Woosh – Smart Air Filter
DEAL
EPISODE SUMMARY
🕓 Air Date: October 14, 2022
Asking For:
$500,000 for 10%
Investor:
Kevin O'Leary
Deal:
$500,000 for 10% + $0.50 royalty
PRODUCT SUMMARY
Woosh is a smart air filter system that uses sensors and Wi-Fi connectivity to monitor filter performance and notify users when it needs to be changed, providing cleaner air with less waste.
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Background Story
Winston Mok, the founder of Woosh, was inspired to create the product during the 2019 wildfires in California when he sought an affordable way to improve indoor air quality. A former Google product manager, he moved from Canada to the U.S. before dedicating himself full-time to Woosh. The idea for Woosh came about when he realized the high cost of shipping filters and decided to develop a smarter, cost-effective solution.
The Product
Woosh is a two-part system consisting of a reusable frame and a smart air filter. The high-quality filter is placed inside the frame, it connects to Wi-Fi, equipped with integrated sensors to monitor its performance accurately. When it’s time for a replacement, Woosh sends a notification and a new filter in the mail.
Woosh offers several benefits over traditional cardboard filters. It reduces waste by reusing the frame and only replacing the filter itself. The product also provides real-time data on air quality and sends signals to compatible smart thermostats to circulate air when needed.
This integration can transform a home’s HVAC system into a smart air purifier. The Woosh frame and filter are currently available for purchase at $99, with replacement filters costing $20.
How It Went
The company’s position before Shark Tank
The company, Woosh, was in a pre-revenue stage at the time of the pitch, having raised $62,000 two months prior. However, they secured a significant partnership with Emerson, a Fortune 200 HVAC company, to bundle Woosh’s product with Emerson’s smart thermostats. This partnership with a well-established player in the HVAC industry was a promising development.
Woosh’s business model appears to rely on a combination of direct-to-consumer sales and partnerships with established HVAC companies. While their profitability and financial health were not disclosed in the pitch, they mentioned having a 33% margin on their product, which includes shipping. The company indicated they had patents pending and had received interest from major filter manufacturers, who were willing to provide their brand, technology, and manufacturing for Woosh’s filters.
The Negotiations:
During the negotiations on Shark Tank, Winston Mok initially asked for $500,000 in exchange for a 10% equity stake in Woosh. Kevin O’Leary offered $500,000 for a 15% stake and a royalty of 50 cents per filter in perpetuity. While initially hesitant about the perpetuity clause, Winston eventually accepted Kevin’s offer, but with a slight modification. He agreed to the 15% equity and the 50-cent royalty but wanted to keep the equity portion at 10%.
Kevin O’Leary was the only Shark to make an offer, and his business acumen and persistence ultimately convinced Winston to accept the deal. The negotiation showcased the importance of terms like perpetuity and equity in deal-making and the willingness of both parties to find a mutually acceptable compromise. In the end, Winston left the Tank with a $500,000 investment and the expertise of Mr. Wonderful to help grow Woosh.
