What is the primary problem Room2shop aims to solve?

According to Slide 3, the company focuses on helping sellers liquidate 'dead stocks' and second-hand goods. By providing an auction facility, they allow sellers to reach a nationwide audience of buyers who can purchase items online without traveling, which the deck claims 'eradicates' the problem of stagnant inventory.

How does the e-MLM system work?

Detailed on Slide 5, the e-MLM (Electronic Multi-Level Marketing) system provides each buyer with a unique referral code. When a referred friend makes a purchase at any point in the future, the original buyer receives a share of the purchase margin. The stated goal is to lower the Cost of Customer Acquisition (CAC).

What are the company's financial projections?

Slide 8 outlines a roadmap to reach 40 cities and 50,000 sellers by 2018, with EBIDTA margins starting to 'take off by 3%.' By 2020, they targeted 1.5 lakh sellers across India with EBIDTA margins reaching 8-10%.

What is the current funding status mentioned in the deck?

Slide 9 explicitly states that all funding to date has been 'in-house,' totaling $165,000. They had not raised any external funds at the time of the pitch, yet they applied a $6.67 million valuation to the company, representing a 15% equity cap for the proposed $1 million investment.

Room2shop Pitch Deck Teardown: A Multi-Model E-Commerce

Room2shop is a Surat-based e-commerce platform that attempts to solve the 'dead stock' problem for retailers through a nationwide auction facility. The deck, dating to approximately 2016, outlines a business model that generates revenue via 5-20% sales commissions. A significant portion of their strategy relies on 'e-MLM,' a multi-level marketing referral system designed to lower customer acquisition costs by sharing purchase margins with referring buyers. While the company reported 30 Lakhs in revenue and $165,000 in internal funding, the deck struggles with a lack of clear market sizing (TA…

Key takeaways

The company operates a hybrid model including retail, wholesale, and an auction facility for second-hand goods and dead stock (Slide 3).
Revenue is generated through a fixed commission rate ranging from 5% to 20% depending on the product category (Slide 4).
A core 'USP' is the e-MLM plan, which uses unique buyer codes to share purchase margins with referrers to lower acquisition costs (Slide 5).
The deck claims a $1.6 billion total e-sales market in India but suggests they face 'No Real Competition' in the auction sector (Slide 6).
The founding team brings significant experience from the banking sector, specifically ICICI and HDFC Bank (Slide 7).
As of April 2016, the company reported 30 Lakhs in revenue and $165,000 in 'in-house' invested capital (Slide 8, 9).
The company self-valued at $6.67 million despite having no external funding at the time of the deck's creation (Slide 9).
The $1 million ask is allocated primarily to Marketing (30%) and Product Development (25%) (Slide 10).

Company Overview and Contact Information

Slide 1: Title Slide

The deck opens with the Room2shop logo and the tagline 'Change the way of shopping.' It identifies the entity as Room2shop Online Private Limited, based in Surat, Gujarat (India). Contact details for Avdhesh Tripathi are provided, including a professional email, phone number, and the company URL. The visual branding is simple, featuring a logo of three stylized figures in a box, which reappears throughout the deck as a section header icon.

The Value Proposition

Slide 2: Elevator Pitch

The elevator pitch defines Room2shop as an ecosystem for e-commerce retailers to sell both new and used products. The slide highlights three core pillars: tools for merchandising across the digital journey (onsite, email, and advertising), an 'Auction Facility' for used products nationwide, and a 'Wholesale Room Facility' for manufacturers and wholesalers to sell in bulk. This slide establishes the company as a multi-faceted marketplace rather than a niche retailer.

Slide 3: Solution

The solution is broken into two parts. Solution 1 focuses on the 'Auction Facility,' which allows sellers to list second-hand goods and 'dead stocks' for a nationwide audience. The benefit is that buyers do not need to travel and can pay online. Solution 2 emphasizes the convenience of a single platform that handles Wholesale, Retail, and Auctions simultaneously, reducing the operational burden of managing multiple sites.

Business Mechanics and USP

Slide 4: Business Model

This slide uses a linear flow chart to explain the seller's journey: Quick Register, Create Listing, Receive Orders (via Email/SMS), Pack Item(s), We Pick (from warehouse anywhere in India), We Deliver to Customer (within 2 working days), and You get the payment. A blue banner at the bottom states the revenue model: a fixed commission ranging from 5-20% depending on the product category. This confirms a marketplace model where the platform handles logistics and fulfillment.

Slide 5: USP - E-MLM

The 'Unique Selling Proposition' is identified as 'e-MLM.' The plan involves giving buyers a lifetime benefit through a unique referral code. When a referred friend buys an item, the referrer gets a share of the margin. The slide explicitly states the benefit is to lower the cost of customer acquisition. A deadline is noted: 'E-MLM will be live on the site by EOM September 2016,' which helps date the deck to mid-2016.

Market Positioning and Team

Slide 6: Competition

A comparison table pits Room2shop against eBay, Amazon, Flipkart, and Snapdeal. Room2shop gives itself a 'Yes' across all five categories: Auction Facility, Packaging Material, Free Packaging Material, Free Shipping, and Free Returns, totaling a score of 5. The competitors score between 1 and 2. Below the table, the deck cites a 'Total e-Sales in India' of $1.6 Billion and a 'Share of Auctions' at 1%. It concludes that there is 'No Real Competition in Auction Sector' due to the market size.

