ZOMM Alarm Device
NO DEAL
EPISODE SUMMARY
🕓 Air Date: October 5, 2012
Asking For:
$2,000,000 for 10%
Investor:
No Deal
Deal:
No Deal
PRODUCT SUMMARY
ZOMM creates a device that alerts users when they are separated from their cell phones, also serving as an emergency dialer and key finder.
WATCH HERE
IN A RUSH?
Click these to jump to the section you want to read.
Background Story
Founded by Henry Penix, ZOMM emerged from the frustration of frequently forgetting his cell phone in various places. Penix, the CEO, leveraged his experience in building early learning centers with his wife before selling the business in 2000. The idea for ZOMM came after he realized the common problem of leaving cell phones behind and the need for a solution. With a vision to revolutionize cell phone usage, Penix aimed to create a product that not only prevented phone loss but also provided additional features like emergency calling and key-finding capabilities.
The Product
ZOMM is a compact device that attaches to a keychain and syncs with a user’s smartphone via Bluetooth. When the phone and the device are separated by a certain distance, ZOMM alerts the user through vibrations, lights, and alarms, ensuring they never leave their phone behind unintentionally. Additionally, it functions as an emergency dialer, allowing users to program emergency contacts and call for help with a single press of a button.
Furthermore, ZOMM can be used to find misplaced keys by emitting a sound signal when activated through the smartphone app. The device is designed for ease of use with simple one-button controls. It can be purchased online through the company’s website or select retail partners. The price point is not specified in the pitch, but it is implied to be affordable for the average consumer.
How It Went
The company’s position before Shark Tank
ZOMM experienced rapid growth in sales since its launch in late 2010, reaching $5 million in sales by 2011 and projecting $7.2 million for the current year, with a net profit of $2 million. The CEO, Henry Penix, has personally invested $4 million into the company, and there is another investor with a 17% stake who invested $5 million. The company’s financial situation is somewhat precarious, as they are seeking an additional $2 million despite previous substantial investments.
They cite the need for cash to support ongoing operations and the development of a new product called Lifestyle Connect, which offers additional health monitoring features. However, there are concerns about inventory management and the allocation of funds, with a significant portion of the previous investment tied up in excess inventory from overproduction during the Christmas season.
The Negotiations:
Despite ZOMM’s impressive sales figures, none of the Sharks were convinced to invest. Concerns were raised about the company’s financial management, particularly regarding the allocation of previous investments and the decision to seek additional funding. The Sharks questioned why the company, with its strong sales performance, was facing a cash shortage and holding excess inventory.
Henry Penix explained that the need for funding was partly due to the development of a new product, Lifestyle Connect, but the Sharks remained skeptical. Ultimately, none of the Sharks were willing to make an offer, citing concerns about the company’s financial health and the management’s decision-making. Penix left the Tank without a deal, recognizing that his ambitious growth strategy may have backfired, and his company was now in a precarious position despite its initial success.
