A Little Extra: A Shark Tank Pitch Analysis

A Little Extra, a brand founded by Diksha Singhi, was recently featured on Shark Tank India Season 3, aiming to secure investment for their business of manufacturing funny and quirky jewellery. This analysis delves into the details of A Little Extra, encompassing its establishment, ownership structure, business model, products, and the Sharks' decisions regarding their pitch.

Company Details

A Little Extra incorporated its business in 2020. This company is headquartered in Delhi, India. With over 80,000 products sold till date, the brand has launched over 500 products. The company was started by Diksha Singhi in 2020. The brand makes products which are 90% handmade with manufacturers situated in Delhi, West Bengal, Assam and Uttar Pradesh

Ownership

Diksha Singhi is the owner of A Little Extra. She owns 100% equity of the company. She hails from a Marwari family of Guwahati, Assam but shifted to Delhi about ten years ago. She started her business with an investment of just ₹5,000. Her father wanted her to be a CA but she hated numbers. She did her studies from Indraprastha College for Women, University of Delhi in mass communication and journalism. Fond of social media marketing and storytelling, she started an agency of her own but closed it in 3-4 years because she was not enjoying the work much. Having a deep fascination with jewellery, she started her company in 2020 and now she has sold more than 80,000 products to date.

Business Model

A Little Extra is a fun and quirky jewellery brand, with products 90% handmade and inspired by people’s emotions, occasions, moods and festivities. The brand has launched more than 500 designs to date, priced at an affordable range, and aims to make jewellery a tool of emotional expression.

Products and Services

A Little Extra offers a wide range of products including earrings, hand accessories, neckpieces, hair accessories, keychains, maangtika, belts, home décor, and clothing. The brand focuses on bringing a modern touch to ancient art forms, with detailed information about products available at: https://alittleextra.co.in/collections/all

Shark Tank Pitch and Decisions

A Little Extra presented their pitch in Shark Tank India seeking an investment of ₹48 lac for 6% equity (Valuation ₹8 Cr).

• Namita Thapar: Namita initially showed interest in knowing the uniqueness and how A Little Extra is different from other brands. Later on, asked the repeat rate of customers. Namita found the pitch to be well-presented and interesting but didn’t become an investor for the brand knowing that the given market scale, where an investor can get an exit is too early. Hence, she didn’t invest.
• Vineeta Singh: Vineeta asked the percentage of designs which are their own made and which are not seen in other brands. She liked the strong social media presence. Vineeta has experienced many deals and valuations of the same category and found that the sales will be a 3X multiple. So, if the first round is 4X of the ARR (Annualised Revenue Return Rate) then the multiple will surely compress in future. But still envisioning positive returns in the future Vineeta extended an offer of ₹48 lac for 8% equity (Valuation ₹6 Cr) in collaboration with Anupam. The offer, when Diksha tried to counter, was later on revised and the final deal was closed at ₹60 lac for 8% equity (Valuation ₹7.5 Cr) in collaboration with Anupam.
• Ritesh Agarwal: Ritesh questioned the location of the manufacturers of the earrings and the price of the GirlBoss earrings. He asked about the cap table of the brand. Ritesh marked that the business will become reasonably attractive if a ₹100 Cr business is made earning a profit of ₹25 Cr. So, he offered the original ask of Diksha i.e. ₹48 lac for 6% equity (Valuation ₹8 Cr) in collaboration with Aman. But Diksha accepted Anupam’s and Vineeta’s deal.
• Aman Gupta: Aman loved the products. He asked about the price of the Football earring. Aman, after finding the average selling price, marked that the sales of these products would have been difficult through online channels. Aman appreciated the reels often going viral because it is a skill which everyone doesn’t have. He asked about the future scope of growth and the next step in the business. Aman initially asked for the royalty because he was unsure of the exit from this category but eventually offered ₹48 lac for 6% equity (Valuation ₹8 Cr) in collaboration with Ritesh. But as mentioned earlier, the deal closed with Anupam’s and Vineeta’s offer.
• Anupam Mittal: Anupam wanted to know the market size of fabric jewellery and its TAM (Total Addressable Market). He remarked that the fashion of jewellery changes correspondingly with fast fashion and a brand is built when new products are launched and cleared off in less time. Anupam initially offered ₹48 lac for 8% equity (Valuation ₹6 Cr) in collaboration with Vineeta, if she would agree. But after Diksha put a counter, the deal closed on ₹60 lac for 7.5% equity (Valuation ₹8 Cr) in collaboration with Vineeta.

Analysis of Shark's Decisions

The Sharks' decisions reflect several key considerations for A Little Extra:

• Long production time: The time taken from designing to production takes around 45 days which is too long because in order to survive in a fast fashion and fast jewellery market the products need to be manufactured within 7 to 8 days so that they can be cleared off easily and a new production cycle can be started.
• Growth potential: The business has growth prospects because it has still not entered into e-commerce and has made to-date sales only through its social media handle and its very own website. If the founder can grow a business of ₹100 Cr making a profit of ₹25 Cr then a brand name will be surely marked.
• Sales multiple: According to Sharks, the sales multiple of this category will at most go for 3X and at no stage it will be 4X the ARR (Annualised Return Rate) because in the future the multiple is surely going to be compressed.
• Strong social media: A Little Extra has a strong social media presence with 199K Instagram followers. The reels often go viral because making viral reels repeatedly is a skill set which is not possessed by the marketing team of every brand.

Some key strengths and weaknesses of A Little Extra:

Strengths:

• Quirky earrings: The USP of the brand i.e. the quirky earring which reflects people’s emotions, mood, festivities, and emotions is something which sets the brand apart from other brands.
• Reasonably priced: The earrings are 90% handmade and the prices are quite reasonable where the average selling price is ₹450.
• Prominent social media footprint: The brand has a community of 199K Instagram followers which shows a strong hold on the social media presence since all of the sales have been made through Instagram and their website.
• Entry on e-commerce platforms: The brand is still left to make its step on e-commerce platforms which predicts a considerable growth of the brand.

Weaknesses:

• Long production cycle: The current production cycle from designing to manufacturing extends up to a period of 45 days which is quite long in fast-moving fashion chains.
• Early stage business: The business is at an early stage where it may become difficult to get an exit and recoup its investment.

Future of A Little Extra

A Little Extra shows growth potential. It is a new entry with new and quirky jewellery which are 90% handmade. The brand has growth prospects in fast fashion chains. The brand reflects considerable growth once it expands its distribution channels through e-commerce platforms. The founder wants to increase exports from current 10% to 30-35%.

Conclusion

A Little Extra’s appearance in Shark Tank India Season 3 highlighted the prospective growth prospects of the business. The brand’s new and unique jewellery which is inspired by people’s emotions, occasions, festivities and moods, along with an affordable price showcases the growth prospects. Its presence in the fast-moving jewellery fashion can be surely marked once the production cycle time is reduced to 7-8 days. The remarkable social media hold and future entry on e-commerce platforms demonstrates the chances of becoming a business of ₹100 Cr. The brand has a promising future.

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