Zuvaa – African-inspired Fashion
NO DEAL
EPISODE SUMMARY
🕓 Air Date: January 21, 2018
Asking For:
$460,000 for 10%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
Zuvaa is the fastest-growing online marketplace connecting African designers with global consumers for unique and vibrant fashion pieces.
WATCH HERE
IN A RUSH?
Click these to jump to the section you want to read.
Background Story
Kelechi Anyadiegwa, the founder and CEO of Zuvaa, grew up in Nigeria surrounded by the vibrant prints and textiles of African culture. Inspired by the talent of African designers and their lack of access to a global market, Kelechi founded Zuvaa in Atlanta, Georgia. While in grad school at Carnegie-Mellon, she started the business with a $500 investment, fueled by her personal connection to African fashion.
Zuvaa quickly turned into a thriving venture, generating over $2 million in sales in under 2.5 years. Kelechi’s vision is to showcase the beauty of Africa through design, not just in fashion but also in home apparel and art. However, she recognizes the need for investment to scale the online platform and enhance its capabilities.
The Product
Zuvaa operates as an online marketplace that connects consumers globally with over 85 handpicked African designers. Consumers browse the platform, place orders, and receive unique fashion pieces directly from the designer or Zuvaa’s fulfillment center in Atlanta.
The platform offers a diverse range of designs, including jumpsuits, beachwear, and other fashion items made from materials like ashoké, Ankara print, wax print, chiffon, and suede. The business employs a strict vetting policy, ensuring quality control and understanding the designers’ processes for fulfillment and customer service.
Zuvaa charges designers a 17% flat commission to be on the marketplace, along with a $50 monthly fee. The monthly revenue is approximately $50,000, with a monthly burn of $50,000, resulting in a break-even point.
How It Went
The company’s position before Shark Tank
Zuvaa has achieved significant success, boasting monthly sales of $220,000 and attracting around 120,000 visitors to its platform. The company has been bootstrapped for three years, with Kelechi owning 92% of the business and the remaining 8% shared among other advisers. The valuation of $4.6 million is based on a 2X multiple of the Gross Merchandise Value (GMV) from the previous year.
While Zuvaa is currently profitable and maintains a sustainable business model, Kelechi seeks investment to build a more scalable online platform. The negotiation reveals that Zuvaa’s burn rate matches its monthly revenue, indicating a balanced financial position. However, the Sharks express concerns about the high valuation and the amount of equity offered.
The Negotiations:
The negotiations unfold with the Sharks expressing admiration for Kelechi’s accomplishments but raising concerns about the company’s valuation. Despite Kelechi’s impressive sales figures and growth, the Sharks find it challenging to justify the $460,000 investment for a 10% stake, leading to offers being rejected. Each Shark provides insights and feedback on the business model, with Mark Cuban and Lori Greiner expressing reservations about the valuation.
Daymond John raises legal concerns regarding potential liabilities associated with dealing with numerous designers. When Kevin O’Leary offers a debt deal at 12% interest with 10% equity, Kelechi declines, emphasizing her confidence in Zuvaa’s value. In the end, no deal is made, but Kelechi remains steadfast in her belief in the company’s worth.
