Episode 3 Shark Tank Vietnam recently received attention with an investment of $500,000 in exchange for 8% of the shares of the three founders of Nerman, including Dang Thanh Thinh, Nguyen Van Nhat, and Ho Xuan Hai. 3 Musketeers with Dang Thanh Thinh as General Director, Nguyen Van Nhat as Joint Chief Executive Officer, and Ho Xuan Hai as Operations Director.
According to the introduction of the 3 founders, Nerman is a beauty and health care brand for men. It offers all kinds of products from bathing, skincare (skin care) to makeup for men. It can be said that this is an area that has received little attention but is very practical when today not only women but also men need beauty care.
It is known that Nerman’s products are in the “all in one” direction, meaning that a product can have many functions such as bathing, washing face, and washing hair. Currently, this brand is selling in two main forms: B2C (business to customer – online retail) and O2O (online to offline – from online to direct). In addition, this startup is currently focusing on 3 major markets: Vietnam, Thailand and Indonesia.
Nerman officially opened for sale from the beginning of 2021, by the first quarter of 2022, Nerman had 150,000 customers and sold more than 330,000 products. This is a huge number compared to a new startup just 15 months old like Nerman.
Despite being affected by the epidemic, the southern market accounted for 40%, causing the revenue to be completely closed for 4 months, but the total revenue of 2021 still reached $ 848,000 with a pre-tax profit of 10%. In 2022, the first quarter’s pre-tax revenue reached $1.3 million with a net profit after tax of 23%.
It is expected that in 2022, it will reach 10.2 million USD in revenue and grow by 50 – 100% in the following years. Nguyen Van Nhat said the startup is very lean with only 18 employees.
General manager Nguyen Van Nhat said that by the end of 2022, Nerman will “hit” strongly to the Thai market. Currently, Nerman has been testing in this market for a month and recorded a revenue of about 30,000 USD, fulfillment via the service.
The brand has a fairly modern marketing method such as using influencers (influencers). Every month, Nerman has about 300 video review (introduction) and unbox (unboxing), reaching an average of more than 10 million views/month. Conversion rates are around 7% across all channels.
On e-commerce platforms, the conversion rate is higher, about 11%. Nerman has about 10 SKUs (stock keeping units) and mixes a lot of combos (product groups). A set of perfumes is sold by the startup for VND 599,000, a set of shower gel and shampoo costs VND 399,000.
Thanh Dinh said that if compared to Xmen with the same capacity, the price of the group is 4 times higher. As for the group’s finances, currently Nerman’s actual contributed capital is 2 billion and there is an investor contributing 1 billion with 5% in June 2021 with a valuation of 1 million USD. Thus, the group currently has 8 billion assets including 4 billion cash, 4 billion raw materials, inventory, and the startup is currently debt-free.
The startup’s production cost is currently about 25% and can be optimized down to 20% when producing larger quantities. Labor and office costs are about 11%. Operating and marketing costs are about 15 – 16%. Selling expenses are about 4-5%.
When asked by Shark Phu about the reason for raising capital when the financial situation is good, Thanh Dinh said that Nerman’s estimate to raise capital for this round is 1 million USD and there was an investor in the previous round who committed to continue this round with $500,000. General Director Nerman affirmed that the participation of Sharks will help the startup become “top of mind” – achieving the highest level of awareness as brands have done in Vietnam.
Currently, Nerman’s current products are being processed in Vietnam from imported European materials, according to the recipe provided by the startup. Nerman’s R&D (product research and development) team currently has 2 people. Thanh Dinh shared that his formula is copyrighted and the product has been granted a certificate by the Hanoi Department of Health to be eligible for release to the market. In addition, the startup is also tested by VNTEST.
General Manager Nerman added more information about the group’s business model, which is subscription (collecting membership fees). Having had nearly 10 years of experience in startup and “failure”, Thanh Dinh revealed that in the previous project, due to being too dependent on capital, when there was no capital, it quickly “died”.
At the time of the epidemic, Nerman had to switch to a new business form to ensure that he could “live”, until he had the capital to develop into a top 1 brand. It is expected that by the end of the year, when it is stable. As a result of operating decisions, revenue growth, Nerman will return to the subscription model.
Shark Phu evaluated Nerman’s business results very impressively. The startup currently sells mainly online and focuses on product R&D. With existing advantages, Shark Phu offers to invest $500,000 in exchange for 20% of Nerman’s shares.
Meanwhile, Shark Binh, thinks that the startup is still new and that selling online is an uncertain factor because of its high ability to compete, copy and follow when there are many external groups with marketing capabilities. With NextTech’s available advantage as an ecosystem of e-commerce (e-commerce), logistics (logistics), Shark Binh said it is simple to “blow” the startup to Southeast Asia.
Having “charming” with the B2C segment when having invested in Coolmate at Shark Tank season 4, helping the startup increase business valuation by 4 times, Shark Binh said he can help Nerman raise capital in the following rounds from investment funds. abroad with valuations increased many times over. From such advantages, he offers to invest 1 million USD in exchange for 30% shares.
After consulting, Thanh Dinh proposed Shark Binh and Shark Phu to invest together. The two Sharks agreed, but Shark Binh gave the condition that he would participate in at least 20% of the shares. However, he made a request to ensure fairness to investors. Incidentally, Dinh proposed a level of 1 million USD in exchange for 20% shares. He also said that he can spend an additional 5% from his personal shares to bring the total number of shares to the Sharks to 25%, so it will not be diluted and be reasonable for both previous investors.
After that, Shark Binh’s analysis led Thanh Dinh to make a final proposal of 1 million USD in exchange for 27% shares, of which 7% will be taken from the personal shares of the 3 founders and receive consensus. the idea of Shark Phu and Shark Binh.