Ms. Phạm Thị Thu Hằng – Founder of Pơ Lang.
The first startup to appear in episode 6 of Shark Tank Vietnam season 7 was Pơ Lang, a brand that develops skincare products from fresh avocados. They have successfully researched and created 14 products, including avocado oil, avocado lipstick, facial cleanser, and shampoo… The main ingredient is avocado from the Central Highlands – the region with the largest avocado yield in the country, with 200,000 tons per year.
A “miracle drug for the skin” that suffered a devastating price drop
“My sisters and all the children in the Central Highlands grew up naturally like this: having avocado for breakfast instead of rice. Avocado is not just a fruit to me, but also my childhood.
In 2016, the price of avocado reached 120,000 VND/kg. My parents and other avocado farmers planned to grow avocados, expecting that even if the price dropped in the next 3 years, it would still be at least 30,000 VND/kg, and we would still make a profit. However, by 2019, the price of avocado had dropped to just a few thousand VND per kg.
I remember a time when my father, an old man, had to stand in the hot sun to beg the traders to increase the price by just 500 VND/kg. That is why in 2019 I decided to quit my job to find a new direction for the avocados from my hometown,” said Ms. Phạm Thị Thu Hằng, Founder of Pơ Lang.
Coming to Shark Tank, Pơ Lang called for an investment of 2 billion VND in exchange for 10% of the company’s shares to expand the production facility, buy more machinery, stock up on raw materials, and invest in research and development as well as product improvement.
“The content of vitamin K in avocado is 30% higher than that of cucumber, vitamin C is 4 times higher, and vitamin B3 is 14 times higher. Most especially, the content of vitamin E in avocado is 69 times higher than that of cucumber. Avocado can be said to be a miracle drug for the skin, but it is not being utilized to its full potential,” said Ms. Hằng, adding that Pơ Lang has 2 masters of experimental biology who have been researching avocados for many years and have scientific research topics on avocado extraction and its application in commercial production.
In terms of finances, Pơ Lang was established in 2020 and reached a revenue of 2.5 billion VND in 2023. The average growth rate is 50%, focusing on two main channels: online and agent systems. In the first half of 2024, revenue reached 3 billion VND, with a profit after tax of 360 million VND, equivalent to 12%. It is expected that in 2024, revenue will reach 8 billion VND with a profit of 1 billion VND.
Pơ Lang’s products.
Shark Lê Mỹ Nga highly appreciated the raw material, even saying that “I have never tasted such delicious avocados.” However, she wondered if the startup was addressing the right “pain point” to create the product.
“There are many ways to solve the problem of consumption, for example, it would be easier to find an export route or other solutions. Making cosmetics is a difficult path. If you can convince the Sharks why you are doing this and that it is a must, then we will move on to the next step of checking the technology and techniques,” said the Chairman of WeAngels Capital Fund.
In response, Founder Phạm Thị Thu Hằng said that the fresh, beautiful, and delicious avocados will be sold for consumers to enjoy. Avocados with unattractive peels but unchanged pulp quality will be used for processing by Pơ Lang.
3 Sharks formed a coalition, while the Founder negotiated the deal, making Shark Bình straightforward
Shark Nguyễn Văn Thái wondered about the output and the investment in the factory and experiments. The Founder of Pơ Lang said that tons of finished products can be supplied monthly. It takes 20 kg of fresh avocado to produce 1 kg of extract. The cost of raw materials is about 500,000 VND/kg of concentrated extract type 1, and about 600,000 VND/kg for oil. The capital for establishing the company in 2020 was 300 million VND, and an additional investment of 1.7 billion VND was made at the beginning of 2024.
As an entrepreneur in the cosmetics manufacturing industry, Shark Thái thought that the company’s valuation of 20 billion VND was too high because, in reality, the Founder wanted to “rescue” avocados. In addition, India has long been able to produce similar products with both excellent quality and price, raising the question of competitiveness.
Therefore, Shark Thái offered to invest 2 billion VND for 30% of the shares, along with a commitment to consume all products as long as the price is competitive.
Shark Phạm Thanh Hưng withdrew because the startup did not match his investment preferences, and there was no outstanding advantage to convince him. Shark Lê Mỹ Nga also made a similar decision because Pơ Lang did not fit the investment criteria of the WeAngels Capital fund.
Meanwhile, Shark Minh Beta believed that avocado is a trending fruit worldwide and offered to support the startup in terms of communication and sharing the deal with Shark Thái. Shark Nguyễn Hòa Bình also proposed to “join the coalition,” forming an alliance of 3 Sharks.
Receiving investment offers from 3 Sharks, Ms. Hằng wanted to raise more capital and asked Shark Thái to change the deal to 3 billion VND for 30% of the shares. The female Founder then tried to convince the Sharks to raise the company’s valuation by presenting expected revenue. However, the investors believed that Pơ Lang’s products are still in the early stages and need a lot of support in terms of technology, market, and more.
The coalition of 3 Sharks and the Founder of Pơ Lang.
At this point, the Founder made another proposal: “When the 3 billion VND is invested, each Shark will firmly hold 5% of the shares. Until the end of the year, if Pơ Lang reaches a revenue of 8 billion VND, each Shark will receive 10% of the shares. But if the revenue exceeds 8 billion VND many times, at least double…“
“Actually, I advise you this,” Shark Bình suddenly interrupted. “When you invite investors, we should strive to be in the same boat, and we all work together for the unlimited development of the company. The deal you are offering puts us in a conflict of interest.”
“At that time, investors will not want you to achieve the revenue target so that after 1 year, they will have more shares. Conversely, you will also have an internal motive to manipulate the numbers to gain more benefits. Deals like this often end up in ruins,” Shark Bình said straightforwardly.
“30% is very difficult for me and does not create motivation for my employees, so I would like to renegotiate the deal,” the female Founder continued to persuade.
“I’m out,” said Shark Bình.
After some thought, the Founder of Pơ Lang decided to accept the offer from Shark Thái, Shark Bình, and Shark Minh Beta, who joined forces to invest 3 billion VND for 30% of the shares, with each shark taking 10%.
“For the first time in the history of Shark Tank Vietnam from season 1 to now, I’ve seen a deal closed by sulking,” Shark Hưng commented on the deal.
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