Submarines Ignite Full Blown Financial War | Dragons' Den

Summary

Robert Leeds and Guy Seymour pitch their company, Subió, seeking £1.45 million for 45% equity to develop a commercially viable submarine, the Aquarius 50. Despite having a prototype and backing from experienced designers, the duo struggles to gain investor confidence due to their financial plans being questioned. They highlight potential markets, including private individuals, tourism, and military applications. However, after a tense debate over financial viability, all investors, including Theo Paphitis and James Caan, ultimately back out, leaving the entrepreneurs without the investment they sought.

Takeaways

• 😀 Robert Leeds and Guy Seymour are seeking £1.45 million for a 45% equity stake in their company, Subió, to fund the development of a new submarine called the Aquarius 50.
• 😀 The Aquarius 50 submarine is designed to take occupants to a maximum depth of 300 meters, opening up previously inaccessible parts of the ocean for exploration and various industries.
• 😀 The potential markets for their submarine include private yacht owners, the tourism industry, seabed and reef surveys, fish farms, and military applications like homeland security and underwater search operations.
• 😀 They have already spent £700,000 to develop a prototype submarine and are working with designer Professor Peter Stevens, who previously designed the McLaren F1 racing car.
• 😀 The company has faced challenges in securing firm orders, with the struggle of showing potential customers what they are buying before they make a commitment.
• 😀 They have a letter of intent from a global biofuel company, stating an anticipated need for 10 submarines over the next five years.
• 😀 The pricing of their product is set at £595,000 per unit, which they believe is competitive considering the technical capabilities of their submarine.
• 😀 The business plan outlines expected sales of 4 submarines in the third year, with a projected profit of £900,000 per year thereafter, with a total profit of £350,000 over four years.
• 😀 The Dragons express doubts about the financial viability of the business, questioning the long-term profit projections and the team’s business acumen.
• 😀 Despite initial excitement about the product, all the Dragons ultimately decide not to invest, citing concerns over the financial strategy and the high risk involved in the venture.

Q & A

What is the business being pitched in the script?

The business being pitched is Subió, which is developing a commercial submarine designed to take people down to depths of up to 300 meters. It is aimed at private individuals, the tourist industry, fish farms, and military applications.

How much investment are Robert Leeds and Guy Seymour asking for?

They are asking for 1.45 million pounds in exchange for 45% equity in their company, Subió.

What is the current prototype's status?

The prototype of the Subió craft has already been built, costing around 700,000 pounds. The company is now seeking investment to develop a commercially viable model.

What industries does Subió aim to target with their submarine product?

Subió targets several industries, including private individuals with yachts, the tourist industry, seabed surveys, reef and fish farm surveys, and potential military applications for homeland security.

What are the key features of the Subió craft?

The Subió craft is designed to take occupants to depths of up to 300 meters, opening up new areas of the ocean that are inaccessible to traditional divers.

How much do the entrepreneurs plan to sell each submarine for?

The planned sale price for each submarine is around 595,000 pounds.

Have Robert and Guy received any firm orders for the Subió craft?

Yes, they have a letter of intent from a global firm involved in biofuels and fish farming, which anticipates a need for 10 Subió crafts over the next five years.

What was the main concern raised by James Caan during the pitch?

James Caan raised concerns about the lack of firm orders and the challenge of selling the product without having a proven market demand or visible sales.

What financial issues were raised during the pitch?

The main financial issue discussed was the profitability of the business. The company projected profits in year 3 and 4, but the initial two years would involve significant losses. Some of the Dragons questioned the accuracy of the financial projections.

What was the final verdict from the Dragons?

Despite initial interest, all the Dragons ultimately decided not to invest. They expressed concerns over the business's financials, the entrepreneurs' lack of business acumen, and the high financial risks involved.