'Planet Saving Potential' But The Dragons' Aren't Convinced By This App | Dragons' Den

Summary

Alex Joy pitches his carbon offsetting app, My Tree, which allows users to plant trees and trade carbon credits. Seeking £70,000 for 7% equity, he aims to help users become carbon neutral. Despite the app's potential, the Dragons express skepticism about the business model and Alex's ability to provide concrete numbers or a clear revenue strategy. The lack of clear projections, along with the challenges of scaling, leads to all five Dragons declining to invest. Alex remains determined, confident that his app will launch and prove its worth in the future.

Takeaways

• 😀 Alex Joy's project aims to tackle climate change by allowing users to plant trees and purchase carbon credits via an app.
• 😀 The app includes a carbon footprint calculator that helps users understand how their lifestyle contributes to carbon emissions.
• 😀 Users can buy small trees for £25, which grow and generate more carbon offset each year, allowing them to track and reduce their carbon footprint.
• 😀 The app functions like a banking app, letting users track their tree's growth and carbon credits, but also allows excess carbon credits to be traded in a tree pool for profit.
• 😀 The company leases land for their first tree park, which can accommodate 30,000 trees, with annual costs of £6,000 for the lease.
• 😀 Alex aims to sell trees at £25 each, but the initial costs of planting and maintaining each tree range from £3.50 to £5, meaning the profit margin is tight.
• 😀 The maximum potential income from the current land (at full capacity) is around £600,000, but Alex is valuing the business at £2.5 million.
• 😀 Despite the unique idea of combining tree planting with carbon offset trading, investors were hesitant due to the speculative nature of the business model and lack of clear revenue projections.
• 😀 The company is still in its pre-revenue stage, with the app set to launch in the next month and a half, and no confirmed sales yet.
• 😀 Most of the investors in the Dragon's Den were not convinced by the business’s financial projections and declined to invest, though they appreciated the environmental goal.

Q & A

What is the main idea behind Alex's business?

Alex's business focuses on allowing users to offset their carbon footprint by planting trees. The app enables users to track their carbon footprint and purchase trees that generate carbon offset credits. Additionally, the app offers a trading platform for carbon credits, where users can either offset their footprint or contribute to a tree pool for businesses to buy credits from.

How does the app calculate a user's carbon footprint?

The app calculates a user's carbon footprint by asking them simple questions about their lifestyle, such as the vehicles they use and the distance they travel. It then provides a carbon footprint figure based on their answers.

What is the pricing model for the trees sold through the app?

The app sells small trees for £25 each. These trees are planted in a park, and as they grow, they generate more carbon offset credits each year.

What is the unique aspect of Alex's business compared to other carbon offset platforms?

The unique aspect of Alex's business is the integration of a carbon credit trading platform. Users can not only purchase trees for their own carbon offset but also contribute their carbon excess to a pool, which businesses can then purchase from for their own offsetting needs.

What challenges did Alex face in securing an investment from the Dragons?

Alex faced challenges in providing clear, detailed financial projections and demonstrating the scalability of his business. The Dragons expressed concerns about the business model, the lack of revenue so far, and the speculative nature of the projections, which ultimately led them to decline the investment.

What is the current status of the MyTree app?

The MyTree app is still in its final stages of development and has not officially started trading yet. Alex anticipates launching the app within a month and a half.

How does Alex plan to generate revenue from the app?

Alex plans to generate revenue through the sale of trees and carbon credits. He aims to sell trees to individuals and businesses, with the hope of selling additional trees to users who want to offset more carbon. The revenue will also come from the carbon credit trading platform, where companies can purchase credits.

What is the capacity of the tree park where Alex plants the trees?

The first tree park Alex has leased has a capacity for 30,000 trees. It is located near Reading, and he currently pays £6,000 annually to lease the land.

What are the costs involved in planting the trees?

It costs Alex between £3.50 and £4.00 per tree to plant them initially, including necessary care like staking and protection. Each tree also costs at least £5 to care for in its early stages.

How did the Dragons respond to Alex's pitch for investment?

The Dragons were initially intrigued by Alex's environmentally focused business but became skeptical due to the lack of clear financial projections, scalable growth, and a clear revenue model. Most of the Dragons opted out, with the exception of Deborah Meaden, who also declined after seeking further clarification on the business model.