MTailor Custom Clothes
NO DEAL
EPISODE SUMMARY
🕓 Air Date: February 12, 2016
Asking For:
$2,500,000 for 10%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
MTailor sells men's custom shirts by measuring customers with a phone's camera, offering over 10,000 unique shirt combinations through their app.
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Background Story
MTailor, founded by Miles Penn, is based in San Francisco. Penn, frustrated with the hassle of shopping for clothes in stores and the uncertainty of online shopping, came up with the idea for MTailor. The company aims to provide the perfect fit through custom clothing without the high cost and inconvenience associated with traditional custom tailoring.
Penn, a Stanford graduate with a background in math and computer science, developed the proprietary measuring technology along with a friend from Stanford. The idea is to make the custom clothing experience accessible and efficient by using a smartphone’s camera to take precise measurements, claiming to be 20% more accurate than a professional tailor.
The Product
MTailor’s product is a mobile app that allows users to order custom men’s shirts by capturing measurements with their phone’s camera. The app offers over 10,000 unique shirt combinations, including fabric, collar, cuff, and tucking options.
The measuring process is simple and takes less than 30 seconds, requiring users to wear form-fitting clothing, lean their device against a wall, and do a single spin while the camera captures the necessary measurements. The company claims that this method is 20% more accurate than a professional tailor.
The custom shirts, which typically cost $125, are sold by MTailor for $69, cutting costs by eliminating the time-consuming and expensive in-person measurement process.
How It Went
The company’s position before Shark Tank
MTailor had experienced significant growth, reaching $150,000 a month in revenue by July. However, supply chain issues in the past month caused a drop to $130,000 in revenue. Despite this setback, the company was on track to achieve $2 million in revenue for the year. The founder mentioned having $1.4 million in the bank, providing some financial cushion.
The company faced challenges in its supply chain, prompting the founder to fly to China to address the issues personally. The business structure indicated that they were primarily focused on building their brand rather than licensing the technology to other companies. MTailor’s net return rate, including re-makes, was reported to be 15%, lower than the typical online fashion store return rate of 25-30%.
The Negotiations:
The sharks expressed concerns about the $25 million valuation MTailor came in with, especially after missing revenue projections due to supply chain issues. Daymond John made an offer of $2.5 million for 17.5% and expressed interest in licensing the technology. However, the founder declined, emphasizing their focus on building their own brand and not licensing the technology. Kevin O’Leary then made a debt deal of $2.5 million with 2.5% equity, aiming for a 7% return over 36 months.
Mark Cuban expressed concerns about the founder’s ability to handle the challenges of building the business, leading him to opt out. Barbara Corcoran and Lori Greiner also didn’t see eye-to-eye with the founder’s approach, and no deal was made. Despite a reasonable debt deal from O’Leary, the founder declined, citing a preference for equity partners fully invested in the company and expressed reluctance towards a balloon payment structure. The negotiations ended without a deal, and MTailor left the tank without securing investment.
