Watchout Wearables’ INR 2 Crore Win on Shark Tank India

Watchout Wearables is a small company that makes smartwatches for kids. These smartwatches have a camera, the ability to make video calls, GPS tracking to know where the kids are, and a way to send messages in real-time. The main reason for these watches is to make sure kids can always be in touch with their parents.

The company makes everything for these watches themselves, including the software. A group of potential investors (referred to as ‘sharks’) was interested in the product and its potential in the market, but they had concerns about how much the company was worth, the competition they might face, and whether the business could grow a lot.

Click here to visit their official website: Watchout Wearables

One important thing about the company’s smartwatches is that they can have a SIM card inside, which lets them stay connected all the time and work on their own without needing to be connected to a phone. Also, they have a feature where if a kid is in trouble, they can press a button for a few seconds and it will let the parents know and provide a recording of the sound around the kid for the last 30 seconds, along with their location. Another feature is “Class mode” which helps kids avoid being distracted in class.

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This smartwatch startup was founded by Abhishek Baheti, who serves as the co-founder and CEO, alongside Noopur Baheti in 2021. Having worked for four years at Pidilite Industries Limited, Abhishek is skilled in business marketing and has handled various roles.

He pursued his MBA in Marketing from the Symbiosis Centre For Management and Human Resource Development. The latest model of children’s smartwatches is the Watchout Wearables, offering top-notch security features such as WiFi connectivity, a camera, GPS tracking, real-time communication, and video calls.

During the Shark Tank negotiations with Watchout Wearables, the entrepreneurs, Abhishek Baheti and Divyajeet Baheti, presented their startup that focused on manufacturing smartwatches for kids. The key features of their product included a camera, video calling, GPS tracking, real-time messaging, a SIM card slot for constant connectivity, an SOS feature, and Class mode to avoid distractions.

Abhishek shared that the company had been in operation since 2018, having sold over 3000 units of their smartwatches. In terms of revenue, they generated ₹1.1 Crore in FY 2021-2022 and ₹1.4 Crore in FY 2022-2023, with ₹25 Lakhs recorded in August 2022. The sharks were impressed by the sales and feedback but expressed concerns about the valuation, competition, and scalability of the business.

When questioned about the cost to manufacture one watch and its selling price, Abhishek revealed that it cost ₹3500 to make a watch, which sold for ₹11,999, yielding a gross margin of around 70%. Despite this high margin, the sharks believed the valuation was too high and expressed doubts regarding the profitability and unit economics of the business.

After some negotiation, Anupam Mittal and Vineeta Singh offered ₹2 Crore with half of it as debt at 15% interest in exchange for 10% equity. Abhishek countered with ₹1 Crore for 5% equity and also asked for ₹1 Crore as debt at 15% interest. Anupam and Vineeta maintained their original offer, highlighting that the market dictated the valuation, but Abhishek then proposed 7.5% equity, which was rejected.

Ultimately, Abhishek accepted the offer of ₹2 Crore, 10% equity, and ₹1 Crore debt at 15% interest, deciding to move forward with the deal. This negotiation showcased the challenging back-and-forth typical of the Shark Tank experience, where valuation, profitability, and business potential were crucial factors in the decision-making process.

As of July 2024, Watchout Wearables is thriving. Their products are accessible through their website and on Amazon. They proudly declare themselves as India’s leading kids’ smartwatch brand on social media. Customers and the media have given them glowing reviews. They remain committed to transforming their watch into a worldwide sensation and an essential household item.