Key Points:
- Investment: £100,000
- Investor: Tej Lalvani and Peter Jones
- Equity Offered: 10% (5% each)
- Business: WhyHangry - affordable private chef platform
- Target Audience: Busy professionals and social hosts in London
- Challenges: Scaling the business, logistics of chef availability, competition
The Pitch
Sidi Mittal and Hainim Chang, founders of WhyHangry, entered the den seeking £100,000 for a 4% stake in their innovative private chef platform. WhyHangry aims to make hosting dinner parties effortless and affordable, with prices starting from £20 per person and a minimum spend of £100, including groceries. Their service, which has facilitated 700 dinner parties since May 2019, promises to deliver a hassle-free dining experience by handling everything from menu creation to post-meal cleanup.
Financials and Offer
The entrepreneurs reported a revenue of £40,000-£45,000 in their first year and projected a significant increase to £600,000 in 2021, with ambitions to reach £25 million by 2025. They revealed a gross margin of 35% and highlighted their business model's scalability by leveraging a pool of over 70 chefs.
Initially, Sidi and Hainim requested £100,000 for 4% equity. Both Peter Jones and Tej Lalvani, intrigued by the concept and the founders' commitment, offered £100,000 each for 10% equity. After some negotiation, a compromise was reached where both dragons agreed to share the investment, each taking 5% for a combined total of 10%.
Challenges Highlighted by the Dragons
Chef Availability and Scaling
Peter Jones expressed concerns about the availability of enough skilled chefs to meet the ambitious targets set by the founders. The scalability of ensuring consistent service quality with a large number of chefs was a significant point of scrutiny.
Logistical Issues
Deborah Meaden pointed out the logistical challenges of ensuring timely grocery deliveries and chef reliability, especially as the business scales. She emphasized the complexities involved in the catering industry, citing personal experience.
Investment Commitment
The dragons also questioned the level of personal financial commitment from the founders, noting that they had only invested £10,000 of their own money while drawing no salary for 16 months. This was seen as a potential indicator of their confidence and dedication to the business.
Conclusion
Despite the challenges outlined, Sidi and Hainim successfully secured the desired investment from their preferred dragons. By demonstrating a clear understanding of their market, a scalable business model, and strong personal commitment, they convinced Tej Lalvani and Peter Jones to invest £100,000 for a 10% stake in WhyHangry. With this investment, WhyHangry aims to expand its operations, refine its logistics, and ultimately make hosting dinner parties a breeze for customers across London and beyond.
The future looks promising for WhyHangry as they embark on this new journey with the support and expertise of two seasoned investors, bringing them one step closer to their goal of becoming a nationwide service.