Convenient Nail Salon Booking with Snailz

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Snailz has been selected as a “Deal to Watch” by KingsCrowd. This distinction is reserved for deals selected into the top 10%-20% of our due diligence funnel. If you have questions regarding our deal diligence and selection methodology, please reach out to

The Snailz founders are part of traditionally underrepresented groups in startup investing. 



Several problems exist in the nail salon market. Prices can change periodically and without warning. You also have varied waiting times, inconsistent service, difficulty advertising, and unbalanced reviews. Additional issues exist relating to payment processing, appointment keeping, and establishing robust loyalty programs that actually achieve a business’ goal. These issues are all baked into the nature of the space. With tens of thousands of small, independent brands, industry opacity and inefficiencies are bound to exist.


Recognizing the issues plaguing the nail salon business, Darren and Lori Sardoff launched Snailz. Via its iOS and Android apps, as well as through its website, the company allows consumers to book appointments at partnering nail salons. Though this sounds like a simple business, there are multiple working parts that can result in revenue generation for the firm. In addition to charging a 13.5% fee for all appointments booked through the app, the company hopes to add other revenue-generating features.


Examples provided by management include advertising, e-commerce, payment processing, job/training services, and analytics. The payment processing the firm wants to conduct alongside its new partner, Universal Processing. This processor services merchants all across the US, including thousands of nail salons. By partnering up with Universal Processing, management hopes to expand rapidly. The firm hopes to grow from the 350 accounts it has on its platform today (including 20% of the nail salons in Manhattan), to 650 by the end of this year. All of its salons as of the end of 2019 were located in New York and New Jersey.


Since launching, Snailz has seen some nice growth. The platform has successfully booked over $1.3 million worth of appointments. The average ticket per booking over this timeframe has grown as consumers become more trusting of the service. In the first quarter of its 2018 fiscal year, the average ticket per booking was $20.89. In January and February of this year, the figure averaged $47.58. As the company integrates payment processing on the app, this will likely grow even more. Over this same window of time, the company’s userbase has expanded from about 2,500 to 50,877.


By 2024, management hopes to have 8,000 salons or more. If they can achieve this target, their annual revenue should hit roughly $70 million. But while projections are nice, investors should focus on what is happening today. In 2018, the firm’s revenue was a modest $28,241. This grew considerably in 2019 but still ended that year at just $69,932. The business’s bottom line, meanwhile, has suffered a great deal. In 2018, the firm lost $705,063. This loss expanded to $889,968. Operating cash outflows were also significant during these two years, rising from $604,513 in 2018 to $680,653 last year. Because of these massive cash outflows, the company has had to take on significant debt. By the end of last year, notes payable totalled nearly $2.08 million.

A Fragmented, But Sizable Market

The nail salon market is incredibly fragmented. In the US alone, the industry consists of more than 55,000 locations. This number has fluctuated over the years, but within a narrow range dating back more than a decade. Revenue estimates vary. One source pegs industry sales (for 2019) at $5.9 billion. Another source estimates that the nail and hair salon space was worth about $58.78 billion in size last year. The nail salon category of this represented about 15.9% (or $9.35 billion) of the industry’s sales. Its emphasis today is on the nail salon category, but the firm could expand beyond this niche and into the broader beauty category. On the e-commerce side, things could get rather attractive, with annual nail polish revenue alone totalling $15.55 billion by 2024.


Not only is the space sizable, but the market participants also appear open to change. 24% of nail stylists surveyed cited building and retaining clientele as a primary challenge. 23% said their biggest challenge was competition, particularly too many discount service providers. 19% said that maintaining their business’s social media is a major challenge, and 17% said that advertising/marketing was a major issue. All of these data points are encouraging for the business. That’s because the platform being developed has the potential to address each of these concerns.


There are other data that support the firm’s potential moving forward. The same survey found that 33% of nail stylists still use a traditional calendar or other paper booking system to handle appointments. 22% stated that they do have an online booking app or program. 13% claimed that they have a smartphone booking app and 12% said they have a computer software program to help with the issue. A sizable 17% of service providers still use texting to connect with clients. This shows that there’s already adoption of various solutions on this front. But with at least 50% of stylists still using outdated booking options, there’s plenty of upside potential for a new, disruptive player.


Terms of the Deal

Snailz has dedicated a great deal of capital toward developing their initial product and getting it monetized. Having said that, the firm is looking for additional capital in order to take the product to the next level. Ideally, they hope to raise up to $1.07 million, but they could close their round of funding with as little as $25,000. In exchange for investment, which management set as a minimum of $100 from each participant, investors will receive a SAFE. This security will convert into equity subject to a 20% discount to the next round’s valuation. So far, Snailz has received commitments totalling $25,600, which is impressive when considering the rather high valuation cap placed on the SAFE. This number, $10 million, is awfully high when you consider the firm’s significant net losses and cash outflows. Add in the amount of its debt, and could be a hard sell.

An Eye On Management

There are multiple individuals working together to make Snailz a reality. The two key figures of the enterprise, though, are Darren Sardoff and Lori Sardoff. Both of them are the business’s co-founders. Darren, the company’s CEO, has served in the past as a President and Portfolio Manager at Act II Capital Holdings. Before that, he was employed as a Vice President at Lehman Brothers. He previously held the same title while working at ING Barings. Lori, meanwhile, has worked as a Social Worker at BATA Inc. She was also in charge of Corporate Bond Sales at First Institutional Securities. Prior to that, she served as a co-founder and co-President at Weddingfone.

The Rating: Deal To Watch

Our team has rated Snailz a Deal to Watch. This high ranking for the business is based on the firm’s user traction. It is also based on the potential we see in this fragmented space and the clear advantages users (consumers and nail salons alike) would benefit from in using the firm’s application. Though not domain-specific, management’s experience is appealing. Also, there’s a real chance that the firm can become a one-size-fits-all for nail salons. That could create a large and consistent revenue stream for shareholders in the years to come.


This is not to say that everything is perfect though. There are some real problems that investors should take into consideration before buying in. The most significant of these is the business’s debt and crushing cash outflows and net losses. Add in a high valuation cap assigned to its SAFE and there are real risks moving forward. This means that even with the attractive prospects the business offers, investors should approach this opportunity with caution.

About: Daniel Jones

Daniel Jones is a graduate of Case Western University with a degree in Economics. He has spent several years as an equity analyst writer for The Motley Fool where he focuses primarily on the Consumer Goods sector but also likes to dive in on interesting topics involving energy, industrials, and macroeconomics, in addition to contributing equity research to publications such as Seeking Alpha.

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