Freaker USA – Bottle Insulators
NO DEAL
EPISODE SUMMARY
🕓 Air Date: October 19, 2012
Asking For:
$200,000 for 10%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
Freaker offers a range of beverage insulators with stretchable fibers, accommodating any container size while boasting diverse designs and personalities.
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Background Story
Zach Crain’s entrepreneurial journey sprouted from humble beginnings, sparked by a desire to craft eco-friendly beer koozies after learning to knit at a local gathering. Driven by a commitment to sustainability and creativity, Crain embarked on a mission to transform reclaimed materials into functional art pieces, thus birthing the concept of Freaker. Fuelled by unconventional marketing strategies, including converting a box truck into a mobile haven for grilled cheese enthusiasts, Freaker USA captured the imagination of consumers nationwide, culminating in a pivotal appearance on Shark Tank.
The Product
Freaker’s patented beverage insulators boast a magical fusion of functionality and style, effortlessly accommodating containers of varying sizes with their stretchable fibers. With a kaleidoscope of over 35 designs, each Freaker exudes its own unique personality, making it a must-have accessory for any beverage aficionado.
Priced competitively at $8 to $10 at retail, and with wholesale prices starting at $4, Freaker offers retailers and consumers alike a winning combination of affordability and individuality.
How It Went
The company’s position before Shark Tank
Freaker USA has achieved $320,000 in sales within 13 months of launch, selling through approximately 200 stores and distributors in Japan and Canada. The company’s unique branding and innovative product design have contributed to its success. With a cost per unit of around $1 and wholesale prices starting at $4, Freaker USA has healthy profit margins. However, despite the company’s success, the valuation of $2 million on Shark Tank was deemed too high by the investors.
The Negotiations:
While the Sharks lauded Freaker’s stellar sales performance and innovative branding strategies, they balked at the lofty $2 million valuation proposed by Crain. Mark Cuban, in particular, expressed reservations, suggesting a more modest valuation in the range of $350,000 to $400,000. However, Crain stood firm in his valuation, ultimately opting to walk away from the negotiation table empty-handed. Despite the Sharks’ admiration for Freaker’s creativity and market traction, concerns lingered regarding the company’s scalability and founder’s valuation expectations, ultimately thwarting the possibility of a deal.
