Daryaganj restaurant, a famous Delhi restaurant is being revived and expanded by the grandson of Kundan Lal Jaggi (the man who invented Butter Chicken and Dal Makhani)
This grandson whose name is Ragahv Jaggi currently lives in New York. After the death of Kundan Lal Jaggi in 2018, he launched Daryaganj restaurant to give tribute to his grandfather’s legacy. He started this in partnership with his childhood friend Amit Bagga, who is also the CEO of the company.
Raghav himself works in New York full time in some other company, has invested ₹7 crores in Drayaganj restaurant, and has a 50% stake in the company. The fact that he is sitting in New York and still owns half the company did not go down well with the sharks.
With his not-so-ethical way of doing bussiness, Raghav Jaggi lost the trust of the sharks, along with pissing off Vineeta by not acknowledging her offer with a decent reply.
Daryaganj Restaurant Founders
In 1947, during the partition of India and Pakistan, Kundan Lal Jaggi relocated from Peshawar (Pakistan) to Daryaganj in Delhi.
In partnership with his two friends, he started Daryaganj restaurant in 1947 in Delhi. One night a lot of guests appeared at their restaurant. There was not much food in the kitchen. He took some leftover chicken and made the gravy of tomato and butter and this is how butter chicken was invented. That same year even Dal Makhani was invented in their restaurant.
He retired in 1992 and passed away in 2018. Post that his grandson Raghav Jaggi along with his childhood friend Amit Bagga revived his legacy in 2019 and opened 5 more Daryaganj restaurants and 1 cloud kitchen. The plan to open 5 more restaurants and 5 more cloud kitchens is also in progress.
In this revived legacy, Raghav has 50%, Amit Bagga has 20% and the chef Gurpreet has 2% and the rest is with the investors who are family friends.
They have built it as a casual dining restaurant and aim to serve authentic butter chicken to a maximum number of people, which is why they have also kept their recipes very simple.
They produce their own tomatoes to maintain their quality and consistency.
Where To Find Them
Daryaganj Restraurant Shark Tank India
The original ask of the founders was ₹90 lakhs for 0.5% of the equity at ₹180 crores valuation.
Let us check out how they lost the trust of the sharks.
Aman questioned why they have such a high valuation. The founders of the Daryaganj restaurant replied that they have a strong legacy that cannot be replaced, All their restaurants are profitable, and they are cash flow positive. These reasons however did not convince the sharks.
When the founders revealed that they are raising money from friends and relatives, Aman wanted to know why they are not approaching institutional investors. To this Vineeta explained that an institutional investor would want to invest in the CEO who is putting in the sweat has 50%, but in their case, it is only 20%.
Anupam was displeased with the fact that in their entire pitch, they just talked about food, but their chef Gurpreet Singh has only 2% equity. Vineeta also commented that this is “SIYAPPA” (unjustified)
Vineeta still gave the offer of ₹90 lakhs for 1% at ₹90 crores valuation.
Peyush and Nameeta did not find this business interesting and exciting.
Anupman point blank told Raghav that if he really wants to revive the legacy then he should leave his work in New York and focus on Daryaganj full-time. He told that he is willing to offload the equity if need be.
Anupam then offered ₹50 crore valuation, for 20%equity for ₹10 crores. Raghav refused to accept it. Anupam then pointed out that their Risk To Return (a measure of return in terms of risk for a specific time period) ratio is completely wrong.
Aman too was not happy with the equity structure, but he believes that if the product is good then everything falls in place. For the love of food he gave them the offer of ₹50 lakhs for 1%equity at ₹50 crores valuation, the rest in ₹40 lakhs in debt at 12% interest.
Under the condition of Secondary Sales Of Shares (It is the sale of shares of a private company by an existing investor to a 3rd party that does not occur in connection to the acquisition of the company.
The founders considered both offers and gave a counteroffer specifically directed at Aman of ₹120 crores valuation, under all the terms and conditions that Aman specified, along with 12% interest on their debt till they raise another round. They also will additionally give a 10% discount to Aman in the next round, and Vineeta can join in too.
Vineeta was displeased that even though she gave a better valuation than Aman, the founders gave a counteroffer specifically to Aman. She backed out.
Aman gave the final offer of ₹90 lakhs at ₹90 crores subject to all the conditions that they had mentioned in their counteroffer.
The founders asked him if he could give them a few hours every week to look after the workings of the business. Aman point blank told them that by just giving a few percent of equity they don’t own him, he will, however, be there if they need any guidance. The founder of Daryaganj agreed and the deal was sealed.
It is important that the people who put in all the sweat behind the growth and success of the bussiness should be given equity that justifies their time and efforts.
We firmly believe that It should be monetarily more in favor of the people who are actually toiling behind it, over the people who have just invested without putting in much work. Do let us know your thoughts about it.
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