How Shark Tank Fame Yes Madam Transformed Its Fates In A Slouching Indian Home Salon Market

It is not every day that we get to make ourselves acquainted with the stories of entrepreneurs who made it big despite an industry-wide meltdown due to dampened investor confidence.

One such case study is of Yes Madam, a salon-at-home startup, which was incorporated by brothers Aditya and Mayank Arya in December 2016 when Indians were still sceptical about the idea of booking at-home services — even though players like Amazon-backed Housejoy, Quikr’s AtHomeDiva and Urban Clap (now Urban Company), among others, already existed in the space.

Amid the chase to woo customers, these startups burnt cash. Consequently, only a few deep-pocketed and multi-service offering brands could get through while others had to shutter down.  

“In 2017-18, India saw most of its salon-at-home services shut down. We thought that we entered the market quite late. But later we figured out that we couldn’t have entered at a better time because a lot of people were closing down. This opened up more opportunity and reduced competition for us,” cofounder & CEO Mayank Arya said.

But then, as luck would have it, Urban Company raised an INR 125 Cr Series C round. This funding was pivotal for the company as well as the industry, as it validated investors’ trust in the viability of the business model.

While the funding raised by Urban Company was a blessing in disguise for the industry, Yes Madam shot to fame, not before February 2024, when it made an appearance on Shark Tank Season 3. With this, the brother duo received a funding of INR 1.5 Cr from Aman Gupta, Vineeta Singh, Peyush Bansal, and Ritesh Agarwal.

“While we were already performing well in terms of revenue even before Shark Tank, we did not have the brand power and customer trust necessary for long-term success. The day the episode aired, our website traffic skyrocketed to almost 10X, and our user base has increased by 3X,” Mayank said.

Today, Yes Madam is offering its range of salon services with the help of its team of 400 employees across Delhi NCR, Mumbai, Pune, Hyderabad and Bengaluru.

The founders claim to be currently garnering an annual revenue run rate (ARR) of INR 90 Cr. In FY24, the startup generated INR 45 Cr in revenue, and this year it is projected to reach INR 100 Cr in revenue, with an approximate gross merchandise volume (GMV) of INR 200 Cr.

 

From Ex-Mariners To Entrepreneurs

Before starting Yes Madam, Aditya and Mayank worked as officers in the merchant navy. In July 2016, their wives had allergic reactions from products used during a home salon service.

The two discovered that beauticians often used bulk, expired, or fake products, giving customers no transparency about what was being used. This incident happened during a break from their maritime jobs, propelling them to do something about it. 

After six months of research, they launched Yes Madam, a salon-at-home service, with three professionals. They introduced single-use products to ensure quality and safety, all while keeping their services affordable.

“Our prices are 40% lower than other platforms, but we don’t compromise on quality,” the CEO said.

In addition, the startup’s revenue comes from three sources: commissions on services, selling products to professionals, and providing training.

The Covid-19 Pivot

The founders told Inc42 that by the end of 2017, they were successful in achieving the right product-market fit. However, they were still unable to raise any funding, as most salon-at-home service startups were getting shut down. 

Between 2018 and 2019, they focussed on growth, which increased their cash burn. Adding to this, the Covid-19 pandemic made things even worse for Yes Madam.

Later in 2019, Akanksha Vishnoi joined the company as a cofounder.

Consequently, the startup had to endure a net loss of INR 7.52 Lakh in FY18. Its losses bloated to INR 29.26 Lakh in FY19. However, in FY22, the company turned a profit of INR 62 Lakh.

“The period between 2020-2022 was an extreme roller coaster ride for us. We could not raise funds and did not have any option but to invest from our own pockets,” Mayank said.

This was the time when the cofounder duo went back to the drawing board to make strategic shifts in their offerings, realising that profitability was key to running a sustainable business model. Therefore, the first change that the cofounders aimed at making was to start manufacturing their own products to control both quality and costs. 

Next, the Yes Madam cofounders acquired white-labelled products for their services. This move helped them significantly increase their profit margins. Additionally, they introduced a convenience fee for customers, allowing them to maintain affordability while boosting profits.  

They also expanded their offerings. Now, their customers could use their own products or choose just the service, a feature their competitors did not offer. Additionally, customers were allowed to use leftover products from previous sessions without any extra charge, only paying for the service.

These strategies helped the company grow by 246% in the last five years, starting from INR 13 Cr revenue in FY20 to INR 45 Cr in FY24.

The Shark Tank Milestone & The Road Ahead

In FY24, Yes Madam appeared on Shark Tank, a move that transformed their business. The CEO recalled how the show helped build the trust and visibility they had sought since the beginning.

“Before the show, Yes Madam wasn’t a household name despite our good numbers. We aimed to change that and become a household name, and thanks to Shark Tank, we’ve reached the masses. People now know about Yes Madam,” the cofounder said.

According to Mayank, the startup was acquiring 10K new users monthly before Shark Tank. After their appearance on the show, this number jumped to 30K new users monthly.

“We grew our user base by 427%, from 91K in FY20 to 480K in FY24,” the CEO added.

Going ahead, the cofounders aim to raise awareness about their quality products and services in tier 2 and tier 3 markets

Currently, about 65% of their services come from the Delhi NCR region, with another 25% from Bengaluru, Mumbai, Pune, and Hyderabad. While their services are primarily online, the founders plan to expand offline, focussing first on the Delhi NCR region.

To fuel growth, the startup is enhancing its user interface, including developing a chatbot for better customer engagement.  

“Product-wise, while facials, waxing, and pedicures are our primary movers, we recently introduced the ‘Bomb Pedicure’ and ‘Ice Cream Pedicure’. These new services are part of our strategy to keep our product lineup exciting and relevant,” the CEO said.

Looking ahead, the startup is committed to its long-term strategy, focussing on sustainability and longevity. By 2030, the cofounders aim for Yes Madam to be the go-to name for home salon services.

[Edited by Shishir Parasher]