management Development Institute, Gurgaon.
  • Both founders have prior experience in sales, marketing, and entrepreneurship.
• Shark Tank India Pitch:
  • Urban Space pitched in Shark Tank India Season 3, Episode 17.
  • Asked for ₹1.8 crores for a 1% equity stake.
  • The valuation of Urban Space is ₹180 crores.
• Shark Judges and Responses:
  • Shark judges included Anupam Mittal, Namita Thappar, Aman Gupta, Amit Jain, and Vineeta Singh.
  • The Sharks were surprised by the ₹180 crore valuation, especially Namita Thappar.
  • Questions were raised about the online business model, with Shark Amit Jain suggesting consideration of an offline presence.
• Financials and Sales:
  • Annualized Revenue Run rate is ₹45 crores.
  • Monthly sales for August, September, and October 2023 were ₹4.15 crores, ₹3.65 crores (27% net margin), and ₹8 crores, respectively.
  • Projected yearly sales for FY 2023-2024 are ₹40 crores with a 25% net margin.
• Sales Channels and Split:
  • Sales split across products: Curtains (45%), Blankets, Table Covers, and Others (30%), Bedsheets (25%).
  • Platform sales split: Own Website (₹6.5 crores), Amazon (₹20 crores), Myntra (₹8 crores), Ajio (₹4.5 crores), Flipkart and Others (₹1 crore).
• Unit Economics and Expenses:
  • Cost breakdown: COGS (33%), Shipping and Commission (17%), Marketing (7%), Overheads (5%), Returns (12%), GST (7%), EBITDA (19%).
• Marketing and Challenges:
  • Challenges discussed include the difficulty of scaling online in the home furnishing category.
  • Some Sharks expressed concerns about investing due to the business’s current position.
• Outcome on Shark Tank India:
  • No deal was made with the Sharks.
  • The founders did not agree on the offered terms.
• Other Details:
  • Urban Space has a repeat rate of 31% on its website and 25% on marketplaces.
  • The episode aired on February 13, 2024.

Aspect	Details
Brand Name	Urban Space
Website	Urban Space
Website Platform	Shopify E-commerce Platform
Monthly Website Visitors	13,000 average monthly visitors
Search Keywords	Competing on almost 20,000 search keywords
Founders	Radhika Koolwal and Rohit Agarwal
Founder’s Background	Radhika – Bachelor’s in Computer Science, Master’s from IMI. Rohit – BTech, MBA
Shark Tank Episode	Season 3, Episode 17 (Aired on February 13, 2024)
Funding Asked	₹1.8 crores for 1% equity
Valuation	₹180 crores
Shark Judges	Anupam Mittal, Namita Thappar, Aman Gupta, Amit Jain, Vineeta Singh
Sales Channels	Own Website, Amazon, Myntra, Ajio, Flipkart, and Others
Product Sales Split	Curtains (45%), Blankets, Table Covers, Others (30%), Bedsheets (25%)
Platform Sales Split	Own Website (₹6.5 crores), Amazon (₹20 crores), Myntra (₹8 crores), Ajio (₹4.5 crores), Flipkart and Others (₹1 crore)
Financials	Annualized Revenue Run rate: ₹45 crores; Projected FY 2023-24 Sales: ₹40 crores
Net Margins	Ranging from 25% to 27%
Challenges Discussed	Difficulty in scaling online, concerns raised by Sharks about the business model
Outcome on Shark Tank	No deal made, founders did not agree on offered terms
Repeat Rate	Own Website (31%), Marketplaces (25%)

Urban Space: Business Plan

Brand Name: Urban Space

1. Executive Summary

Urban Space is a premium e-commerce brand aiming to disrupt the Indian home furnishing market with high-quality, sustainable, and design-centric products. Targeting young urban professionals, we offer bedsheets, curtains, rugs, carpets, blankets, cushions, pillow covers, comforters, and mattress protectors. Combining data-driven product design with digital-first marketing, we aim to capture a significant share of the growing online home furnishing market.

2. Business Potential in India:

• Market Size: The Indian home furnishing market is expected to reach $51.3 billion by 2025, with online sales growing at 25% CAGR. (Source: Statista)
• Shifting Consumer Preferences: Young urban Indians are increasingly prioritizing quality, design, and sustainability in home décor.
• Limited Premium Options: The current market lacks curated premium brands offering a wide range of products online.

3. Total Addressable Market (TAM):

• 30 million potential customers in the 25-45 age group with higher disposable income in major Indian cities. (Source: Census 2021)
• Assuming a 5% market penetration, the TAM translates to a $1.56 billion opportunity.

4. Ideal Target Audience:

• Age: 25-45 years old
• Demographics: Urban professionals with high disposable income
• Psychographics: Design-conscious, value quality and sustainability, active online shoppers

5. Marketing Strategy:

• Social Media Marketing: Leverage Instagram, Pinterest, and Facebook to showcase products and engage with the target audience.
• Influencer Marketing: Partner with lifestyle and design influencers for product promotion and brand awareness.
• Content Marketing: Create informative and engaging blog posts, articles, and videos related to home décor and lifestyle.
• Search Engine Optimization (SEO): Optimize website and product pages for relevant keywords.
• Paid Advertising: Run targeted ads on social media and search engines to reach the ideal audience.

6. Content and Digital Marketing Strategy:

• Create high-quality product photography and lifestyle imagery.
• Develop informative and engaging content showcasing product features, styling tips, and home décor trends.
• Leverage user-generated content (UGC) to build trust and authenticity.
• Utilize data analytics to track campaign performance and optimize strategies.

7. Distribution Strategy:

• Direct-to-consumer (D2C) online sales through the Urban Space website.
• Partnerships with curated marketplaces catering to premium home décor.
• Potential future expansion to brick-and-mortar stores in select locations.

8. Advantages:

• Premium quality and curated product selection.
• Sustainable and eco-friendly practices.
• Strong focus on design and aesthetics.
• Data-driven product development and marketing.
• Agile and efficient e-commerce operations.

9. Challenges:

• Competition from established players and smaller online retailers.
• Building brand awareness in a crowded market.
• Ensuring consistent product quality and customer satisfaction.
• Maintaining profitability in a competitive environment.

10. Reasons for Success and Mitigation Strategies:

• Focus on a clearly defined target audience and their needs.
• Invest in building a strong brand identity and reputation.
• Offer competitive pricing and attractive promotions.
• Provide excellent customer service and after-sales support.
• Continuously innovate and offer new products and experiences.
• Maintain a strong focus on sustainability and ethical practices.

11. Future Business:

• Expand product range to include furniture and other home décor items.
• Offer personalized product recommendations and design services.
• Explore international expansion opportunities.
• Develop omnichannel retail strategies.

12. Roadmap to Increase Valuation:

• Achieve profitable growth by exceeding sales targets.
• Secure funding from investors to fuel expansion.
• Build a strong team of experienced professionals.
• Win industry awards and recognition.
• Maintain high customer satisfaction scores.

By focusing on its core strengths, addressing challenges strategically, and leveraging the immense potential of the Indian online home furnishing market, Urban Space is well-positioned for success and long-term value creation.

Conclusion: Urban Space faced scrutiny over its valuation and online business model but did not secure a deal. The Sharks raised valid concerns, emphasizing the challenges of online scaling in the specified product category. Urban Space’s financials and sales performance were key points of discussion in the Shark Tank India episode.