AI Kavach: A Shark Tank Pitch Analysis

AI Kavach, a brand founded by Pratyusha Vemuri Venkata, recently featured on Shark Tank India Season 3, aiming to secure investment for her business model of identifying and protecting the users from fraudulent websites, calls, messages. This analysis delves into the details of AI Kavach, encompassing its establishment, ownership structure, business model, products, and the Sharks' decisions regarding the pitch.

Company Details

AI Kavach has the company name Kavach AI Private Limited with the company incorporation date on January 30, 2021. This company is registered in Bangalore, Karnataka India. AI Kavach has around 1500 paid users with a subscription price of ₹99/year. The brand has successfully identified and protected more than 200 fraudulent websites and messages and has received great reviews from customers. The company has even filed a patent in India for a unique patent algorithm.

Ownership

Pratyusha Vemuri Venkata serves as the CEO of Kavach AI Private Limited. The Directors of the company are Chegondi Abhiram and Chegondi Ramajoga Rao. Additionally, the company has 2 advisors. One of them is a Product Head at Google while the other one is the CEO of MyUS. The company has authorized capital which amounts to ₹10 lac, with a paid-up capital of ₹1.00 lac. The company has issued $10,000 for 0.25% equity and the rest 0.25% as Advisory equity. Pratyusha has 18 years of security experience. She is an ex-product head at Microsoft for Identity & security. She has been in the US for the last 20 years. She has done her masters in Computer Network hence she is majoring in Computer Security. She then worked at Cisco, then at Paloalto, Z-Scaler, Akamai and then at Microsoft. She moved to India in 2021. Willing to purchase swing, she ordered one costing ₹5,000 from a website after checking proper SSL Certificate and contact details. Still, that website turned out to be fraudulent when her swing didn’t arrive even after 2 months. At that time, she started her brand AI Kavach which today has an accuracy of 96%.

Business Model

AI Kavach is an AI-powered brand which seeks to identify fraudulent websites, calls, messages, etc. The current digitalization faces a major problem where our phone always keeps an eye or tracks the user's activities on online websites, social media actions, browsing, and also recording the banking and financial information. This is taken advantage of by cyber fraudsters. Calls, messages, and websites make up 70% of the overall fraud cases. AI Kavach is a powered, patented, and multiple award-winning solution to these problems. AI Kavach runs real-time URL detection in the background through AI algorithms to predict fraudulence. If the fraudulent score is more than 80%, then an alert is triggered. Additionally, it detects fraudulent apps, messages, calls, and websites and protects the apps with sensitive information. It gives a real-time alert on the phone itself. The AI is built on a trained algorithm for millions of good and bad websites. Training of these websites extracted more than 40 fraud detection features.

Products and Services

AI Kavach offers fraud detection services by identifying fraudulent calls, messages, and websites. More details can be looked upon: https://kavach.co.in/

Shark Tank Pitch and Decisions

1. Aman Gupta: Aman expressed concerns about the low adoption curve of such products and offered ₹50 Lac for 4% equity (Valuation ₹12.5 Cr). Later, he adjusted his offer to ₹50 Lac for 1.25% equity (Valuation ₹40 Cr) and accepted Pratyusha's counter-offer of ₹1 Cr for 2.5% equity + 2.5% Advisory Equity Valuation ₹40 Cr.
2. Peyush Bansal: Peyush agreed with Pratyusha's views on data privacy and offered ₹50 Lac for 1.25% equity (Valuation ₹40 Cr), with a condition to be treated equally as other advisors. He later accepted Pratyusha's combined offer of ₹1 Cr for 2.5% equity + 2.5% Advisory Equity Valuation ₹40 Cr.
3. Radhika Gupta: Radhika suggested focusing on bundled products and corporate sectors but did not extend an offer due to concerns about the stage of business investment.
4. Vineeta Singh: Vineeta saw potential in the brand but decided not to invest due to a lack of alignment in tech backgrounds.
5. Ritesh Agarwal: Ritesh saw potential in Pratyusha's talent but was unsure about the business's growth prospects, hence opted out of the deal.

Analysis of Shark Decisions

• Small User Database: AI Kavach's small user database exposes it to competition from Google, which has a larger customer base.
• Constant Upgrades: The AI algorithm of AI Kavach requires constant upgrades to provide value to users, posing operational challenges.
• Area of Business: Sharks had conflicting views on whether the business should focus on B2B or B2C, indicating uncertainty in the business model.
• Expansion Possibilities: India's shift towards higher-end tech products presents growth opportunities for AI Kavach in the future.

Key Strengths and Weaknesses of AI Kavach

Strengths:

• Fraud Detection Model: AI Kavach offers unique services of fraud detection of websites, calls, and messages, which hasn't been introduced in India.
• Patented Model: Pratyusha has filed for the AI algorithm of AI Kavach, providing a major advantage for the brand.
• Affordable Price: The subscription price of just ₹99/year is justified and reasonable when compared with the services offered.
• Competitive Advantage: AI Kavach has the first-mover advantage in India's emerging market for digital safety, giving it a competitive edge.

Weaknesses:

• Small User Database: AI Kavach has a small user database, exposing it to competition from Google, which has a database of millions of people.

Future of AI Kavach

The future of AI Kavach looks promising to gain a competitive edge and secure the first-mover advantage. The vision of AI Kavach to make India digitally safe and secure seems feasible with proper business tactics and market proposition.

Conclusion

AI Kavach's appearance on Shark Tank India Season 3 highlighted a new business segment with possibilities for the future. The protection model offered by AI Kavach is unique and differentiated, with a justified pricing model. The main challenge AI Kavach may face is stiff competition from Google due to its large dataset handling. Overall, AI Kavach offers a positive growth trajectory in India's tech landscape.

Quick Summary: