robin is a company in Dallas, TX, founded with the goal of making lawn care machinery more environmentally friendly by bringing to market a robot that will cut lawns automatically.
The robot is bounded by small buried wires so that it knows its parameters. It features a docking station that it can navigate to and dock itself into. To use up to "25 percent less fertilizer" the robot does not collect any clippings but allows them to drop into the lawn to decompose and become mulch.
The robot, however, was not created by robin but was created by a company in the European Union and is re-sold by robin as part of a service contract with the end user. In the EU, the robot is sold as is and would sell in the United States for a price ranging between $1,800-1,9000. However, because the robot is part of an overall service contract, robin charges $17 a week for it instead.
The robot is leased from the roboto manufactuter for no money down and a free first month. It then costs robin $45 a month for each month thereafter.
The company can also stack additional services for additional charges include $17 a week for lawn edging, $25 a week for edging and mowing, and $37 a week for weeding, edge trimming, mowing and more. However, the only automated part of the service is the mowing, the rest requires service crews.
robin's goal is the convert all customers to using the robot.
Currently, robin serviced 10,000 jobs a month, charging $400,000 a month for traditional services and grossing almost $5,000,000 a year in revenue in and around the Houston, Austin, and Dallas metropolitan areas.
However, the entrepreneurs claim that they lost $1,000,000 the previous year and have a monthly burn rate of aproximately $100,000. It is claimed that robin can break even "any time" they want to "stop investing and acquiring" new business.
The company currently have ten full time employees and crews on contract to fulfill the jobs.
robin previously raised $3,000,000 of other investment.
Unclear as to exactly what they were investing in, all of the sharks declined and robin left the tank without a deal.
This deal aired on Episode 9.10.
This is a prime example of a confusing deal on Shark Tank. What kind of company is being pitched? At first it sounded like a technology company. Then it sounded like a technology services company. Then it sounded, essentially, like a lawn care company with a $10,000,000 valuation. The Stats Shark doesn't blame the sharks for not investing. Even the Stats Shark had a hard time figuring out what exactly the deal was.
Lawn care is a great business! The Stats Shark for several years in high school ran a small lawn mowing business and it's good reliable money. Never made anything close to $400,000 a month but then it was just ten lawns and there was never a $100,000 a month burn. Gas was a $10 month expense with a little extra kicked back to the Stats Shark's father for use of the mower (no dummy, he).
This sounds like a lawn care business on a much larger scale which should also include larger margins but, instead, it appears as if those margins are eaten up by a technology push that brings no additional benefit to the customer and just enough of a twist on the traditional business to get into the tank.
Additionally, the numbers in this deal are too fuzzy for comfort. And anyone with a calculator could figure that out. Assuming a 50% wholesale price for the robotic mower, the manufacturer could expect to be paid outright $850-900 for their product. Instead, they appear to lease it to the company for $45 a month, an 19-20 month period to earn the same money. Why they would do that, exactly is unclear.
Also, while the lease or license cost is $45 a month per unit, robin's base cost for mowing is onlu $17 a week or $68 a month. This would net only $23 a month per customer if that customer chose to engage no other services. From a sales point of view, this is terrible! Part of the value of having a crew onsite is to upsell a customer for edging, weeding, and more. A robot cannot do that.
Lastly, while those numbers came off as fuzzy, nothing was more fuzzy than their monthly versus yearly gross revenue. $400,000 a month in revenue is $4,800,000 not $5,000,000. One would normally brush this aside as simple rounding but the rest of the numbers were strange enough that specificity here might have added some credibility to the pitch. Instead, because the business model was unclear, the competitive angle was unclear, and the revenue numbers were rounded, the whole things just sounded... off...
- As the analysis section above makes clear, something seems fishy about the numbers surrounding the costs associated with the robots.
- $400,000 a month over a twelve month period is actually $4,800,000 a year but yet another problem analyzed by the Stats Shark.