Slide 7: Team

The leadership team consists of three individuals. Avdhesh Tripathi (MBA-Marketing) has 10 years of experience in the banking sector at ICICI and HDFC Bank. Prakash Kaptan (M.Com) has 12 years of experience in banking and finance, having previously run his own company. Priti Tiwari (Diploma in Computer Science) is described as having a technical background and being an entrepreneur since her school days. The slide emphasizes a 'blend of youth and experience' in Finance, Marketing, and Technology.

Traction and Fundraising Ask

Slide 8: Traction/Projections

The company was founded in January 2015 and began operations in July 2015. At the time of the deck, revenue was 'almost 30 Lakhs.' The slide sets future targets: 40 cities and 50,000 sellers by 2018 (with a 3% EBITDA margin) and 1.5 lakh sellers by 2020 (with 8-10% EBITDA margins). The use of 'EBIDTA' (sic) suggests a focus on operational profitability in the long term.

Slide 9: Equity Structure and History

This slide clarifies the financial standing as of April 30, 2016. It shows $165,000 has been 'Invested' via 'in-house funding.' It lists a $6.67 Million Valuation and a 15% Equity Cap. The text explicitly states they have not raised external funds to date. The $6.67M figure appears to be a post-money valuation target based on the requested investment.

Slide 10: Needs (The Ask)

The final slide attached specifies a requirement for $1 Million in 'Early stage funding.' A donut chart breaks down the 'Use of funds': Marketing (30%), Product Development (25%), Operational Expenses (15%), Founder Salaries (15%), and Sales (10%). The goals for this capital include increasing team size, achieving 'Pan India Visibility,' and improving technology.

What Works / What is Missing

What Works

Clear Revenue Model: The 5-20% commission structure is standard for marketplaces and easy for investors to model against GMV. · Logistics Integration: By mentioning 'We Pick' and 'We Deliver' on Slide 4, the company shows it understands the necessity of controlling the fulfillment experience in the Indian market. · Specific Niche: Focusing on 'dead stock' and auctions provides a differentiation point from the general retail focus of Flipkart or Amazon.

What is Missing

TAM/SAM/SOM: While the deck mentions a $1.6B market, it doesn't provide a bottom-up calculation of their specific addressable market within the auction or wholesale sectors. · Unit Economics: There is no mention of Customer Acquisition Cost (CAC) vs. Lifetime Value (LTV), which is critical for a model relying on an MLM referral system. · Technology Depth: For a platform claiming to be a 'New Age Startup,' there is very little detail on the proprietary nature of their tech stack or how the auction engine functions. · Risk Factors: The deck ignores the significant regulatory and brand-risk hurdles associated with Multi-Level Marketing (MLM) structures in India.

Founder Lessons

Avoid 'No Competition' Claims

Slide 6 claims there is 'No Real Competition' in the auction sector. This is a red flag for most investors. Even if a direct clone doesn't exist, Room2shop competes for the same consumer wallet share and seller inventory as the giants listed. Claiming no competition suggests a lack of market awareness or a failure to define the competitive landscape accurately.

Be Realistic with Valuations

On Slide 9, the founders present a $6.67 million valuation despite having only 30 Lakhs (approximately $45,000 USD at 2016 rates) in revenue and being entirely self-funded. A valuation that is roughly 140x current revenue is extremely difficult to justify without massive growth month-over-month, which is not documented in the traction slide.

Define the 'E-MLM' Carefully

Using the term 'MLM' can be polarizing. While the deck frames it as a way to lower CAC, investors often associate MLM with unsustainable growth or legal scrutiny. A founder today would be better served calling this a 'Tiered Referral Program' or 'Viral Loop,' focusing on the mechanics of the reward rather than the 'MLM' label.

Frequently asked questions

What is the primary problem Room2shop aims to solve?: According to Slide 3, the company focuses on helping sellers liquidate 'dead stocks' and second-hand goods. By providing an auction facility, they allow sellers to reach a nationwide audience of buyers who can purchase items online without traveling, which the deck claims 'eradicates' the problem of stagnant inventory.
How does the e-MLM system work?: Detailed on Slide 5, the e-MLM (Electronic Multi-Level Marketing) system provides each buyer with a unique referral code. When a referred friend makes a purchase at any point in the future, the original buyer receives a share of the purchase margin. The stated goal is to lower the Cost of Customer Acquisition (CAC).
What are the company's financial projections?: Slide 8 outlines a roadmap to reach 40 cities and 50,000 sellers by 2018, with EBIDTA margins starting to 'take off by 3%.' By 2020, they targeted 1.5 lakh sellers across India with EBIDTA margins reaching 8-10%.
How does Room2shop compare itself to competitors like Amazon and eBay?: On Slide 6, Room2shop uses a feature-comparison table. They claim to be the only player offering a full suite of services: Auction Facility, Packaging Material, Free Packaging Material, Free Shipping, and Free Returns. They specifically note that while eBay has an auction facility, it lacks the free shipping and returns offered by Room2shop.
What is the current funding status mentioned in the deck?: Slide 9 explicitly states that all funding to date has been 'in-house,' totaling $165,000. They had not raised any external funds at the time of the pitch, yet they applied a $6.67 million valuation to the company, representing a 15% equity cap for the proposed $1 million investment.