Shark Tank Vietnam: Startup Ecosoi successfully raised capital from pandan leaves

Vu Thi Lieu shares the startup story of the Ecosoi team. She herself is a lecturer in the environmental department, not a business major. Director Nguyen Van Hanh is a farmer and another companion is abroad - President of the Keep It Beautiful Vietnam organization specializing in restore traditional craft villages that are disappearing. They met at a place called Ecosoi - the place where all their dreams were fulfilled and so the whole group was fierce with this project. Ecosoi has had small fashion shows taking place in Switzerland, Canada and soon Greece.

Vu Thi Lieu shared that for each pineapple picked, farmers will throw away 2-3 kg of pandan leaves, so millions of tons of pandan leaves are thrown away every year.

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Startup Ecosoi was founded in 2021 and develops machines such as yarn separators, cotton whipping machines, and yarn carding machines to create the main products of raw yarn and whipped yarn.

According to the 2023 plan, the startup will have a new product line of industrial yarn rolls to serve the fashion industry. Expected revenue in 2022 is 4.7 billion VND, in 2023 it is 40 billion VND and in 2024 it is 71.5 billion VND, the profit margin on revenue is about 15%.

Ecosoi's model is to transfer technology to cooperatives and businesses that have raw material areas, facilities, and labor resources that are local people. According to the founder's revelation, Ecosoi's current customer is Pinatex - the largest producer of leather from pineapple fibers in the world.

Vu Thi Lieu shared that the capital raised will be used to package all processes and expand production to meet customer needs. The minimum level that customers want is 7 tons/month, but currently Ecosoi only achieves nearly 3 tons/month.

After listening to Vu Thi Lieu Shark Lien asked: "To produce 1 meter of fabric, you normally have to use up to 65 liters of water, what about you?" Startup's answer brought quite positive information: 30 liters when threshing and washing to maintain the color and quality of the yarn.

Shark Hung continued to clarify the issue, he wanted to know after the company sold the yarn stripping machine to people, how much added value must be added to the product before exporting and in addition, he asked questions about customers. Pinatex imports approximately how many tons of pineapple fiber per year.

With this question, the startup can only partially answer, which is about 5% added value, but Pinatex's data is internal information of that company so the startup cannot understand clearly. Ms. Lieu only estimates that Ecosoi is accounting for 2-5% of Pinatex's market share and CEO Ecosoi believes that for the textile industry, if it accounts for 0.1%, it is an honor.

Shark Hung and Shark Binh compared pineapple fiber with cotton fiber. The CEO gave information that pineapple fiber is 2.5 times more expensive, absorbs sweat equally, but its physical and mechanical properties are much more durable than cotton fiber. If you want to soften pineapple fibers, there are many steps and methods that ethnic people have applied, such as dew drying and stone rubbing.

Shark Hung Anh believes that Startups need to rebuild their company model, not just stopping at an idea for each person in one place. He also reiterated the risk of price squeeze when depending on a single customer. For these reasons, he offered $100,000 to own 40% of the shares.

Shark Lien and Shark Erik immediately offered a competitive price: 100,000 USD for 36% of shares with the promise to help the Startup go faster and take off successfully. Refusing to give way, Shark Hung Anh reduced its ownership percentage to 30% with support in properly restructuring the company, operating more professionally and effectively than currently.

CEO Vu Thi Lieu shared that in this round of capital raising, the maximum level set by the company is 25%. The shark alliance continued to make a final deal of 100,000 USD for 30% of the shares, while the Quang shark offered 3 billion VND for 30% of the shares, about 700 million VND more than before.

After a period of discussion, CEO Vu Thi Lieu decided to choose Shark Hung Anh because she also had a guide from Quang Nam. In addition, the female CEO also wants to avoid valuing the startup too low.