CertifiKID Family Activities
DEAL
EPISODE SUMMARY
🕓 Air Date: April 7, 2019
Asking For:
$600,000 for 8%
Investor:
Kevin O'Leary
Deal:
$600,000 for 19%
PRODUCT SUMMARY
CertifiKID is a website and app offering discounted family-friendly experiences, services, and products, providing daily parent-approved deals and over 300 local and national exciting deals at any time.
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Background Story
CertifiKID, a family-focused discount platform, traces its origins to the entrepreneurial spirit of Jamie Ratner, the CEO, and her husband Brian Ratner, the President. The Ratners, residing in Potomac, Maryland, embarked on this venture with a vision of making memorable family experiences accessible without straining budgets. Jamie, a former stay-at-home mom with a background in criminal justice security management, discovered her passion for deals through running a blog. Despite lacking formal business, IT, marketing, or sales experience, she harbored a desire to turn her fascination with daily deal concepts into a business tailored for moms.
Brian, a lawyer with a focus on high-level business strategy and finance, brought complementary skills to the partnership. The concept of CertifiKID emerged when Jamie envisioned a site akin to existing daily deal platforms but specifically geared towards families and moms. With a limited business background, Jamie’s creativity and determination led to the creation of CertifiKID, addressing a gap in the market for affordable, family-friendly experiences. The platform operates in major cities like Washington, D.C., Baltimore, Chicago, L.A., Philadelphia, and Atlanta.
The Ratners’ journey reflects the essence of family entrepreneurship, as they transformed a simple idea into a thriving business. CertifiKID, rooted in Jamie’s initial blog on deals, blossomed into a comprehensive platform offering daily parent-approved deals and over 300 ongoing local and national offerings. The couple’s journey underscores the potential for success when passion, creativity, and a commitment to family values converge in the realm of entrepreneurship.
The Product
CertifiKID serves as a premier platform for families seeking affordable and exciting experiences, offering a diverse array of discounted activities, services, and products. The platform operates through a straightforward process, making it accessible to users of all backgrounds.
Upon signing up, users receive daily, parent-approved offers directly to their email, ensuring a constant stream of enticing opportunities. Additionally, CertifiKID provides a user-friendly website and app interface, allowing customers to explore and purchase over 300 local and national deals at any given time. The offerings encompass a wide range of family-friendly experiences, from adventures and classes to camps and special events, catering to various interests and age groups.
The business model is structured to benefit both consumers and businesses. Companies sign up with CertifiKID at no upfront cost, and the platform takes a percentage from each sale. For customers, the process involves purchasing vouchers for specific experiences at a discounted rate, making quality family time more affordable.
CertifiKID’s appeal lies not only in its vast selection of deals but also in its focus on delivering value to families. The platform ensures that families can create lasting memories without breaking the bank, making it a go-to resource for those seeking budget-friendly yet enjoyable activities. The commitment to the family niche distinguishes CertifiKID, establishing it as a trusted source for accessing exciting experiences at unbeatable prices.
How It Went
The company’s position before Shark Tank
CertifiKID has demonstrated robust financial health and a strong market position since its inception in 2010. As of the pitch, the company reported generating over $30 million in sales, with a projected net income of $700,000 for the current year. This remarkable growth underscores CertifiKID’s effectiveness in tapping into the family and mom niche, resonating with a broad customer base seeking affordable and diverse experiences. The company has strategically expanded its reach into major cities, including Washington, D.C., Baltimore, Chicago, L.A., Philadelphia, and Atlanta. This geographic presence positions CertifiKID as a significant player in the family-focused daily deal market.
CertifiKID’s success is not only attributed to its appeal to consumers but also to its business model that fosters partnerships with local businesses. Companies can join the platform at no upfront cost, making it an attractive avenue for businesses seeking exposure to a family-oriented audience. CertifiKID earns revenue by taking a percentage from each sale, forming a mutually beneficial relationship with its partners. The customer base of CertifiKID comprises over a million subscribers, with approximately half considered highly engaged.
The platform’s daily email newsletters boast a 10% open rate and a 14% click-through rate, indicating active and interested users. The company’s commitment to customer engagement and satisfaction is evident in its consistent delivery of value-driven deals. As a family-run business, CertifiKID has been profitable since its third month of operation, relying on seed money initially hidden away by founder Jamie Ratner. The decision to seek an investment of $600,000 during the pitch was driven by a desire for strategic guidance and partnership, particularly after the passing of Jamie’s father about a year and a half ago.
The Negotiations:
The negotiation process for CertifiKID on “Shark Tank” was dynamic and filled with strategic considerations from both the founders and the Sharks. Jamie and Brian Ratner entered the Tank seeking a $600,000 investment for 8% of their company, CertifiKID, a platform specializing in family-friendly deals. The negotiations kicked off with interest from multiple Sharks, including Kevin O’Leary, Barbara Corcoran, and Mark Cuban. O’Leary made the first offer, proposing $600,000 for a 17.5% equity stake.
Barbara Corcoran followed suit, suggesting a franchise model with $600,000 for 25%. Mark Cuban expressed interest in turning CertifiKID into a franchise but made a more favorable offer of $600,000 for a 20% stake. As negotiations unfolded, Lori Greiner inquired about data capture, emphasizing the potential in mining data, especially birthdays of children for targeted marketing. Despite expressing interest, Lori did not make an offer. The Ratners, navigating through the offers and considering strategic partnerships, eventually accepted Kevin O’Leary’s offer of $600,000 for an 18.5% equity stake.
This deal was reached after negotiating down from O’Leary’s initial offer of 17.5%, demonstrating the Ratners’ negotiation skills and O’Leary’s willingness to meet in the middle. The negotiations showcased the Sharks’ diverse approaches and the Ratners’ ability to leverage their business’s strengths to secure a deal that aligned with their growth plans. The acceptance of O’Leary’s offer marked a significant milestone for CertifiKID, positioning the company for accelerated expansion and continued success in the family-friendly deals market.
