Sheets Laundry Club
DEAL
EPISODE SUMMARY
đź•“ Air Date: November 19, 2021
Asking For:
$500,000 for 5%
Investor:
Daniel Lubetzky
Deal:
$500,000 for 8% + 2% advisory shares
PRODUCT SUMMARY
Sheets Laundry Club offers eco-friendly dehydrated sheets of laundry detergent to combat the plastic crisis in the laundry industry.
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Background Story
The founders of Sheets Laundry Club, Chris and Chris, embarked on their journey driven by a shared commitment to address the pressing issue of global plastic pollution. Their inspiration came from an unexpected source: one of them, a former U.S. Army Blackhawk pilot, gained a bird’s-eye view of the world’s plastic crisis during deployments. Witnessing the extensive environmental damage caused by plastic waste in various countries left a profound impact on them.
Chris, the CEO of the company, brought his extensive military background to the table, having served as a military police officer and then fulfilling his dream of becoming a Blackhawk pilot. Tragically, his lungs suffered severe damage due to exposure to toxins from burning plastic waste during his deployments in Iraq in 2007 and 2008. This personal experience ignited his determination to find a solution to the plastic crisis. Campbell, the other founder, brought entrepreneurial expertise to the partnership, having founded businesses over 15 years.
However, he sought to embark on a venture with a profound purpose, one that extended beyond profits and encompassed a genuine commitment to environmental sustainability. Their shared passion for eliminating plastic waste was the driving force behind Sheets Laundry Club. They recognized the laundry industry as a significant contributor to the plastic problem and responded by developing a patented, plastic-free laundry detergent sheet—a tangible step towards creating a more sustainable future.
The Product
Sheets Laundry Club presents an innovative and eco-friendly solution to the laundry detergent dilemma with their dehydrated laundry detergent sheets. These sheets are a convenient and sustainable alternative to traditional liquid or powder detergents.
Using the product is straightforward—users need only toss a single sheet into their washing machine along with their dirty laundry. During the wash cycle, the sheet dissolves completely, effectively cleansing the clothes and leaving them soft and fresh. This not only simplifies the laundry process but also eliminates the mess and waste associated with traditional detergents.
What sets Sheets Laundry Club’s product apart is its commitment to sustainability. The detergent sheets are primarily crafted from natural ingredients, with a key component being sodium lauryl sulfate surfactant derived from coconut oil. This plant-based approach ensures that the product is gentle on both fabrics and the environment. It also avoids the use of synthetic chemicals commonly found in mainstream detergents.
In addition to their core laundry sheets, the company offers a diverse range of related products. This includes floor-cleaning sheets and scent boosters, allowing customers to embrace plastic-free cleaning solutions across various aspects of their household chores. Sheets Laundry Club’s product line represents a significant step towards greener and more convenient cleaning practices.
How It Went
The company’s position before Shark Tank
In 2020, Sheets Laundry Club demonstrated impressive sales performance, amassing a total of $2.046 million in revenue. Their flagship product, the laundry sheets, proved to be the most popular, contributing significantly with $1.2 million in sales. This early success showcased the market’s appetite for their innovative and eco-friendly approach to laundry care. One notable development in their journey was the signing of an exclusivity agreement with Kimberly-Clark, a major player in the industry and the patent holder for dissolvable laundry detergent sheets.
While this agreement presented a unique opportunity for Sheets Laundry Club, it comes with a deadline; the exclusivity agreement is set to expire in October 2024, with no option for renewal. This time constraint adds a layer of urgency to their expansion efforts. To diversify their product offerings and reduce dependency on a single item, Sheets Laundry Club expanded its product line to encompass various cleaning products, such as floor-cleaning sheets and scent boosters. This strategic move aligns with their vision of becoming a comprehensive provider of plastic-free cleaning solutions.
With a growing customer base of over 21,000 monthly subscribers and recurring revenue approaching $3 million for the year, Sheets Laundry Club has established a solid foothold in the market. They are actively working on further expansion, including venturing into retail, with aspirations to secure placements in prominent retail chains like Target. This proactive approach positions them for continued growth and impact in the mission to eliminate plastic waste from laundry.
The Negotiations:
During the negotiation phase on “Shark Tank,” Sheets Laundry Club faced both skepticism and interest from the Sharks, ultimately securing a deal with Daniel. Initially, some Sharks expressed reservations about the founders’ salesmanship skills and their extensive product line with 46 SKUs. Barbara even voiced doubts about their ability to sell effectively. However, the founders responded with confidence, highlighting their remarkable year-over-year growth, including a jump from $2 million to an anticipated $7 million in sales for the current year.
Their digital marketing strategies and user-generated content played a pivotal role in this impressive growth. When Daniel made an offer of $500,000 for 10% of the company, the founders countered with $500,000 for 8% and an additional 2% in advisory shares. This negotiation tactic allowed them to secure a more favorable deal while still receiving the desired investment amount. Ultimately, they agreed to Daniel’s terms of $500,000 for 10% of the company.
The negotiation showcased the founders’ resilience and adaptability in the face of initial skepticism. Their ability to present their compelling sales figures and their understanding of digital marketing convinced Daniel to invest. This deal positions Sheets Laundry Club for further expansion and strengthens their mission to combat plastic waste in the laundry industry.
