Spacetoco Have Trouble Convincing The Sharks of Their Valuation | Shark Tank AUS

next into the tank are Franco Jeremy and Daniel with an idea that brings people and places together I think we're a product for the everyday Australian in every nook and cranny across Australia as well um it really suits the everyday [Music] person good day sharks my name is Franco and this is Jeremy and Dan and we are the three co-founders of of SPAC too.com today we are seeking 210,000 for 14% of our company we help people find the space they need for any activity we help space owners share their space quickly and easily we do this with our online platform a sharing economy website for the short-term hire of space take for example the unused space above a bookstore that's been booked 18 times in the last 6 months earning that host over $2,500 in Revenue there's also the little cafe that recently listed its Courtyard Garden space for celebrations and meetups making it a space to community we launched our pilot in mid 2017 with over 400 spaces now in West Australia and South Australia enjoying features such as uh automated payment flows fully fil filterable search and live availability we're learning how to match local people with local spaces and that brings us here to you guys the Sharks we need somebody to join our family to help us to manage the exponential growth great excellent so that's 210,000 for 14% of your business valuing it at a cool 1 and A2 mil that's right so obviously you're here for an investment cuz you're going to need a lot more than what you asked for today to get abs get it going so we have already raised 100,000 and we've got another 57,000 coming in through a an accelerator program that we've joined can we just understand how much how much of the business you guys own please uh at this stage 29% each 29% that's pretty good okay so how do you get your customers so we have a thing called The Host partner pack so they are things like the book housee space card which can sit on the counter of the bookstore example and the cafe example I gave you earlier this this is a sticky sticking a window right correct in our first couple of months 95% of our bookings came from a host that had used one or more elements of the host partner pack what kind of transaction level have you done and what sort of Revenue are you getting so far so we've had 185 transactions so far and that graph is going up happily yeah so we've turned over 27,000 in overall transaction prices and we've made around $3,800 to date so how do you get to the $1.5 million valuation given that your Revenue is$ 3,800 at the moment we've taken a lot of advice in terms of where we feel the business can go uh there's a lot of blue sky as well uh there's the great untapped residential Marketplace yeah I I don't need convincing about the model in La a lot of film locations are found through a website like this how do you break through and get market share and revenue that justifies your valuation one of our major pivots recently has been City councils City councils come with a lot of spaces um we've got one city of Vincent they've listed uh at least 60 spaces at this stage and about another 10 to go um the city of Canyon with over 100 spaces going to be listed over the next couple of months each of those has about $400,000 in turnover of um space bookings per year on an average of about 20% occupancy rate so it's a really low occupancy rate across the facilities and they are literally picking up that turnover and putting it into our business and we take our cut so we take 15% each and every transaction so they're happy to hand over their income and give you a 15% clip straight up it's important to understand that the processes for councils at the moment aren't really very smooth your 15% commission will actually save them on real wages real Administration cost I'm still intrigued about the how you going to find your customer how do how do I find you some of our uh space owners they've got you you know 20,000 Instagram followers for example and when they say book our space on Space Deco which they do do that message is getting Amplified out um organically it's not something we're wearing the cost of either you know these hosts do bring a captive audience Jeremy you've got 185 bookings so far your argument's not really stacking up when you say 20,000 followers and you've only got 185 so what else have you got up your sleeve well uh the the host partner pack example is is is strong it is working for us and Jeremy you got to talk to us about value and about acquisition costs so do you know your unit economics at this point in time well we're not really measuring it at at this stage um on guys how know how do you know where you spending money how do you know where you spending your money then if you're not recording what it cost to do business how do you know if you've actually got a viable business what are the three critical numbers that you guys look at every single day to know that you're on a trajectory well that 185 transactions we're watching that trans action figure very very closely did you have to send 10,000 people to get one conversion what is your conversion rate unsure at this stage we're unsure okay how big's the traffic uh consumer site is probably around the 500 to 1,000 people on the site okay and how many transactions are you doing a week uh we did 20 last week okay so you are way under industry average I've got one critical question sure who here is accountable for the tech and the quality of the user experience right are you a techie I don't I don't code the website myself but I manage the entire project okay so what's so could you could you write it if you had to no gentlemen how do you think your pitch is going right now where we are I guess you could say early can you rescue this [Music] pitch for us at the moment it's about the city council play where this Friday flying to to south Australia to speak with 15 councilors at once that all started with a conversation with one Council and they were on the pathway to actually building their own product and we locked up and said well it's already built and we just take a small Commission on the way and they've essentially stopped that project that they've just invested 12 months of time in and that's a pivotal movement where you're taking this company at the moment absolutely I really love what you're doing it's definitely a land grab literally it's a land grab you've got to get stock as fast as you possibly can um because without critical mass you're IR relevant to the consumer side the valuation is a little bit Blue Sky I think to quote somebody here in the tank for that reason I'm out all right thank [Music] you it's great to see you getting um some wood traction though and it seems like that the doors that you're knocking on they're opening which is great for me however today there was too many holes in this presentation for this investment I'm out thank you than thank you three sharks left two sharks are out I can tell you where I'm at it's a proven Marketplace there's a huge company in the US there's a two significant competitors in the UK but at 1.5 million valuation I wish you well but I'm out thank you Glenn what's you thinking well look there are a lot of two-sided marketplaces out there for different things like convention space like Hotel business room space I think your Council pivot is probably the right one let's go Ahad and do a land grab on stock of All Sorts but uh for me valuation looks high so for that reason I'm out thank you okay thank you thank you for the advice as well lots of things we don't know we don't know values we don't know no costs so makes it really hard to understand the council it's a fantastic Avenue to go down I really really like that so um you need tick you need it pretty bad you put up to 10% the side for a tech co-founder cuz you should have that and you're ballsed up but not having it okay it's really bad M you going to put up or shut up if you were further along i' I'd probably I'd probably take the 1.5 I think he was probably reasonably speak that to you in six maybe 12 months to me at the moment it's it's 21% after delution right so Steve can you just summarize your offer yeah I'll just I'll do that in one second so put the offer up the offer is 210,000 bucks for 21% post your uh recapitalizing for the tech co-founder so 210,000 for 21% but you've also as a condition got to put 10% of your Equity aside to someone who come in and own the technical side of your business that is Steve's offer why would you Force tech onto these guys when they're good at Contracting it there's good Services out there that know how to build two-sided Marketplace and maintain them and you got a guy who can supervise it and now you're forcing them down to to about a 20% share each which almost now becomes annoying that what Glen Glenn's really good at selling kitty litter so let's just leave him over there Jim maybe Steve done a couple of these and he might know what he's talking about just saying what are you going to do gentlemen can can we have a quick power absolutely yep just remember he's duding you to your less than him go and have a power out guys thank you your money this is serious so Steve do you know you know they have competition here right now there's lots of competition in this place competition is never a reason not to do a business I think Steve would be an extraordinary asset for the business I don't know just what the other two were saying on the end what Glen was saying we know we need we know we need tick so you had your power was it an easy discussion no no oh so you had a bit of disagreement between the three of you absolutely all right so you were offered 210,000 for 21% of your business by Steve with a condition that you also allocate equity for a new tech partner so what's your decision we valued at uh a million dollars um previously back in December we've now made some major steps forward uh and we just really want to recognize the fact that we've signed two City councils we've got another with a pen over the paper we'd like to counter offer with 20% 20% um uh yes okay well done thank you so fantastic you guys your next pitch will be a lot better that's for sure good luck working with Steve seriously and now the job begins shk Tank season 5 rent a space on Space to co it's all good get a studio on there we got some capital and we got a shark I'd say it's a good day fishing e