Delighted By Hummus – Dessert Hummus
DEAL
EPISODE SUMMARY
🕓 Air Date: October 15, 2017
Asking For:
$600,000 for 12%
Investor:
Mark Cuban
Deal:
$600,000 for 25%
PRODUCT SUMMARY
Delighted By offers dessert hummus, a sweet alternative made from chickpeas, 100% vegan, gluten-free, non-GMO, with less than 5 grams of sugar per serving.
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Background Story
Makenzie Marzluff, the founder of Delighted By, has a background in nutrition and culinary arts. The idea for dessert hummus came to her when she wanted to create a healthy cookie dough dip for a Super Bowl party. Using chickpeas in a blender, she created a dip that tasted like cookie dough but remained a healthy hummus.
Launched 13 months ago, Delighted By reached a million dollars in gross sales and secured placement in 1,200 stores. Makenzie’s entrepreneurial journey involved personally driving across seven states, visiting 88 Wegmans stores to secure shelf space for her product.
The Product
Delighted By’s dessert hummus offers a guilt-free alternative to traditional sweets. Flavors include brownie batter, snickerdoodle, vanilla bean, and chocolate chip, each maintaining the health benefits of traditional hummus while resembling popular dessert flavors.
With less than 5 grams of sugar per serving, the product targets health-conscious consumers. The innovative approach led to shelf placement alongside regular hummus in 1,200 stores. Customers can enjoy the dessert hummus in various ways, such as dipping it in pretzels, apples, or using it as frosting on cupcakes.
The taste is likened to cookie dough, offering a healthier alternative to traditional desserts. Delighted By’s commitment to being 100% vegan, gluten-free, and non-GMO positions it as a unique and innovative product in the market.
The product is currently available in stores, and Makenzie envisions expanding its reach further. The company’s valuation was based on its impressive gross sales of a million dollars within a short period, showcasing the product’s market potential.
How It Went
The company’s position before Shark Tank
Delighted By, having launched 13 months ago, achieved a significant milestone by reaching a million dollars in gross sales. The product’s placement in 1,200 stores, particularly in the refrigerated sector, indicates its appeal and demand. Makenzie’s dedicated efforts, personally driving to secure shelf space, demonstrate her commitment to the business. The founder has invested $20,000 personally and raised $400,000 from friends and family at a valuation of $4 million.
The current valuation of $5 million is justified by the product’s innovation and positive reception in the market. Delighted By has become recognized as the only innovative product in its category, gaining a competitive edge. Despite the challenges of entering the refrigerated sector and competing for shelf space, the company has secured a position as an innovator in the industry. The founder’s agility in personally managing operations, driving sales, and building relationships with buyers contributed to the company’s success.
Looking ahead, Delighted By aims to achieve $1.5 million in sales for the current year. The founder is open to using the investment to build a team and enhance operations, recognizing the importance of strategic direction for future growth.
The Negotiations:
The negotiation process involved skepticism from the Sharks due to the high valuation of the company at $5 million, representing 33 times the projected earnings for the year. Several Sharks expressed concerns about the competitive landscape and the need for significant capital to sustain growth. Alex Rodriguez bowed out early, citing the high valuation and the need for smarter capital. Mark Cuban and Kevin O’Leary were critical of the valuation but offered alternative deals.
Kevin O’Leary proposed a $600,000 loan at 11% interest with a 6% equity stake, while Mark Cuban proposed $600,000 for 25% equity. Ultimately, Makenzie accepted Mark Cuban’s offer, securing a deal that involved both a loan and equity, emphasizing Cuban’s experience and support in building the company to its full potential.
The negotiation highlighted the challenges of entering the competitive food industry, especially in the refrigerated sector, and the importance of strategic guidance and support for a growing company. Despite initial hesitations about the high valuation, Mark Cuban’s dual investment approach provided a mutually beneficial solution for both parties.
