Trunkster Smart Luggage
DEAL
EPISODE SUMMARY
🕓 Air Date: December 4, 2015
Asking For:
$1,400,000 for 5%
Investor:
Mark Cuban, Lori Greiner (50/50)
Deal:
$1,400,000 for 5% with double equity if not paid in 24 months + $1/unit royalty in perpetuity
PRODUCT SUMMARY
Trunkster is the world's first roll-top suitcase with a minimalist design, smart features, and global location tracking.
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Background Story
Gaston Blanchet and Jesse Potash, best friends from Argentina and New York, respectively, co-founded Trunkster with a vision to revolutionize the luggage industry. Gaston, inspired by a desire for a luggage brand with a compelling story and grassroots origins, conceptualized the idea while shopping for luggage. Frustrated with the lack of innovation in traditional suitcase designs, he envisioned a sleek, minimalist, and functional product.
In their pitch, Gaston and Jesse emphasize their millennial perspective and the need for a luggage brand that stands out from the corporate landscape. Trunkster started as a crowdfunding campaign on Kickstarter, becoming the most crowdfunded travel campaign in history, raising $1.4 million in just one hour. With a valuation of $28 million, they highlight their commitment to disrupting the industry with a premium product offered at a significant discount directly to consumers.
The Product
Trunkster’s key features include a roll-top door for instant access, a self-contained handle scale to avoid excess baggage fees, built-in USB ports powered by a removable battery, and global location tracking with proximity sensors to prevent lost luggage. The suitcase is constructed with high-quality materials using a patent-pending assembly process for lightweight and rigid durability.
The founders present the prototype on the show, showcasing its unique design and functionality. Trunkster retails for $395, with manufacturing costs approximately 20% of the retail price. The founders emphasize that they have pre-sold $2 million worth of the product, and production is set to begin with 5,000 units ready for shipping.
How It Went
The company’s position before Shark Tank
Trunkster has achieved significant success through crowdfunding, with $1.4 million raised on Kickstarter and $2 million in pre-sales. The founders claim to have a $28 million valuation and anticipate $3 million in sales for the current year. They express confidence in their ability to turn Trunkster into a billion-dollar company, following the disruptive path of the mattress industry.
The company operates primarily online, selling directly to consumers, with plans to expand its product line, including camera and photography bags. The founders reveal they live in China to oversee the manufacturing process, with 5,000 units ready for shipment.
The Negotiations:
The negotiation process involves all Sharks expressing skepticism about the $28 million valuation. Lori Greiner points out concerns about the product’s weight, design appeal, and the lack of consumer feedback. Kevin O’Leary and Robert Herjavec express reservations about the valuation but eventually join the deal, with Robert and Lori splitting the investment equally. Despite these challenges, Mark Cuban and Lori Greiner offer $1.4 million for a 10% stake (5% each).
In response to Mark and Lori’s offer, Gaston and Jesse counter with a proposal to pay back the full amount within 24 months. If they fail to do so, they would double the equity stake to 10% and offer an additional $1 in perpetuity starting from the repayment. Mark and Lori accept this counteroffer, securing a deal for a 10% stake in Trunkster with the possibility of increased equity if the founders fail to repay the investment within the specified timeframe.
