Apolla Compression Socks
DEAL
EPISODE SUMMARY
🕓 Air Date: April 1, 2022
Asking For:
$300,000 for 15%
Investor:
Lori Greiner
Deal:
$300,000 for 25%
PRODUCT SUMMARY
Apolla Performance offers high-tech compression socks designed to reduce pain, fatigue, and swelling, particularly targeted towards the dance community.
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Background Story
Apolla Performance, located in Florida and Michigan, was founded by Kaycee and Bri, both lifelong dancers with a profound understanding of the challenges faced by the dance community. Kaycee, with a master’s degree in kinesiology and certifications as a registered yoga teacher, national certified strength and conditioning specialist, and personal trainer, possessed an in-depth knowledge of body mechanics and injury prevention. Bri, a professional dancer with experience in modern jazz and ballet, underwent toe surgeries due to the wear and tear from her dance career.
This personal experience inspired their journey to develop a product that could alleviate the prevalent foot and ankle injuries among dancers. Their idea stemmed from Kaycee’s graduate school research, where she recognized the potential of high-targeted compression to provide flexible support and mitigate dance-related injuries. With their combined expertise in dance, kinesiology, and personal experiences of coping with chronic dance injuries, they embarked on creating Apolla, the high-tech compression sock that not only offers targeted support but also aids in reducing pain, fatigue, and swelling.
The duo’s shared passion for dance, coupled with their profound understanding of the human body’s biomechanics, enabled them to innovate a product that quickly gained recognition within the dance community. The brand’s emphasis on quality, innovation, and performance has made Apolla a go-to choice for dancers seeking reliable and effective foot support during rigorous training and performances.
The Product
Apolla Performance’s flagship product is the innovative compression sock, designed with specialized features to cater to the unique needs of athletes, particularly dancers. Crafted using sustainable yarns and targeted compression technology, these socks provide comprehensive support for the feet and ankles, aiming to alleviate common dance-related issues such as pain, fatigue, and swelling. The socks incorporate patented arch and ankle support, along with energy absorption pads strategically placed on the ball of the foot and the heel.
The design allows for a snug yet comfortable fit, providing dancers with the necessary stability and flexibility to perform intricate movements without compromising their range of motion. The socks’ construction mimics a supportive hug, reducing inflammation and promoting improved blood circulation during rigorous training sessions and performances. They are available in various styles and colors, catering to different aesthetic preferences.
Customers can purchase Apolla socks directly from the company’s website, with prices ranging between $32 and $40 per pair, depending on the specific style and features. With a focus on quality and functionality, Apolla’s socks have gained recognition not only among dancers but also among individuals seeking superior foot support for various athletic activities and everyday wear.
How It Went
The company’s position before Shark Tank
Apolla Performance has showcased strong growth and resilience since its inception, positioning itself as a premium brand within the dance community and beyond. With sales totaling $4.1 million since its launch in August 2016 and a current year-to-date revenue of over $800,000, the company has exhibited a robust financial performance. Despite the temporary setback during the pandemic, the brand swiftly adapted its strategies, leading to a remarkable 100% year-over-year growth rate in the most recent quarter. Additionally, their ability to maintain a low return rate of 2% reflects the high satisfaction level among their customer base.
The company predominantly operates through a direct-to-consumer model, which accounts for 85% of its sales, with the remaining 15% derived from wholesale partnerships. Apolla’s strong rapport within the dance community has fostered relationships with renowned professional dancers, studios, and performance groups, solidifying its position as a trusted provider of performance-enhancing gear. The company’s commitment to quality and innovation has facilitated a steady influx of loyal customers, contributing to a returning customer rate of 52%.
In terms of funding, Apolla has relied on a combination of initial investments and organic revenue growth to sustain its operations and product development. With a recent 20% increase in gross margin, reaching 73%, the company is on track to achieve profitability this year. This improvement was facilitated by a strategic rebranding and pricing adjustment, emphasizing the premium quality and unique benefits of their products. The company’s dynamic approach to business expansion involves a focus on both serving the existing dance community and penetrating new markets, thus ensuring sustained growth and continued success in the performance wear industry.
The Negotiations:
During the negotiation phase on Shark Tank, the founders of Apolla Performance, Kaycee and Bri, captivated the Sharks with their in-depth knowledge of their product and its targeted market. Initially seeking $300,000 for 15% of their business, the Sharks were impressed by their presentation and the uniqueness of their product. However, concerns were raised regarding the relatively high price point of their socks, ranging from $32 to $40 per pair, which led to discussions around their marketing strategies and potential for mass market appeal.
As the negotiation progressed, all Sharks expressed appreciation for the product’s quality and benefits, but some voiced reservations about its wider market potential. While Mark Cuban and Daymond John opted out, Lori Greiner and Kevin O’Leary were the final Sharks in contention for a deal. Lori, acknowledging the founders’ intelligence and the product’s effectiveness, offered $300,000 for 25% of the business, highlighting her belief in their potential and her ability to help them scale.
Kevin O’Leary also recognized the value of the product and its personal relevance to his own foot problems, making a competing offer of $300,000 for 25%. Despite the request to reduce their equity stake to 20%, Lori stood firm at 25% due to the company’s need for rapid expansion into the mass market. Eventually, Kaycee and Bri accepted Lori’s offer, marking a pivotal moment for their brand and solidifying a partnership with an experienced investor known for her expertise in consumer products. The negotiation showcased the founders’ resilience, product knowledge, and their ability to secure a strategic deal that would propel their company to new heights.
