Basepaws Cat DNA Kit
DEAL
EPISODE SUMMARY
🕓 Air Date: April 28, 2019
Asking For:
$250,000 for 5%
Investor:
Kevin O'Leary, Robert Herjavec (50/50)
Deal:
$250,000 for 10%
PRODUCT SUMMARY
Basepaws offers the world's first DNA test for cats, providing insights into a cat's ancestry, breed, genetic traits, and potential diseases.
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Background Story
Anna Skaya, the founder of Basepaws, embarked on the journey of creating the world’s first DNA test for cats driven by a passion for animals, biotechnology, and a desire to deepen the connection between pets and their owners. Adopting her cat, Koko, from a local shelter, Anna experienced the profound bond that can develop between humans and their feline companions. However, she realized there was much she didn’t know about her beloved pet.
This realization sparked the idea for Basepaws. Anna’s background played a pivotal role in shaping the company’s trajectory. With a history of building successful brands, including selling a company to Groupon, she possessed the entrepreneurial acumen needed to navigate the competitive landscape. Anna’s upbringing further fueled her journey, having spent more time in laboratories as a child than on playgrounds, thanks to her biologist parents. This unique blend of personal and professional experiences laid the foundation for Basepaws.
The company is located in Los Angeles, where it operates its own lab for processing DNA samples. Anna’s vision was to go beyond merely creating a consumer product; she aimed to collaborate with nutrition companies and make a significant impact on animal health using the vast database generated from their DNA tests. The inception of Basepaws represents a convergence of Anna’s expertise, personal passion, and a commitment to improving the lives of pets and their owners through cutting-edge biotechnology.
The Product
Basepaws offers a revolutionary product, the world’s first DNA test for cats, designed to provide comprehensive insights into a feline companion’s genetic makeup. The process is simple yet powerful. Cat owners receive a Basepaws cat kit, which includes a swab and adhesive tape. The DNA sample is collected painlessly using the tape, akin to a gentle “waxing” process for the cat. The collected sample is then sent back to Basepaws’ lab in Los Angeles.
Once processed, cat owners receive a detailed report that delves into their cat’s ancestry, breed, genetic traits, and potential predispositions to diseases. This information not only satisfies curiosity about a pet’s background but also serves practical purposes, such as understanding potential health risks.
Basepaws’ product stands out with its agility and technology, differentiating it from competitors. The affordability of the test, priced at $95, makes it accessible to a wide range of cat owners. The kit can be conveniently purchased through Basepaws’ website, and the company has effectively utilized platforms like Instagram for engaging and humorous advertisements, fostering a connection with cat enthusiasts.
How It Went
The company’s position before Shark Tank
In its brief 10-month existence, Basepaws has demonstrated impressive growth and financial stability. Having sold 2,500 cat kits and generating $200,000 in revenue, the company is on track to reach a projected $400,000 in earnings for the current year. This showcases the market demand for their innovative DNA testing service for cats. Basepaws has strategically positioned itself in the pet DNA testing market by establishing its own lab in Los Angeles, ensuring a streamlined and efficient process for analyzing DNA samples. The company’s commitment to agility is reflected in its unique technology, setting it apart from competitors in the pet DNA testing industry.
The company’s funding history is noteworthy. Basepaws raised $350,000 through a convertible note on a $3 million cap, an impressive feat considering the comprehensive nature of their operations, including intellectual property, research and development, and lab facilities. This demonstrates the founders’ ability to maximize resources and build a biotech company efficiently. In terms of partnerships, Basepaws has expressed an interest in collaborating with nutrition companies, leveraging its database to contribute to advancements in animal health. This strategic vision positions the company not only as a consumer-facing brand but also as a potential contributor to broader advancements in the field.
Basepaws has adopted a direct-to-consumer approach, primarily selling its cat kits through its website and leveraging social media platforms like Instagram for marketing. The company’s structure involves renting bench space for its lab processes, showcasing a flexible and cost-effective approach to operational requirements. With a foundation built on a convertible note, Basepaws has efficiently utilized available capital to establish itself as a key player in the emerging market of pet DNA testing.
The Negotiations:
The negotiations for Basepaws on Shark Tank unfolded with a strong pitch from Anna Skaya, the founder. Seeking $250,000 for a 5% equity stake in her innovative cat DNA testing company, Anna garnered interest from multiple Sharks. Kevin O’Leary and Robert Herjavec both made offers. Kevin proposed an investment of $250,000 for an 8.3% equity stake, along with an additional 1.7% in advisory shares, valuing the company around $3 million. On the other hand, Robert mirrored the investment amount but asked for a straight 10% equity stake.
In a surprising turn of events, the two Sharks decided to collaborate on a joint offer. They offered $250,000 for a combined 10%, with Kevin taking 5%. This collaboration brought a unique dynamic to the negotiation, and Anna expressed her excitement about having both Kevin and Robert on board. Lori Greiner opted out due to concerns about the company’s sales performance, and Mark Cuban expressed reservations about the scalability of the lab processes. Despite these considerations, Anna secured a solid deal with the collaborative offer from Kevin and Robert.
The negotiation showcased the Sharks’ interest in the innovative pet DNA testing market and their recognition of the potential value that Basepaws could bring to the industry. In the end, Anna accepted the joint deal, highlighting her enthusiasm for the collaboration and expressing confidence in the value that both Sharks could contribute to Basepaws’ growth. The negotiation concluded with a handshake and positive energy, solidifying the partnership between Basepaws and the collaborative investment from Kevin O’Leary and Robert Herjavec.
