Kudos Diapers
DEAL
EPISODE SUMMARY
🕓 Air Date: January 6, 2023
Asking For:
$250,000 for 5%
Investor:
Gwyneth Paltrow, Mark Cuban (50/50)
Deal:
$250,000 for 7% + 3% advisory shares
PRODUCT SUMMARY
Kudos offers premium disposable diapers made from 100% soft, natural cotton, providing a more eco-friendly and comfortable option for babies.
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Background Story
Amrita Saigal, the founder of Kudos, comes from a family of engineers and holds degrees in mechanical engineering from MIT and an MBA from Harvard. She gained experience working as a manufacturing engineer at Procter & Gamble, where she witnessed the environmental impact of plastic in sanitary pads and diapers.
Inspired to make a change, Amrita started her first company in India, producing biodegradable sanitary pads from waste banana-tree fiber, which became a leading eco-friendly brand in India. Upon returning to the US, she launched Kudos to provide eco-friendly, cotton-based diapers for babies.
The Product
Kudos diapers are designed to be a more sustainable and comfortable alternative to traditional disposable diapers. They are made from 100% soft, natural cotton, eliminating the need for plastic materials.
Kudos diapers feature patent-pending double-dry technology, utilizing two absorption layers instead of one to prevent leaks and blowouts, ensuring babies stay dry and comfortable.
Customers can purchase Kudos diapers either as a one-time purchase for $88 or through a subscription model for $78 per month, with each box containing a one-month supply of diapers.
The product is competitively priced within the eco-friendly diaper market, which typically ranges from 20% to 50% more expensive than traditional diapers.
How It Went
The company’s position before Shark Tank
Kudos launched a year ago and has achieved impressive sales of $850,000 in its first year. The company has raised a total of $3.2 million in funding. Kudos has positioned itself as a direct-to-consumer brand, with a cost of customer acquisition at an impressive $23 per customer, mainly driven by word of mouth.
Despite not yet being profitable, Kudos has plans to achieve profitability in the upcoming year, with projected sales of $4.5 million. The company has incurred aggregate losses of $1.5 million since its inception. Kudos has primarily operated online and has not entered retail distribution channels yet. However, it has plans to expand into other online retailers and is already gaining traction among its target audience, including Gwyneth Paltrow’s goop audience, which shares the brand’s values of eco-friendliness and safety for babies.
The Negotiations:
Amrita Saigal entered the Shark Tank seeking $250,000 for 5% equity in her eco-friendly diaper company, Kudos. All Sharks expressed interest in the product and recognized the environmental and health benefits of using natural cotton instead of plastic in diapers. Gwyneth Paltrow and Mark Cuban made a joint offer, proposing $250,000 for 12% equity, with 6% each and an additional 3% in advisory shares for a total of 15% equity. Their offer emphasized the value of their combined expertise and networks.
Amrita countered their offer, suggesting $250,000 for 7% equity (4% each) instead of the initial 12%. Gwyneth and Mark accepted the counteroffer, agreeing to the terms of 7% equity each and 3% in advisory shares, totaling 10% equity for each Shark. The negotiation showcased the Sharks’ belief in Amrita’s vision and the potential of Kudos in the eco-friendly diaper market. It also highlighted the value of having two Sharks with complementary skills and networks to help the company grow and reach a broader audience.
