Basepaws
Basepaws is a company that wants to help people get to know their cats better through DNA. Basepaws has created a DNA collection kit and analyzation service that owners can use to get more information on the breed of their cat and any genetic diseases that it might be at risk for.[1]
The collection kit is as simple as a piece of tape owners can apply to the back of their cat that will lift off hairs with DNA. For those hairless breeds, there's also a swab. Whichever method, then, can be mailed back to Basepaws where the company will analyze the collected DNA and create a report on the animal.
The company plans to expand into dogs and horses, however the entrepreneur behind Basepaws says that the dog product hasn't already launched because it will, essentially, double the number of products the company has. It will cost twice what the cat tests costs as well. Apparently the technology behind the DNA tests differs between dogs and cats and all of it is done within the company's own lab that extracts and processes the DNA.
The entrepreneur stated that the horse product will come by the end of the next year.
The short term goal for the company is to partner with nutrition companies to figure out which foods are best for which animals. Eventually, however, Basepaws wants to become the "Carfax of breeders" to ensure that animals are genetically okay for breeding.
Each DNA kit provided by Basepaws costs $95 to the consumer and costs the company $25 to manufacture. In the ten months that the company has been offering their kit, they have sold 2,500 units and made $200,000 in sales. Basepaws expects to make $400,000 by the end of the year. All of this has thus far been through marketing on Instagram and sales through their own site.
In terms of prior fundraising, Basepaws has raised $350,000 on a convertible note with $3,000,000.
The entrepreneur is an impressive woman, having started three other companies in Russia, one of them having been sold to Groupon. Basepaws is her fourth business.
Making A Deal
Kevin comes out of the gate strong offering $250,000 in exchange for 8.3% equity and an additional 1.7% in advisory shares, clearly wanting 10% of the business but making an offer that will allow the entrepreneur to maintain some of her valuation.
Lori drops out of the deal, stating that the sales numbers thus far don't give her enough confidence. Daymond, likewise, drops out of the deal stating that his offer wouldn't be a generous as Kevin's. Mark also drops out, stating that he sees issues with scaling up the business.
Fortunately, the entrepreneur isn't left alone in the tank with Mr. Wonderful. Robert says that he loves the idea and that Basepaws could charge customers "thousands" for the horse tests. He makes, essentially, the same offer as Kevin but without making part of it advisory.
The entrepreneur asks if Kevin and Robert might think about teaming up and Kevin agrees, leaving the details as to the nature of the shares up to the entrepreneur (and presumably to be discussed off camera).
Without other information, your Stats Shark is going to assume that the deal was made for 10% in straight equity which would result in a bite in half of the value to $2,500,000 from the original $5,000,000. However, one must assume that the Shark Tank Bump of appearing on the show and making a deal with two sharks will result in sales that might more than make up for the lost valuation. This was also categorized as rare technology deal because the company doesn't just offer a service but has actually developed the technology behind the service as well.
Notes
- ↑ If this deal sounds familiar, it's because it's a DNA testing service like we saw from Season Nine with DNA Simple. The major difference is that this is for animals.