With the speedy growth in technology and the need to keep up with the advancements, different companies introduce different ideas but not everyone gets the attention of the hype that they are expecting. This is because nowadays so many people come up with ideas that the consumers need something new that baffles them completely. They want something original and new which can grab their interest and attention so that they can see what the entrepreneur has to offer.
What is Smart Devices startup program?
Smart Devices has come up with a unique idea. There are so many electric appliances at home and each of them has their own remote control, which is quite a hassle. Sometimes you just cannot find the remote or it stops working altogether. So, if you want to get rid of this unnecessary trouble, Smart Devices has the best solution for you. The entrepreneur got the idea when his roommate got into an accident and became disabled. This is when he thought why not come up with something from which you can control all appliances from the comfort of your room/bed. This system can be used either online or even offline (which is rare because most applications or systems that offer remote control feature require being used while online)
How does Smart Device work?
This device is very simple and easy to use. An electrician can set it up in your home. It requires a smart switchboard; the electrician replaces the regular switchboard in the room with the smart switchboard. This smart switchboard can be connected with the existing WiFi connection you have in your home. When it is installed, the process gets even simpler. All you have to do is install a mobile application from the Play store, and this device can be controlled using WiFi or even without WiFi. The current model can control 5 appliances in a room.
How did Smart Devices raise 50 million rupees?
The smart switchboard that requires being installed in your home in order for the device to work is manufactured in Pakistan, both hardware and software. Currently, it is being manufactured in a limited quantity, but since it is a hardware device, the more quantities that are manufactured the lower will be the cost of each unit of the smart switchboard. At the moment, manufacturing each smart switchboard costs the company PKR3500 and it is sold in the market for PKR 7000.
So far, the company has been able to sell around 300 units of this device and has generated 2 million.
Manufacturing of the devices
The entrepreneur plans to take the production of this device to a larger scale and prefers the devices to be produced in China, for which a greater investment is required since this requires to be produced in bulk quantities in order to reduce the cost of each unit produced. The entrepreneur plans to invest more in the marketing as well since this is a unique idea and could be very helpful for many people.
Valuation and return on investment
The company was able to sell the units without a lot of marketing. Since the demand for this device seems to be very high, it is possible that they can sell up to 10,000 devices in 3 years and help generate approximately 75 million rupees. This is what they have based the valuation of their company on; that is, 100 million rupees since the entrepreneur is willing to offer 40% return on the 40 million in investment that they require. The reason this device is much different than the other devices on the market similar to this is because not only is this integrated with their own system, but it is also integrated with Google home, Amazon echo and it also has an app on the Apple Watch. The competitors’ devices are only linked to one mobile phone through an app, whereas Smart Devices’ device is linked to a wide range of systems that makes it easier to use and it is not just limited to Pakistan. It can be used anywhere you are.
The entrepreneur has 3 options to choose from; 20 million rupees investment at 50% stake, 25 million rupees at 50% stake or an acquisition at 40 million rupees (that sells the company and the to the investor so that all the costs and profits will be their responsibility). This is a very tough decision for them since it takes a lot of effort to come up with a unique idea and then to decide to either gives half the company control to a new investor or just give up the whole company. The entrepreneur chose to sell his idea and company for 50 million rupees, which is more than what he initially valued and keeping the future profits and costs in mind, this was the best option for him as this will allow him to merge with another investor and be able to use their resources in order to expand his idea even further and take this to a larger scale.
This startup had a unique idea, but what was even better about this company was how well everything had been calculated and figured out by the entrepreneur and how much thought he had put into his company and its valuation. Moreover, the demand for this device is already increasing in the market, as he was able to sell a lot of these devices without investing much time and money. This is indeed quite a useful device and if marketed correctly and produced in bulk quantities, it is highly possible that they can attract future investments in this idea in the future. The whole world is moving towards technology very quickly each day and every day new ideas are exchanged and developed. This could definitely be one of those ideas that can truly change the technological market, in Pakistan and abroad. This allows more and more people to come forward with their ideas and have a chance at attracting investments.