TROBO – STEM Toy
DEAL
EPISODE SUMMARY
🕓 Air Date: April 8, 2016
Asking For:
$100,000 for 10%
Investor:
Robert Herjavec
Deal:
$166,000 for 33.3%
PRODUCT SUMMARY
TROBO is a wirelessly connected, cuddly toy that reads personalized stories about science and math to children using tablets and phones, providing an interactive and educational experience.
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Background Story
TROBO creators, Chris Harden and Jeremy Scheinberg, based in Orlando, Florida, sought to address the issue of traditional stuffed toys becoming neglected after a short period. Drawing on their manufacturing expertise, they developed TROBO, a plush robot that engages children in personalized, educational storytelling. The idea stemmed from their desire to create a lasting connection between children and educational content.
The duo crowd-sources story content, paying contributors for their submissions. Despite initial challenges in gaining support from large retailers, they believe in TROBO’s potential to revolutionize the way children interact with educational content.
The Product
TROBO is not just a plush toy; it’s a storytelling companion for children. Wirelessly connected to tablets and phones, TROBO reads personalized stories about science and math. Children not only read along but also interact with questions and puzzles, building an avatar within the app to become the main character.
The toy’s emotional connection is designed to ensure it doesn’t end up at the bottom of the toy box. TROBO operates as a speaker, and its content is crowd-sourced through story contests, with contributors being paid for their submissions.
Priced at $59.95, the toy includes the first five stories. Additional stories can be purchased for $4.95 each, with plans to introduce a subscription model. TROBO’s uniqueness lies in its ability to merge physical plush toys with digital content, creating an immersive educational experience for children.
How It Went
The company’s position before Shark Tank
TROBO faces challenges in securing orders from larger retailers, with 600 units ordered from small boutiques. Despite media coverage in 45 publications, the response has been limited. The founders admit to being newcomers in the industry, seeking guidance and support. They have attended two trade shows, but the response has been modest due to dealing with boutique and lower-volume retailers.
TROBO’s valuation is based on the potential of its content delivery model. While they have garnered interest from smaller buyers, the founders recognize the need to expand their reach and secure partnerships with major retailers for substantial growth. The company is in talks with manufacturers and representatives, primarily targeting mid-box retail.
The Negotiations:
The Sharks express concerns about the $60 price point and the viability of the content delivery model. Daymond and Kevin drop out early, citing skepticism about the product’s market potential. Other Sharks express reservations about TROBO’s valuation and the lack of interest from larger retailers. Robert, however, sees an opportunity in TROBO’s connection between plush animals and online content delivery.
He offers $100,000 for 1/3 of the business, contingent on securing a licensed deal with DreamWorks. The founders counter with a $166,000 offer for the same equity stake, valuing the company at $500,000. Robert accepts the counteroffer, and the deal is made. The founders express excitement about joining forces with Robert and believe the partnership will open doors for TROBO in the industry.
