Blueland – Eco-friendly Cleaning Products
DEAL
EPISODE SUMMARY
🕓 Air Date: September 29, 2019
Asking For:
$270,000 for 2%
Investor:
Kevin O'Leary
Deal:
$270,000 for 3% + $0.50/kit royalty until money is earned back
PRODUCT SUMMARY
Blueland offers an eco-friendly cleaning solution with dissolvable tablets and reusable bottles to reduce plastic waste.
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Background Story
Sarah and Syed, the founders of Blueland, introduced their eco-friendly cleaning products on Shark Tank. Sarah, a Harvard graduate with a background in economics and private equity, previously sold a mobile shopping app to a major search engine.
Syed, born in Pakistan, moved to the U.S. at the age of 10, holds a chemistry degree, and was a Director of Foreign Relations at a leading nontoxic cleaning company. Together, they aimed to address the environmental impact of plastic cleaning bottles and formulated effective, eco-friendly cleaning products.
The Product
Blueland’s products include a foaming hand soap and three cleaning sprays for various surfaces. The innovation lies in dissolvable tablets that users drop into water-filled reusable bottles, eliminating the need for single-use plastic bottles.
The tablets are EPA-approved and have undergone third-party studies, outperforming leading competitors. The starter set, comprising one bottle and one tablet, is priced at $12, while the Essentials kit, including one hand soap and three cleaning sprays, is priced at $39. Refill tablets cost $2 each, offering a cost-effective and eco-friendly alternative to traditional cleaning products.
How It Went
The company’s position before Shark Tank
Blueland, at the time of the pitch, had raised $3 million at a $13.5 million valuation, with funding from venture capital and successful entrepreneurs. Operating for just over a month, they achieved $200,000 in direct-to-consumer sales and planned to launch in a national retailer. The founders emphasized a lean, high-growth business model and had no listed partners or wholesalers during the pitch. The negotiation with Kevin resulted in a deal of $270,000 for 3%, with an additional royalty until the investment was recouped.
The Negotiations:
The negotiation began with Blueland seeking $270,000 for 2% of the company. Mark Cuban opted out early, stating the founders seemed more interested in a commercial than a deal. In a surprising turn, Daniel proposed a $1 million investment for 25%, catching both the entrepreneurs and other sharks off guard. Lori and Daniel revised their offer to $270,000 for 8%, while Kevin offered $270,000 for 6%.
The founders countered with $270,000 at 3%, with the added royalty, and Kevin accepted, sealing the deal. Ultimately, Kevin, expressing his affinity for royalties, struck a deal at $270,000 for 3% and a royalty of 50 cents per kit until the investment was recovered. The negotiation showcased the sharks’ different approaches, with Kevin leveraging royalties and Daniel emphasizing his immigrant success story. The founders successfully secured a deal that aligned with their vision for a high-growth, environmentally conscious business.
