LuminAid – Inflatable Floating Solar Light
DEAL
EPISODE SUMMARY
🕓 Air Date: February 20, 2015
Asking For:
$200,000 for 10%
Investor:
Mark Cuban
Deal:
$200,000 for 20%
PRODUCT SUMMARY
LuminAID offers an innovative solar light that inflates into a waterproof lantern, providing up to 16 hours of illumination without the need for traditional batteries.
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Background Story
LuminAID, presented on Shark Tank by founders Anna Stork and Andrea Shreshta, originated from a unique blend of architectural ingenuity and a commitment to humanitarian causes. The two entrepreneurs, who were students at Columbia Graduate School of Architecture, found inspiration for their venture in the aftermath of the Haiti earthquake in 2010. Witnessing the dire need for lighting solutions in disaster-stricken areas without access to electricity, Anna and Andrea embarked on a mission to create a practical and portable lighting device.
The duo spent a semester prototyping the product by hand, crafting the first 50 units in their kitchens. A pivotal moment occurred when they found themselves in Japan during the 2011 earthquake and utilized their prototypes during power outages. This real-world testing reinforced the universal need for a reliable and portable lighting solution in emergency situations. The core idea behind LuminAID was born – an innovative solar light that goes beyond traditional flashlights or lanterns. The product starts as a sleek, compact package and, when needed, inflates to form a lightweight, waterproof lantern.
This inflatable design, combined with solar-powered LED lights, makes LuminAID not only practical for outdoor adventures but also a crucial tool for first responders in areas lacking electricity after natural disasters. LuminAID’s founders are not only driven by the desire to offer a unique lighting solution but also by a strong humanitarian mission. Their commitment to the “AID” in LuminAID shines through, especially in providing essential lighting to those affected by natural disasters, thus making a positive impact on people’s lives globally. The product reflects their dedication to innovation, addressing a fundamental need, and making a meaningful contribution to emergency response efforts.
The Product
LuminAID is a revolutionary solar-powered light that stands out for its innovative design and versatile functionality. The product begins as a compact, sleek package and, when needed, can be inflated to create a lightweight, waterproof lantern. Equipped with energy-efficient LED lights, LuminAID provides up to 16 hours of illumination with two brightness settings, all without the need for traditional batteries.
Its inflatable design allows for easy storage and portability, making it an ideal companion for various outdoor activities such as camping, hiking, and boating. One of the key features of LuminAID is its reliance on solar power. The built-in solar panel charges the device during the daytime, storing energy in a thin, efficient, rechargeable battery. This makes LuminAID an eco-friendly and sustainable lighting solution.
Additionally, the product is designed to be versatile and useful in a variety of situations, making it suitable for home and car use, and especially valuable in emergency situations. LuminAID is available for purchase directly online for individual consumers. The company has also established partnerships with wholesale, retail, and commercial entities, expanding its reach globally.
Notably, LuminAID has successfully catered to NGOs and government agencies, with significant sales to organizations like ShelterBox. The cost to manufacture the product is $4.75, ensuring a reasonable margin for both the company and its partners. This unique and practical lighting solution not only meets the needs of outdoor enthusiasts but also serves a critical role in humanitarian efforts worldwide.
How It Went
The company’s position before Shark Tank
LuminAID has demonstrated robust performance, reflecting a successful trajectory in both sales and strategic partnerships. In the first year of operation, the company achieved $250,000 in sales, showcasing strong initial market acceptance. Over the last 12 months, LuminAID experienced substantial growth, surpassing the $1 million mark in sales. This impressive revenue increase underscores the product’s appeal and the effectiveness of the company’s business strategy.
The company operates with a diverse customer base, catering to three primary segments. Firstly, they sell directly to individual consumers online. Secondly, they engage in wholesale, retail, and commercial partnerships, facilitating broad market access. Notably, LuminAID has established itself as a trusted supplier to NGOs and government agencies, providing critical lighting solutions for emergency situations. Significant sales to renowned organizations like ShelterBox underscore the product’s efficacy in humanitarian aid efforts.
In terms of funding, LuminAID initially leveraged personal investments, with each founder contributing $7,500. The company successfully launched its product through a crowdfunding campaign, raising $50,000 against a $10,000 goal. Furthermore, LuminAID secured additional funding through business-plan competitions and grant competitions, amassing a total of $195,000. A remarkable aspect is that $145,000 of this funding has been reinvested back into the business, signaling a commitment to growth and development.
The company’s structure aligns with its growth strategy, emphasizing partnerships and collaborations. LuminAID’s success in securing major NGO partnerships, such as with ShelterBox, highlights its commitment to impactful humanitarian initiatives. This collaborative approach not only positions the company as a reliable supplier but also contributes to its reputation as a socially responsible business.
The Negotiations:
LuminAID faced an exciting array of offers during their pitch on Shark Tank, showcasing the product’s appeal to the sharks. The negotiations were lively, with each shark presenting unique proposals to secure a stake in the innovative solar lighting company. Mark Cuban, known for his tech-savvy investments, offered $300,000 for a 20% equity stake in LuminAID. Lori Greiner, the “Queen of QVC,” matched Mark’s equity ask, offering $200,000 for a 20% share.
Daymond John took a different approach, proposing $200,000 for a slightly lower 15% equity stake and expressed interest in leading LuminAID’s next round of financing, providing an option for additional capital. Kevin O’Leary, always the shrewd negotiator, presented a royalty deal, offering $200,000 for a 4% royalty on commercial retail sales, with the royalty expiring once he recouped $800,000. However, this deal did not involve equity ownership.
The negotiation took an interesting turn when Lori Greiner and Daymond John engaged in a friendly competition to win the deal. Ultimately, Lori secured the partnership by offering 20% equity, matching Mark Cuban’s offer. While Mark congratulated the entrepreneurs and expressed excitement about working together, Kevin O’Leary, in his trademark style, humorously commented on Lori’s “greed” in securing the deal.
The founders acknowledged the competitive offers and expressed gratitude for the support, with Mark Cuban emerging as the chosen strategic partner. In the end, LuminAID accepted Mark Cuban’s offer of $300,000 for a 20% equity stake, aligning the company with a seasoned investor known for his tech expertise and entrepreneurial guidance. This negotiation showcased the sharks’ recognition of LuminAID’s potential and the founders’ ability to secure a solid deal for their innovative solar lighting solution.
