EZO: Revolutionizing Retail Billing with Challenges Ahead – Shark Tank India Season 4

Introduction

In a recent episode of Shark Tank India, the founders of EZO presented their innovative billing solution designed for shopkeepers and small retail businesses. With its multifunctional billing machines and Point of Sale (POS) system, EZO aims to simplify retail operations, especially in non-metro cities. Despite their impressive pitch, the sharks had concerns about the business's financials and market scalability, which ultimately led to no deal.

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About EZO

• Company Name: EZO
• Website: https://store.ezobooks.in/
• Founders: RishiKesh Sakarkar (young, male), Gauravkumar Kate (young, male), Makarand Kate (young, male)
• Location: Akola, Maharashtra
• Core Offering: Billing application, billing machines, and POS systems tailored for all retail businesses.
• Reach:
  • Onboarded 35,000 retailers over the last two years.
  • Available in 11 languages and accessible via the Google Play Store.
  • Primarily serves 600 non-metro cities.

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Key Features of EZO

• MRP: ₹7,001, but sold at ₹6,001, including a printer and a one-year software subscription.
• Renewal Fee: ₹3,000 annually (with discounts of ₹300-₹400 on renewals).
• Dashboard Features: Tracks all transactions, including cash and online payments.

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Financial Overview

Ask

• ₹50 Lakh for 0.33% equity, valuing the company at ₹150 Crores.

Sales Performance

• FY 22-23: ₹4 Crores, with a loss of ₹1.5 Crores.
• FY 23-24: ₹12 Crores, with a loss of ₹12 Crores.
• FY 24-25 (till September): ₹10.5 Crores, with a loss of ₹1 Crore.
• FY 24-25 (projected): ₹30 Crores.

Retailer Onboarding

• FY 22-23: 5,000 retailers onboarded.
• FY 23-24: 15,000 retailers onboarded.
• FY 24-25 (till September): 15,000 retailers onboarded.

Unit Economics

• GST: 15%
• Making Cost: 26%
• Commissions: 22%
• Packaging: 3%
• Shipping: 2%
• Others: 4%
• Marketing: 13%
• Net Margin: 15%

Expense Breakdown

• GST (hardware): 18%
• Delivery Cost: 24%
• Customer Acquisition & Support: 41%
• IT Infrastructure: 7%
• Fixed Cost: 18%
• Renewal Cost: 7%
• EBITDA: -15%

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Sharks’ Feedback

Key Concerns

1. Namita Thapar: Questioned the inflated numbers and raised concerns about business integrity.
2. Kunal Bahl: Felt the financials presented during the pitch did not align with the company’s actual financial situation.
3. Aman Gupta: Highlighted the risk of commoditization, stating competitors could offer similar products at lower prices, impacting growth.
4. Ritesh Agarwal: Believed the product lacked market fit.
5. Anupam Mittal: Mentioned the market is already saturated with similar solutions.

Final Outcome

All the sharks opted out, and EZO did not secure a deal.

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Challenges for EZO

1. Market Saturation: The billing and POS space has numerous players, making differentiation challenging.
2. Financial Transparency: Discrepancies in financial reporting raised concerns among the sharks.
3. Scalability: Questions about whether the product is fit for a broader market.
4. High Losses: Consistent losses despite growing revenue indicate operational inefficiencies.

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Conclusion

EZO has made commendable strides in onboarding 35,000 retailers across non-metro cities, but the challenges highlighted during the pitch—ranging from market saturation to financial integrity—need to be addressed for sustainable growth. While the sharks passed on investing, the founders’ vision to empower small retailers remains noteworthy, with room for improvement in execution and scalability.