The two founders of Presize, Tomislav Tomov and Leon Szeli, pitched for an investment from TV financiers in yesterday's episode of 'The Lion's Den'.
The software of the Munich startups Measures the user's clothing measurements within one minute based on a simple body rotation in front of the smartphone camera. All recorded measurements – from collar size to sleeve length – are saved together in the form of a short code that the user can reuse at any time.
The goal of the development is to enable e-commerce stores to sell their customers perfectly fitting clothing, thus reducing the number of returns. These represent a huge cost for the industry. According to the founders, approximately every second item of clothing is returned, and the wrong size is cited as the reason for every second return. The potential savings are therefore enormous. On the TV show, the founders offered 10 percent of their company shares for €650,000.
Several TV investors are pulling out
However, several investors withdrew for various reasons: Dagmar Wöhrl believed that data protection concerns would deter customers – even though no data is stored. Ralf Dümmel and Nils Glagau were impressed, but consider themselves the wrong investors. Georg Kofler praised the founders:
“If this works, you’ll be a key to the entire online fashion industry.”
However, it is not his business because it is a B2B model:
"I'm a B2C guy, so to speak. You know, you're so convincing that I'm tempted to break away from my B2C business."
However, the valuation was too high for him and Georg Kofler also dropped out.
Tough negotiations with Carsten Maschmeyer
The remaining investor, Carsten Maschmeyer, submitted an offer to Presize, but at a significantly lower valuation: €650,000 for 25 percent of the company's shares. The two founders returned from a consulting break without a counteroffer and declined. After Maschmeyer urged them to submit a counteroffer, they came back with a proposal of 14 percent, putting the investor under pressure:
“If that doesn’t sound practical to you, then unfortunately we won’t do business.”
Maschmeyer nevertheless made another counteroffer of 15.5 percent. The Presize founders and Maschmeyer ultimately agreed on €650,000 for 15 percent. This is the second-largest single deal since the show's inception.
After the broadcast, Leon Szeli said about Carsten Maschmeyer’s investment:
"He's coming on board at exactly the right time. We now want to build a scalable sales structure for our unique technology – and there's hardly anyone in Germany who can contribute more to this topic than Mr. Maschmeyer."
The deal was successfully concluded after the broadcast and has already been notarized. Carsten Maschmeyer says:
"Presize is the startup I've always wanted to see on 'The Lion's Den'! A highly competent founding team, a real solution to a previously unsolved problem – and all of it based on artificial intelligence technology. It's the second-highest single investment on the show, and I'm very happy to be involved as an investor now. Because Presize will have a huge, positive impact on exchange behavior in the online fashion world in Germany."
Presize: Financing round extended to 2 million euros
Shortly after Maschmeyer joined the TV show, the Munich-based company secured additional fresh capital. Based on a valuation approximately 50 percent higher – roughly the €6.5 million valuation originally announced on the TV show – Presize expanded the financing round to a total of just under €2 million.
Since its appearance in the Lions’ Den, the startup has been able to attract S. Oliver and Keller Sports as a customer and Hugo Boss board member Heiko Schäfer as an advisory board member.
