Daryaganj is a casual-dining restaurant in Delhi that offers an authentic North-Indian taste. The restaurant serves the original butter chicken, and dal makhani recipe brings to you by the grandson of their inventor.
More About Daryaganj
Daryaganj’s founder Kundan Lal Jaggi moved from Peshawar to Delhi’s Daryaganj area in 1947. He started a restaurant with his two friends there. Kundan Lal Jaggi invented the famous dishes butter chicken and daal makhani in this restaurant.
To revive Kundan’s legacy, his grandson Raghav Jaggi launched Daryaganj in 2019. They currently have 5 restaurants and 1 cloud kitchen in Delhi. And they are going to open 5 more restaurants and cloud kitchens. They plan to launch 100 restaurants in the next 5 years.
Raghav and Amit studied together at St. Columbas School in Delhi. He later attended St. Stephens College and then joined EXL Service in the USA. Raghav realized the taste of his grandfather’s authentic butter chicken was lost. He discussed this with Amit (who became a restauranteur), and both decided to pursue this venture.
Amit is the co-founder and CEO. Raghav is the founder and promoter. Gurpreet Singh is the corporate chef and chief operating officer. They produce their own ingredients, such as tomatoes, to maintain consistency.
💡 Interesting Fact: Daryaganj is one of the favorite go-to dine-in restaurants of shark Aman Gupta (co-founder of Boat).
Daryaganj Shark Tank Pitch and Updates
Gurpreet Singh, Raghav Jaggi, and Amit Bagga appeared on Shark Tank India Season 2 Episode 30. They demanded INR 90 lakhs from sharks for 0.5% equity at a valuation of INR 180 crore.
Their pitch started with serving their signature dishes, butter chicken and butter paneer, to the sharks. Their prices are 15% to 20% less than their competitors. The price of butter chicken in Daryaganj is INR 550, and Dal Makhani is INR 385.
Raghav holds 50% equity, while Amit holds a 20% stake in the business. Angel investors hold 19%, and Gurpreet holds 2.5% of the restaurant. 8.5% equity is reserved for the ESOP.
INR 13 crore was invested in the business by the time founders appeared on the Shark Tank India episode. Raghav himself invested his own INR 6-7 crores in the venture, while Vijay Bhalla, his office VVLS, Amit, and Raghav’s closed ones invested the rest.
Their sales in the month before the Shark Tank India episode were INR 3 crore. In FY 21-22, their annual revenue was INR 22 crore. However, in FY 22-23, their sales were INR 18 crore by the time they appeared in the Shark Tank India episode. They were projected to reach INR 37-38 crore by the end of the financial year.
Their EBITDA at the outlet level is 21%, and at the corporate level is 13%.
27% of their cost goes to foods, and 3% goes into packaging. Their workforce and real estate cost is 17%. Overheads and commissions cost them 15%, and their EBITDA is 21%. Their average payback period is 18-21 months.
It takes INR 1.5-1.75 crore investment to open a new restaurant. They had a term sheet with a home office, Digione, where they were looking to raise INR 8 crore at a valuation of INR 200 crore.
Aman wanted to do a deal with them, but he wanted to understand the high valuation they were asking.
Raghav gave him 3 reasons.
- They have a legacy that can’t be replicated.
- Every single restaurant is profitable on its own.
- They are extremely cash flow positive.
Vineeta offered them INR 90 lakh for 1% equity at a valuation of INR 90 crore though she couldn’t understand their term sheet.
Peyush felt the business is good and the food is delicious. However, he believed he couldn’t add much value as there weren’t many technology requirements in the restaurant. That’s why he decided to get out of the deal. Namita also decided to get out of the deal because she felt she had no expertise in the industry. And she couldn’t find any differentiator in the dishes she tasted.
Anupam had one big issue with the overall equity structure. Raghav owns 50% equity but still working for another company.
Anupam asked if he had such faith in this business, why he was holding on to his job. To which Raghav replied – Amit has the competence to run a restaurant business that Raghav lacks.
Anupam asked him to offload 20% at a valuation of INR 50 crore, and he would pay INR 10 crore right then and there. And then, Anupam offered him INR 90 lakh for 0.5% equity at a valuation of INR 180 crore.
Raghav said he appreciated the offer, but the valuation was significantly off for him. To which Anupam replied that the risk-return ratio is off-balance due to Raghav’s 50% equity, and it would only favor him, not investors. For that reason, he was out.
Aman believed the product was good. But they would need intervention from Raghav. Raghav said he would make the secondary sale of the shares at the right time.
Aman put forward a condition that Raghav would include him in the secondary offload. But he said he could only offer INR 50 lakhs for 1% equity at a valuation of INR 50 crore. And the rest, INR 40 lakhs, he would offer as debt at an interest rate of 12%.
Raghav countered Aman’s offer with INR 90 lakhs at 0.75% at a valuation of INR 120 crore, and they would accept all of Aman’s conditions related to structuring and term sheets.
They also offered to give 12% interest on Aman’s INR 90 lakhs until the next round of funding if he feels the valuation is a bit off. And they would add a 30% discount to him on that next round as well based on the valuation of that time.
Aman gave his final offer of INR 90 lakh for 1% equity at a valuation of INR 90 crore, subject to the conditions discussed.
Vineeta took back her offer because she felt the pitchers kept pitching to Aman and didn’t accept her offer.
|Founders||Raghav Jaggi and Amit Bagga|
|Business||Restaurant chain serving authentic North-Indian food|
|Profitability||Business is not profitable|
|Shark Tank Episode||Season 2 – Episode 30|
|Asked For||INR 90 lakhs for 0.5% equity|
|Deal||INR 90 lakhs for 1% equity|
|Sharks Invested||Aman Gupta|
|Valuation Given||INR 90 crore|
Daryaganj got a deal from Aman Gupta of INR 90 lakhs for 1% equity at a valuation of INR 90 crore.
Frequently Asked Questions About Daryaganj
After their appearance on Shark Tank India Season 2, people were trying to find more information about Daryaganj. Here are some of the frequently asked questions about them.
1. Who Are The Founders of Daryaganj?
Raghav Jaggi and Amit Bagga are the founders of Daryaganj.
2. Is Daryaganj profitable?
Daryaganj is not profitable.
3. Why other Sharks did not invest in Daryaganj?
Peyush and Namita believed that this business was not their expertise. Vineeta offered them a very high valuation, but they kept pitching to Aman, and Vineeta decided to get out of the deal. Anupam’s offer was rejected by the founders.
4. What happened to Daryaganj after Shark Tank?
Daryaganj got an offer of INR 90 lakhs from Aman at 1% equity. They became the first-ever casual dining restaurant (CDR) to feature on Shark Tank India. Daryaganj currently has 5 casual-dining outlets and 1 cloud kitchen (CK).
They are planning to open 7 new CDRs and 8 new CKs in 2023 in North India. Their long-term goals are to open 70 new restaurants in the next 3 years and 200+ restaurants in the next seven years. They are currently exploring various models to expand their business globally.