Key Points:
Investment: £160,000
Investor: Deborah Meaden and Theo Paphitis
Equity Offered: 25%
Business: Igloo Thermologistics Limited
Target Audience: UK food and pharmaceutical industries
Challenges: Competitive market, maintaining service consistency
The Pitch
Anthony and Alistair, the founders of Igloo Thermologistics Limited, presented a compelling pitch on Dragons' Den, seeking £160,000 in exchange for an 8% equity stake in their company. Igloo specializes in refrigerated transport services catering to the UK food and pharmaceutical industries. They highlighted their impressive growth from two refrigerated vans and a small office in North London to a fleet of 15 vehicles and 26 employees within two years, achieving net sales of £106,000 per month.
The founders emphasized their commitment to providing consistent and reliable service, aiming to become the best provider in their niche. They planned to use the investment to expand by opening two new sites in the UK, enhancing their response time, network coverage, and price competitiveness.
Financials and Offer
During the pitch, the financials were discussed in detail:
- Year 1: £218,000 turnover, £70,000 loss
- Year 2: £18,000 profit
- Year 3 (projection): £300,000 profit
Initially, the valuation of £2 million was met with skepticism by the dragons. However, Deborah Meaden and Theo Paphitis eventually offered a combined investment of £160,000 for a 25% equity stake, recognizing the potential and growth trajectory of Igloo.
Challenges Highlighted by the Dragons
The dragons raised several concerns:
- High Valuation: Peter Jones questioned the high valuation of nearly £2 million, considering it excessive for a business projecting a £300,000 profit in the coming year.
- Market Competition: Deborah Meaden queried how Igloo planned to differentiate itself in a highly competitive market.
- Profit Clarity: There was a need for clear profit margins rather than just turnover figures, which the founders initially struggled to provide.
Despite these challenges, the founders demonstrated resilience and a deep understanding of their market, eventually negotiating down the equity demand from the dragons.
Conclusion
In a dramatic turn of events, Igloo Thermologistics Limited secured a £160,000 investment from Deborah Meaden and Theo Paphitis for a 25% stake. This deal underscored the potential of Igloo to expand and dominate the refrigerated transport market in the UK. The founders' perseverance and strategic vision convinced the dragons, ensuring that Igloo is well-positioned for future growth and success. This investment will be pivotal in realizing their ambition to become the DHL of the refrigerated transport market, ensuring high service standards and operational efficiency across the UK.