Online shopping hub wins reality TV show grand prize, gets RM1mil investment from MyEG
Extra funds to go into marketing, revamping website, and expanding the team
IT MUST be in the DNA (deoxyribonucleic acid in this case), or at least something in the water – FashionValet.net won the grand prize in MyEG’s Make The Pitch reality TV show, which recently ended its second season. [Stay with us here.]
The prize was a RM1 million (US$ 326,580) investment by MyEG Services Bhd, for a 30% stake in the company.
FashionValet was founded in November, 2010 by Fadzarudin Shah Anuar and his then fiancée Vivy Yusof (pic), now chief executive officer and chief operating officer respectively. [They’ve since married, going by various posts in Vivy’s Proudduck blog, so more congratulations are in order.]
Incidentally, Fadzarudin is also the brother of Fadzli Shah Anuar, whose company Voucheres won the grand prize in Make The Pitch’s inaugural season the previous year – at that time, RM500,000 for a 30% stake. [Yes, we have arrived.] Note: This article was amended to correct the figure above.
Make The Pitch was aired every Thursday on 8TV at 10.30pm from July 5 to Oct 4, and can now be viewed on tonton.com.my.
In a statement, the couple say they founded FV to “elevate the local fashion scene,” by bridging FV’s online customers to the local products and brands listed on the website. The site, less than two years later, now features about 150 brands.
Realizing they needed a strategic partner to grow, they decided to try out for Make The Pitch, where contestants pitch their business ideas to a panel of investors. According to FV, 40 applicants took part in the second season. After several rounds, it progressed to the semi-finals and received RM5,000 of seed funding.
This funding was used to evaluate FV in terms of spending and sales growth, and the company said it proved itself by using the money to grow sales grew by 15% within the first six weeks.
In the finals, Fadzarudin (pic) saw off competition from five others to impress the judges and walk away with the grand prize. Here, he answers from questions from Digital News Asia (the ‘other’ DNA):
DNA: How do you feel about winning?
Fadzarudin: I was extremely happy when we agreed on the offer. I knew I was giving away a large portion of the company, but the value MyEG and its management team would bring to the table is so much more.
It’s been tough going through many rounds trying to raise funds and now that we have done it, we can all focus on building the business more aggressively.
DNA: Tell us about some of the learnings you’ve gathered from taking part in this competition, and from getting the judges’ feedback.
Fadzarudin: I have learned to look at the business more strictly. My partner and I practised for hours on the many possible questions we could be asked by the judges. Doing this made us realize the weaknesses and possible pitfalls our business could have. This helped us address them and find a solution even before we went in to pitch.
Networking with other entrepreneurs also opened my eyes to many different models and strategies possible.
DNA: What will the extra investment go towards?
Fadzarudin: A large portion of the funds will go into marketing. We have quite a good team running operations, but our reach has not been growing as fast as our product offerings.
Secondly, we will be re-launching the website with a new look and features to position ourselves with other internationally-known shopping websites.
The rest of the funds will go into expanding the team and the office to accommodate the expected increase in volume.
DNA: Giving up 30% of your company probably wasn't an easy decision. Beyond the RM1 million in funds that you can use, what other value do you see MyEG bringing to the equation?
Fadzarudin: I truly believe the value MyEG will bring is much more than RM1 million to the table. Its management team has tremendous experience in Internet businesses and that experience will help us in all aspects of the company, including online marketing, operations and buying.
Having someone like TS (MyEG founder T.S. Wong) join FashionValet is invaluable. He is definitely one of the best venture capitalists in the region and we already feel his impact even at this early stage.
MyEG also has a number of companies it has invested in, many of them related to the Internet and some related to fashion. So we look forward to partnering with these companies and coming up with some innovative ideas to benefit everyone.
DNA: How valuable were the tips from your brother (last year's winner, Voucheres founder Fadzli Shah Anuar)?
Fadzarudin: He gave me a lot of great advice going into the competition. He advised me on what investors are looking for and to make sure to include that in our pitch to them.
He knows the business well and was confident we could make it all the way to the end, so that gave me a lot of confidence too.
DNA: How much competitive rivalry is there between the two of you?
Fadzarudin: Actually, we throw a lot of ideas at each other on how to build each other's business. FashionValet and Voucheres are in two very different businesses in the sense that our customer bases do not really overlap. We target people shopping online, while Voucheres is for people in malls looking for a physical deal.
Being brothers, both of us are pretty similar in that we are both very ambitious people and we want to see each other succeed.
DNA: Can your business model scale? What revenue target do you need to hit before you expand to the next market?
Fadzarudin: We are definitely looking to scale; getting more designers and products to offer customers, and marketing to a larger market in the South-East Asian region.
The business model is dependent on volume. The higher our volumes, the more we will be able to optimize operations. I can't reveal exactly what are our targets are, but I can say that you will be seeing FashionValet aggressively competing in the same space as other online fashion stores.
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