CATEapp – Call and Text Eraser App
DEAL
EPISODE SUMMARY
🕓 Air Date: September 21, 2012
Asking For:
$50,000 for 5%
Investor:
Kevin O’Leary, Daymond John (50/50)
Deal:
$70,000 for 35%
PRODUCT SUMMARY
Cate App is a smartphone application designed to discreetly intercept calls and texts from designated contacts to prevent relationship conflicts stemming from suspicions of infidelity.
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Background Story
Neil Desai, the owner of CATEapp, hails from a background rooted in entrepreneurship, starting from his early days of selling Pokemon cards on eBay. Despite earning a degree, Neil struggled to secure a fulfilling job and returned to his entrepreneurial roots, stumbling upon the CATEapp through a chance encounter with a police officer selling the application.
With a keen eye for opportunity, Neil seized ownership of the app, recognizing its potential despite not being its developer. Alongside his sister, Neil spearheaded the venture, leveraging his hustler mentality and entrepreneurial spirit to bring the product to market.
The Product
CATEapp operates as a privacy tool, allowing users to designate a blacklist of contacts. When a blacklisted contact attempts to call or text the user, Cate intercepts the communication, storing it discreetly within its interface.
This interception occurs seamlessly, preventing the user’s significant other from detecting any suspicious activity, even if they are directly viewing the user’s phone. The app aims to mitigate relationship conflicts arising from suspicions of infidelity, offering a discreet solution to maintain privacy and trust within relationships.
The application is available for Android, iPhone, and BlackBerry devices, covering a significant portion of the cell phone market. Users can purchase the app for $4.99 for Android and iPhone devices, while the BlackBerry version is priced at $9.99. With an estimated 80% of marriages experiencing at least one cheating partner, CATEapp addresses a widespread concern in relationships by providing a practical solution for maintaining privacy.
Beyond its primary function as a privacy app, CATEapp also finds potential applications in other industries, such as preventing conflicts in friendships or business relationships by discreetly managing communications. Additionally, the app’s ability to intercept and store communications could be adapted for various purposes, including safeguarding sensitive information or maintaining confidentiality in professional settings.
How It Went
The company’s position before Shark Tank
CATEapp has achieved significant traction in the market, boasting approximately 10,000 customers, including both paid and free users. Of these, around 5,500 customers have purchased the app, generating revenue of approximately $5,000 to $5,500, with a profit margin of $4,000. The company’s total investment to date stands at roughly $45,000, indicating a relatively low investment compared to the revenue generated.
The company’s customer base comprises individuals seeking privacy and discretion in their communications, particularly in the context of personal relationships. While the app primarily targets consumers, its potential applications extend to various industries where privacy and confidentiality are paramount.
The Negotiations:
The negotiations for CATEapp began with Neil Desai seeking $50,000 for a 5% equity stake in the company. Kevin O’Leary and Daymond John countered with an offer of $70,000 for a 35% stake, which Neil ultimately accepted after considering multiple offers from the sharks. Barbara Corcoran also expressed interest in investing $50,000 for a 30% stake, contingent on repositioning the app as a privacy tool rather than solely targeting cheaters.
Neil’s negotiations showcased his determination and willingness to entertain offers from multiple sharks, ultimately securing a deal that aligned with his vision for the company. Despite initial skepticism regarding the app’s morality and valuation, Neil effectively defended his product, emphasizing its practical applications and market demand. The negotiations highlighted the sharks’ diverse perspectives and investment strategies, with each offering unique insights and proposals for the future of CATEapp.
In the end, Neil’s decision to accept Kevin and Daymond’s offer reflected his confidence in their ability to add value to the company and facilitate its growth. The negotiations underscored the importance of strategic partnerships and demonstrated the sharks’ willingness to invest in innovative solutions addressing prevalent issues in modern society.
