Milkify – Breast Milk Freeze-Drying
DEAL
EPISODE SUMMARY
🕓 Air Date: April 7, 2023
Asking For:
$400,000 for 10%
Investor:
Gwyneth Paltrow, Lori Greiner (50/50)
Deal:
$400,000 for 20%
PRODUCT SUMMARY
Milkify offers a unique service to freeze-dry and store breast milk as a convenient and shelf-stable powder for mothers to use at their convenience.
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Background Story
Dr. Berkley Luck and Pedro Silva, a husband-and-wife team from Houston, Texas, founded Milkify. Berkley, a research scientist with a Ph.D. in molecular microbiology, was inspired by her studies of the infant gut microbiome and the desire to provide a solution to store breast milk effectively.
Pedro, with a background in private equity, initially invested $40,000 into the business to support Berkley’s research and development efforts. Over time, they grew their business to address the needs of breastfeeding mothers by creating a service that freeze-dries breast milk, preserving its nutrients and making it shelf-stable.
The Product
Milkify offers a revolutionary service that freeze-dries individual bags of breast milk, allowing mothers to store their milk as a safe and convenient powder. The freeze-dried breast milk can be preserved for up to three years without refrigeration.
To use the milk, customers add water, making it a convenient and nutritious option for infant and toddler feeding. They provide a complete shipping kit to customers, including a pharma-grade insulated cooler, a return shipping label, and detailed packing and shipping instructions.
The cost is based on the volume of breast milk sent, averaging around $1.60 per ounce, with an average order value of $475.
How It Went
The company’s position before Shark Tank
Milkify had $2 million in registered preorders, with lifetime sales of $525,000. In their first year of nationwide sales (2021), they generated $184,000, and they were on track to finish the year at half a million. Currently, they are operating at a break-even point and plan to achieve a 20-25% net profit margin in Q2 of the next year. Their main challenge is the need for additional funding to expand their facilities and keep up with customer demand. They are sourcing funding primarily from their own investments and that of their parents.
The Negotiations:
The negotiation led to an offer from Gwyneth Paltrow and Lori Greiner, who provided a $400,000 loan with a convertible note for 20% equity in the company. The founders initially hesitated due to concerns about the loan’s impact on cash flow but ultimately accepted the offer with the convertible note structure. The deal was made with the combined expertise of both Paltrow and Greiner, who believed in the product’s potential to empower and support working mothers.
Other sharks, such as Mark Cuban and Kevin O’Leary, were not interested due to concerns about the product’s limited appeal and valuation. Ultimately, Milkify secured a deal with Gwyneth Paltrow and Lori Greiner, marking an exciting opportunity for the company’s growth and accessibility to a broader market of breastfeeding mothers.
