Know How A Indian Fast Fashion Denim Startup Freakins Got ₹10 Lakhs in Shark Tank

Freakins is a startup based in India that specializes in fast fashion denim products. They focus on creating apparel designed for the diverse body types of Indian women, with new collections launched every week. The brand offers more than 35 different categories and over 1500 unique styles, all crafted from denim. In the last three years, they have successfully completed 250,000 orders across India. Puneet mentioned that their brand has gained attention from Bollywood stars and is particularly loved by college students. Customers can find their products on their own website as well as on popular platforms like Amazon and Nykaa.

Click here to visit their official website: Freakins

Related: Fashion Spotlight on Bummer: From Shark Tank India

Puneet Sehgal and Shaan Shah started a company called Freakins. Puneet hails from Bombay, while Shaan is from Ahmedabad. Shaan comes from a family that has a background in textile manufacturing. Prior to founding Freakins, Puneet served as the chief strategy officer at Nykaa.

The founders are currently looking for an investment of ₹70 Lakhs in exchange for 1% equity, which values their company at ₹70 Crores. Within the ownership structure, Puneet holds 54%, Shaan owns 36%, and Shaan’s uncle has a 5% stake in the business. They also have an employee stock option plan (ESOP) totaling 5%. Shaan noted that they initially struggled with their business operations, which led them to bring Puneet on board to assist. Puneet mentioned that they are aiming to secure ₹4.5 crores from investors, targeting a market cap between ₹30-60 Crore. Additionally, they are collaborating with another company to help facilitate fundraising at their ₹70 Crore valuation.

Freakins generated ₹90 lakhs in revenue during their first financial year, FY19-20. This impressive start was followed by remarkable growth of 644%, allowing them to finish FY20-21 with earnings of ₹6.7 Crores. In the following fiscal year, FY21-22, their revenue reached ₹10.4 Crores. Shaan mentioned that they achieved average monthly sales of ₹90 lakhs in the first half of FY22-23. They broke even in their initial year, but then faced losses of ₹2.1 Crores in 2021 and ₹3.8 Crores in 2022. Currently, they are experiencing ongoing losses of ₹10 lakhs each month in FY22-23, although their gross margin stands at a healthy 63%. In September 2022 alone, Freakins made ₹1.05 Crores in net revenue, while also spending ₹12 lakhs on performance marketing during that month.

Anupam said that the company was chaotic and not well-organized. Because of this, he decided not to invest in the company. He also mentioned that the company lacks a clear design style, which is important for branding and communication. Peyush found the company’s situation too complicated, which made him decide it wasn’t worth investing in. Namita agreed with Peyush’s assessment and chose to back out as well. Aman thought the company’s founders should concentrate on building a strong brand. However, he also decided to stay out of investing at this time.

Vineeta was the only one who was willing to invest. She offered ₹50 lakhs (which is 5 million rupees) for a 2.5% share in the company. This means she was valuing the company at ₹20 crores (200 million rupees). She also stated that part of her investment would come as debt, meaning the company would have to pay back that money with interest (12% per year). Vineeta made it clear that her offer was not negotiable. The company founders tried to negotiate by asking for ₹50 lakhs for only 2% ownership instead of 2.5%. However, Vineeta refused this counter-offer and stuck to her original deal.

Eventually, the founders agreed to Vineeta’s original offer of ₹50 lakhs for 2.5%. They shook hands, which means they officially made a deal.

Our research indicates that their deal with Vineeta Singh on Shark Tank India didn’t finalize after the episode aired. However, the business is doing well following their appearance. As of January 2024, they boast a robust Instagram presence with over 363,000 followers, and many of their reels have garnered millions of views, enhancing their reach within their target audience.