Imagimake on Shark Tank India: A Toy Brand Valued at ₹125 Crores

Imagimake

Three points you will get to know in this article:

  • Imagimake designs puzzles, DIY kits, and educational toys sold globally.
  • Achieved ₹56 Crores revenue in FY23; projected ₹90 Crores for FY24-25.
  • Sharks raised concerns about valuation but admired their innovative approach.

What is Imagimake?

Imagimake logo

Imagimake is an Indian startup revolutionising the toy industry with its DIY kits, puzzles, and educational games. Founded in 2014 by husband-and-wife duo Ravi Kumar and Disha Katharani, the company’s products blend fun and learning, teaching kids about history, geography, and culture.

Click here to visit their official website : Imagimake

Imagimake’s toys, including their best-selling India Map puzzle, are designed to spark curiosity and creativity in children. With a patented quilling tool for mess-free crafting and 120 SKUs in their portfolio, they cater to a wide range of interests and age groups.

Imagimake’s Global Reach

Imagimake manufactures its products in-house at a factory staffed by 250 workers, supported by a team of 40 sales professionals and 40 specialists in finance, marketing, and design. This operational efficiency allows them to maintain strict quality standards while introducing new designs regularly.

The company exports its products to global markets, with 90% of export revenue coming from the US. Their patented designs, registered in both India and the US, have helped establish a strong international presence.

Financial Growth and Revenue Highlights

Imagimake has shown consistent growth despite challenges:

  • FY20-21 Revenue: ₹13 Crores; EBITDA ₹15 Lakhs.
  • FY21-22 Revenue: ₹29 Crores; EBITDA -₹35 Lakhs.
  • FY22-23 Revenue: ₹40 Crores; EBITDA -₹90 Lakhs.
  • FY23-24 Revenue: ₹56 Crores; EBITDA -₹30 Lakhs.
  • FY24-25 Projection: ₹90 Crores with ₹2.4 Crores EBITDA.

The company has already earned ₹42.5 Crores by October 2024, achieving a positive EBITDA of ₹1.2 Crores.

Revenue Breakdown

  • E-commerce Exports : 35%
  • Domestic E-commerce : 35%
  • General & Modern Trade : 18%
  • Quick Commerce : 12%

Imagimake’s products are available on platforms like Amazon and in 4,000 offline stores, ensuring a balanced mix of digital and physical sales.

Challenges Highlighted During the Pitch

Despite their success, Imagimake faces significant challenges:

1. High Working Capital Requirements

Expanding in the US market requires substantial capital, which has been difficult to manage without external investment.

2. Inventory and Receivables

With ₹8 Crores worth of inventory and ₹5.5 Crores in receivables, managing cash flow has become a pressing issue.

3. Competitive Market

The toy industry’s competitive nature demands constant innovation and aggressive marketing, areas where Imagimake needs support.

Imagimake on Shark Tank India

Ravi and Disha sought ₹1.5 Crores for 1.2% equity, valuing the company at ₹125 Crores. They shared their vision for expanding further into international markets and overcoming financial challenges with the sharks.

Shark Reactions to Imagimake’s Valuation

The pitch received a mix of admiration and skepticism from the sharks:

  • Sharks Aman Gupta and Kunal Bahl: Both exited early, feeling the founders didn’t need their help given their established business model.
  • Shark Azhar Iqbal: Exited due to doubts about where he could add value.
  • Shark Vineeta Singh: Offered ₹50 Lakhs for 0.5% equity, with the remainder as debt at 10% interest over three years. Her offer reflected her respect for the founders’ journey.
  • Shark Ritesh Agarwal: Proposed ₹1.5 Crores for 1.2% equity, valuing the company at ₹125 Crores. He expressed interest in helping with the company’s financial and operational challenges.

Founders’ Decision: No Deal

The founders ultimately declined both offers, citing higher expectations for their valuation. While the sharks respected their decision, the outcome highlighted a recurring theme: the gap between founders’ valuation expectations and investors’ perspectives.

What Makes Imagimake Unique?

1. Educational Focus

Imagimake’s products are designed to educate as much as entertain, blending play with learning. Their India Map puzzle is a prime example, helping kids understand the country’s geography while having fun.

2. Patented Innovations

The patented quilling tool and other unique designs set Imagimake apart in a crowded market, ensuring they stay ahead of competitors.

3. Strong Manufacturing Capabilities

With in-house production and a robust team, Imagimake maintains quality control while scaling efficiently.

Lessons from Imagimake’s Shark Tank India Appearance

  • While ambition is essential, aligning valuation with market realities can improve chances of securing investment.
  • Identifying and resolving issues like working capital constraints and inventory management can make the business more attractive to investors.
  • Even established businesses can benefit from the strategic input of experienced investors.

Opportunities for Imagimake’s Growth

Despite leaving the tank without a deal, Imagimake has ample opportunities for growth:

Expand in the US Market

With 90% of export revenue coming from the US, doubling down on this market can drive significant growth.

Enhance Cash Flow Management

Streamlining inventory and receivables will improve liquidity, enabling smoother operations.

Explore New Categories

Introducing additional educational products or targeting older age groups could open new revenue streams.

Imagimake’s story reflects the power of innovation, resilience, and a passion for education. From selling 1 lakh units per month to achieving ₹56 Crores in revenue, the brand has proven its ability to create value in a competitive industry.

While the Shark Tank India pitch didn’t secure funding, it showcased Imagimake’s potential and the founders’ unwavering commitment. With strategic adjustments and a focus on growth, the company is poised to leave a lasting impact on the global toy industry.

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