Biz Tips: Shark Tank Deal: The Kombucha Shop Accepts $200,000 in Cash and $150,000 in Credit from Barbara Corcoran and Sara Blakely

Biz Tips: Shark Tank Deal: The Kombucha Shop Accepts $200,000 in Cash and $150,000 in Credit from Barbara Corcoran and Sara Blakely

Biz Tip:

Shark Tank Deal: The Kombucha Shop Accepts $200,000 in Cash and $150,000 in Credit from Barbara Corcoran and Sara Blakely

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Kate Tecku, owner of The Kombucha Shop, entered the Shark Tank asking for $350,000 in return for 10% equity in her company. Kombucha is a popular and healthy drink that is filled with probiotics. Despite its elevated price tag at roughly $3-5 per bottle in grocery stores, Kombucha is the fastest growing beverage in the United States. The key ingredient to Kombucha is the scoby which is responsible for the fermentation and production of good bacteria in the fizzy tea beverage.

The Kombucha Shop sells a kit that begins with brewing tea and adding a table to grow the Scoby culture. The process then proceeds to fermentation over 10 days before yielding a tea product that can be consumed. Creating your own Kombucha reduces the prices to as low as 25 cents per beverage and custom flavor options are available.

The Sharks are immediately interested in the Kombucha Shop because Kate has seen lifetime sales of $3.2 million and is on track to finish this year at $1.7 million while enjoying healthy margins on her product and new customer acquisition cost of $0 per customer. Not only is the company profitable, but the overhead is low as Kate is primarily a one-woman business. She sells her product direct to consumer, through Amazon and at a handful of brick and mortar stores. Because she has been tackling the business on her own, she is looking for a strategic partner that will help her blitz the market and grow the company in more retail spaces, especially Whole Foods.

While sampling the products, the Sharks’ reactions show that Kombucha is an acquired taste and many of the Sharks do not enjoy the taste but do ee it’s value and like the business that Kate has built. Kevin O’Leary is the first Shark to make an offer of $350,000 for 20% ownership in the company. Barbara Corcoran shares that she believes that Kate is a dream entrepreneur as she has a high attention to detail but is also capable of seeing the bigger picture. Barbara also likes that Kate looks like the picture of health and offers her $200,000 in cash and $150,000 in credit for 10% of The Kombucha Shop. Guest Shark, Sara Blakely, says that she will split the investment with Barbara. Kate quickly accepts Barbara and Sara’s offer.

What do you think about The Kombucha Shop’s business model and Barbara and Sara’s offer? Would you purchase this product? Sound off in the comments below!

For a full summary of this episode, check out this article. Shark Tank airs on Sundays at 9:00 PM EST on ABC.

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