THEMAGIC5 Custom Swim Goggles
DEAL
EPISODE SUMMARY
🕓 Air Date: October 29, 2021
Asking For:
$500,000 for 2,50%
Investor:
Robert Herjavec, Mark Cuban (50/50)
Deal:
$1,000,000 for 6,50%
PRODUCT SUMMARY
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Background Story
Rasmus and Bo, both avid triathletes hailing from Denmark, embarked on their entrepreneurial journey after encountering a common swimmer’s dilemma: ill-fitting goggles. Frustrated by the lack of comfortable and leakage-free options in the market, the duo decided to revolutionize the swimming goggles industry. In 2018, they established TheMagic5, marking the inception of their ambitious venture. Since its inception, TheMagic5 has made significant strides in the world of swimwear accessories.
Boasting an impressive customer base of 40,000 individuals and accumulating a remarkable $3 million in lifetime revenue, the company’s innovative approach to swimming goggles has clearly struck a chord with consumers. Recognizing the vast potential of the American market, Rasmus and Bo decided to make the leap across the Atlantic, settling in the United States. Their strategic move allowed them to tap into a larger demographic of swimmers and expand their manufacturing capabilities.
What sets TheMagic5 apart is its cutting-edge technology, which utilizes advanced robotics for customization. The founders hold a utility patent for their proprietary fitting algorithm, ensuring that each pair of goggles is tailored to perfection. This meticulous attention to detail has garnered attention from professional athletes and recreational swimmers alike, making TheMagic5 a frontrunner in the industry.
The Product
TheMagic5’s custom-fitted swimming goggles are a game-changer in the world of aquatic sports. What sets them apart is their dedication to providing a personalized and flawless fit for every swimmer. The innovative app-based scanning technology employed by TheMagic5 takes a mere 13 seconds to capture the unique contours of your face. This process ensures an impeccable fit, eliminating common issues such as leakage and discomfort associated with standard one-size-fits-all goggles.
These state-of-the-art goggles come in a range of shades, from crystal clear to intensely dark, catering to various swimming conditions, including outdoor environments. What’s more, they offer an exceptional peripheral view, allowing swimmers to navigate with ease and precision.
Priced at a reasonable $55, TheMagic5’s custom-fitted goggles provide exceptional value for the level of personalization and comfort they offer. Ordering them is a breeze, with customers able to make their purchase online. The customization process takes place in Charlotte, North Carolina, where advanced robotics technology is employed to ensure that each pair meets the high standards of quality and comfort.
How It Went
The company’s position before Shark Tank
Since its inception in 2018, TheMagic5 has demonstrated robust growth, establishing itself as a prominent player in the swimming goggles industry. With an impressive customer base of 40,000 individuals and cumulative lifetime revenue of $3 million, the company’s performance reflects its capacity to meet the demands of discerning swimmers worldwide. In terms of funding, TheMagic5 has secured $1.5 million, with the last valuation pegging the company’s worth at $9 million. This financial backing has enabled them to further their innovative endeavors and expand their market reach.
The company’s steady revenue growth is evident, with $1.5 million generated thus far in the current year. This upward trajectory is a testament to the product’s popularity and effectiveness in addressing a longstanding issue in the swimming accessories market. Operating primarily in the U.S. market, TheMagic5 has strategically positioned itself to tap into the significant demand among American swimmers. Their manufacturing process involves sourcing some components from China, while the crucial customization process takes place in Charlotte, North Carolina, utilizing advanced robotics technology.
Crucially, TheMagic5 holds a utility patent for its proprietary fitting algorithm, safeguarding its unique technology from imitation or replication by competitors. With the founders relocating to the U.S., they have made a strategic move to capitalize on the larger American swimming market, providing them with an ideal platform to continue their trajectory of growth and innovation. The company is structured to meet the evolving needs of the swimming community, combining technology, customization, and quality to offer a product that resonates with both professional athletes and recreational swimmers.
The Negotiations:
The negotiations for TheMagic5 were intense and ultimately resulted in a favorable outcome for the founders, Rasmus and Bo. The Sharks were clearly impressed with the innovative custom-fitted swimming goggles and recognized the growth potential of the company. Initially, Mark Cuban and Lori Greiner offered $500,000 for 7.5% equity, a proposal that sought to secure a significant stake in the company. Meanwhile, Robert Herjavec and Nirav Tolia presented an offer of $500,000 for 6% equity, without a royalty structure, aiming to strike a balance between investment and equity.
However, the founders carefully weighed their options, taking into consideration the impact on their existing shareholders. They decided to negotiate further, seeking a deal that would maintain alignment with their current investor base. In a surprising turn, Mark Cuban and Robert Herjavec revised their offer to $1 million for 6.5% equity. This new proposal not only increased the investment amount but also provided room for Robert’s expertise in sales to complement Mark’s tech-focused approach.
Ultimately, the founders accepted this offer, securing Mark Cuban and Robert Herjavec as partners. This decision was undoubtedly influenced by the potential for accelerated growth and sales expertise that Mark and Robert brought to the table. The negotiation process highlighted the delicate balance between equity ownership and securing partners who could contribute significantly to the company’s expansion. The founders’ ability to navigate the offers and make a well-informed decision reflects their strategic acumen and commitment to the future success of TheMagic5.
