Snailz Deal Memo (Closing Date: 2021–03–01)
Husband/wife duo are teaming up to build a marketplace and business management platform for nail salonz. B2B SaaS marketplace, but can they scale fast enough to be venture backable?
3 min readMar 3, 2021
Want to see the complete rich format deal memo? Read the original post at: https://muhanzhang.com/Snailz
Deal Abstract
Husband/wife duo are teaming up to build a marketplace and business management platform for nail salonz. B2B SaaS marketplace, but can they scale fast enough to be venture backable?
Financials
- Fundraising Target? $1070000
- Fundraised So Far? $193931
- Pre-Money Valuation? $10000000
- Previous Year’s Annual Revenue: $69932
- Previous Year’s Annual Net Income (+ Profitable, — Burning Cash): $-889968
Six Calacanis Criteria
- A startup that is based in SV? False, New York, NY
- Has at least 2 founders? False, One founder
- Has product in the market? True, Revenue generating
- 6 months of continuous user growth or 6 months of revenue? True, Revenue more than doubled from $28k to $69k
- Notable investors? False, No one I recognize
- Post-funding, will have 18 months of runway? True, If they raised $1mm, but it doesn’t look likely at present
Seven Thiel Tests
- Engineering? 2, Better than nothing, but is it 10x better than Booksy or HellaBella?
- Timing? 2, Good time to make marketplaces
- Monopoly? 4, Credit where credit is due, has gone deep on Manhattan and has 20% of market
- People? 3, Husband and wife together, harder to get incentives more aligned :)
- Distribution? 2, No clear advantage to onboarding new customers, though the quantity is impressive
- Durability? 3, If they can build it, I could see this being the Grubhub of nails for the East Coast (Grubhub vs Eat24 vs the reset of the food wars)
- Secret? 2, Millennial beauty customers are expecting a digital first booking and reservation system, and Snailz is going to build that marketplace
What Has to Go Right
- Control spend and scale more efficiently, I believe it’s at 176k in revenue for 2020 but need to see costs; 2. Grow more rapidly, the business has been around since June 2017, has 350 salons for 1.3m in bookings (20% of Manhattan network,) 3. Take learnings from Manhattan expertise and bundle it up in a faster go to market strategy
What Could Go Wrong
- Fragmented marketplace, Booksy is already tackling this market and has Series C funding; 2. Adoption speed not fast, uncertain how ready nail salons are in adopting SaaS (though to be fair, as owners turn younger, I’m sure this will change,) 3. Pricing structure, 13% is not cheap for a small business and services industry at this level already have a lot of costs
Muhan’s Bonus Notes
Very cool to see this; I know nails and salons are an industry but have not had personal experience with them.
So, did I invest?
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