Phoozy Insulated Phone Cases
DEAL
EPISODE SUMMARY
🕓 Air Date: April 2, 2021
Asking For:
$500,000 for 10%
Investor:
Lori Greiner, Robert Herjavec (50/50)
Deal:
$500,000 for 8% + $1.50 royalty per unit sold until $500,000 is repaid
PRODUCT SUMMARY
PHOOZY is a thermal capsule made from space-suit technology that protects phones, laptops, and tablets from overheating, cold temperatures, water damage, and provides military-grade drop protection.
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Background Story
Kevin Conway and Josh Inglis, friends for over two decades, embarked on their entrepreneurial journey in 2016, driven by a compelling vision to safeguard valuable electronic devices. Kevin, a seasoned professional race car driver with more than 25 years of experience, and Josh, a former executive at a prominent home improvement retailer, leveraged their diverse skill sets to birth PHOOZY, an innovative solution for shielding pricey gadgets from a spectrum of environmental threats.
Their partnership was not merely a convergence of friendship but a synergy of professional backgrounds. Kevin’s racing expertise instilled a deep understanding of precision engineering, while Josh’s extensive corporate experience endowed him with invaluable insights into market dynamics and consumer needs. Together, they set out to bridge a conspicuous void in the realm of device protection.
PHOOZY, born from their collective passion for innovation and their shared aspiration to resolve a pressing market gap, harnessed space-suit technology to create a thermal capsule that could withstand scorching heat, bone-chilling cold, water immersion, and even unexpected drops. The result was a cutting-edge product that not only met the demands of modern life but also stood as a testament to the entrepreneurial spirit that fueled Kevin and Josh’s journey.
The Product
PHOOZY, the brainchild of Kevin Conway and Josh Inglis, is a groundbreaking product designed to address the ever-growing need for safeguarding our valuable electronic devices. This thermal capsule, inspired by space-suit technology, offers a comprehensive solution for protecting phones, laptops, and tablets from a wide range of environmental challenges.
At its core, PHOOZY serves as a robust shield against extreme temperatures, making it an indispensable companion for outdoor enthusiasts and tech-savvy individuals alike. Whether it’s enduring scorching heat under the sun or braving sub-zero temperatures in cold environments, PHOOZY ensures that your device remains safe and functional.
But its capabilities don’t stop there. This innovative product also provides military-grade drop protection, mitigating the risk of accidental falls or impacts that can cause irreparable damage to expensive gadgets.
PHOOZY’s versatility extends to aquatic environments as well. Thanks to its unique design, it can float in water, allowing users to confidently take their devices near water bodies without fear of submersion-related damage.
Available in various models, each tailored to different device types, PHOOZY offers a wide range of price points, ensuring accessibility for diverse consumers. Whether you’re looking to protect your smartphone, laptop, or tablet, PHOOZY has a solution tailored to your needs.
How It Went
The company’s position before Shark Tank
PHOOZY’s performance in the market is undeniably impressive and reflective of the product’s exceptional appeal. Within just 36 months since its inception, the company has managed to achieve remarkable sales figures, accumulating a total of $1.9 million. This rapid success underscores the product’s unique value proposition and the unwavering commitment of its founders to bring their vision to fruition.
In particular, the previous year’s sales reached a substantial $700,000, and the company is poised to surpass this figure with an anticipated $1.5 million in sales for the current year. Such consistent growth suggests a promising trajectory for PHOOZY. Projections further indicate an even more remarkable future, with an expected $4.5 million in sales for the upcoming year, reaffirming the product’s market demand and potential for expansion. PHOOZY’s direct-to-consumer sales strategy has proven highly effective, allowing them to maintain an impressive blended gross margin of 88%.
This not only highlights the product’s profitability but also underscores its viability in a competitive market. Perhaps the most remarkable aspect of PHOOZY’s success is the fact that it has been achieved without external funding. The founders, Kevin and Josh, demonstrated remarkable financial acumen by bootstrapping the entire venture, investing $85,000 of their own capital. This not only showcases their entrepreneurial prowess but also serves as a testament to their operational efficiency.
In sum, PHOOZY’s remarkable journey in the market speaks to the product’s appeal, the founders’ dedication, and their ability to navigate the business landscape successfully, setting the stage for continued growth and innovation in the field of device protection.
The Negotiations:
In the high-stakes negotiation on “Shark Tank,” Kevin and Josh, the founders of PHOOZY, faced a panel of seasoned investors, each with their own unique perspectives and offers. Lori Greiner and Robert Herjavec made a joint offer, presenting $500,000 in exchange for a total of 5% equity (2.5% each) in PHOOZY. Additionally, they proposed a $1 per unit royalty until they recouped $1 million, showcasing their belief in the product’s potential and their willingness to invest their expertise.
Mark Cuban initially proposed a $500,000 investment for 4% equity and a $1 per unit royalty until he recouped $1.5 million, highlighting his interest in the business but seeking a slightly different deal structure. However, he eventually aligned his terms with Lori and Robert’s offer.
The negotiations took an exciting turn when Lori suggested a partnership between her and Robert, offering the founders dual expertise and support. Kevin and Josh enthusiastically accepted this joint offer, which valued their company at $10 million. This decision not only injected much-needed capital into the business but also provided them with seasoned partners who could guide them through the challenges of scaling their product in the competitive device protection market.
The negotiation process showcased the founders’ ability to make strategic decisions under pressure and their shrewdness in leveraging the expertise of experienced investors. It was a pivotal moment that marked the next phase of PHOOZY’s growth and potential domination in the market.
