She began her pitch by sharing about her vast experience observing how her many nieces and nephews interact with toys. Daymond laughs at Robert for being squeezed out of the deal. But, Robert Herjavec gets the last laugh when ToyGaroo files bankruptcy and both Mark and Kevin lose their investment. Thanks to Phil Smy, we have a clear picture of what went down.
- Unfortunately, ToyGaroo’s operating expenses were too high to maintain, leading to its eventual downfall6.
- She pitched ToyGaroo to the investors on TV show Shark Tank and was able to walk away with a great deal.
- Kevin O’Leary acknowledges his wish for Nikki Pope to retain a larger share of Toygaroo but extends an offer nonetheless.
- I came in, licensing the Filmamora software to them and modifying it as needed – which essentially turned into a re-write of the code.
Kevin O’Leary tells Nikki Pope that it is very rare for him not to ask for the controlling share of the company, especially because he is a control freak. He doesn’t want the controlling share because he trusts Nikki Pope, and tells her that he will be able to make her rich. Nikki Pope continues her presentation by stating that Toygaroo solves the problem that millions of families face every single day. She continues by toygaroo stating that she has eleven brothers and sisters, and she is lucky enough to have thirteen outstanding nieces and nephews, who are all under the age of eight years.
After Toygaroo’s appearance on Shark Tank, the founders had managed to raise $250,000 investment, but still, after some months the company went out of business. Their cheapest plan which was also known as Joey Package costs $24.99 which contains 4 toys. They also had other variations in the packages like 6 toy packages and 8 toy packages.
- Kevin O’Leary spent millions on Zipz, only to see its potential fail.
- Pope studied psychology at Sam Houston State University.
- Nikki Pope answers the question by saying that they did a soft-launch with five hundred participants, which basically was like a test to see how many families were interested.
- She came in representing her product as Netflix for toys.
- But due to many reasons like high shipping costs, high inventory costs and after some research, it turned out that people were able to buy toys at a cheaper price in local stores.
The cheapest Toygaroo subscription plan was called the Joey Package and was priced at $24.99. It included four toys at a time and shipping both ways was free. Toygaroo’s more expensive packages included 6 or 8 toys and were priced at $32.99 and $42.99 respectively. The company couldn’t keep up with shipping costs, and that was matched with O’Leary and Cuban’s inability to add more money to the business.
What Happened To Toygaroo After Shark Tank?
The company’s website has fallen into disuse, and its social media presence has remained frozen in time since 2014. Robert Herjavec turns to Mark Cuban, proposing a collaboration in offering more capital to Nikki Pope and her business. Mark Cuban expresses his interest in the partnership. Kevin O’Leary and Barbara Corcoran wonder aloud why the equity distribution didn’t follow a more equal division, rather than Nikki relinquishing parts of her ownership to other partners. Nikki promptly responds that it amounts to sixty-four thousand dollars, covering an entire year’s worth of toys. Mark Cuban, always analytical, seeks to ascertain the extent of Toygaroo’s toy inventory.
What is Toygaroo?
The company is still open for business, but there are a few things that are concerning. One is their social media profiles have disappeared- no Facebook, no Twitter, no Linked In. Maybe they just felt they had enough buzz online that they didn’t need them or maybe they just couldn’t manage them any more. There have also been a few complaints about customer service lately, but you have to dig deep to find them online. Rather than ordering huge amounts of inventory and shipping it out on slim margins they could have created a waiting list for orders. Shark Tank generates a lot of curiosity purchases which could lead to higher churn rate.
Toygaroo – ‘The Netflix of Toys’
Further, it seems that the owners of ToyGaroo and the sharks, could not agree on business decisions such as shipping costs for instance. Overall, the idea was a good one, but it seems the business plan just couldn’t be fully carried out. The ToyGaroo company ask is for $100,000 for 10% of the company. A soft launch produced over 500 members paying $42 monthly. Each client received a box full of toys worth over $200. New, the toys would cost over $500 with the average family spending between $1,200 to $1,400 per year on toys.
Founding Toygaroo
As a parent of five with enough injection molded plastic toys to build a space shuttle, I can see the value of this service. Toygaroo didn’t exist when a majority of my kids were toddlers, but I wish it had. Mark Cuban and Kevin O’Leary invested $200,000 for 35% of the company, and the deal went through.
Netflix For Toys
There was the option to purchase the rented toys if families wanted to keep them. Nikki Pope answers the question by saying that a toy box has toys in it worth two hundred dollars, and it costs her anywhere between fifty to ninety dollars. This means that she made enough money to break-even, only after two and a half months of being in business. The toys were also available in local shops for a cheaper price, so it was natural that people will purchase the toys at a cheaper range than just renting them. Toygaroo is no longer offering a toy renting service. Nikki Pope was the face of Toygaroo, a company dubbed “the Netflix of toys” as parents rented a toy for a month and then returned it and got a new one.
He points out that Nikki Pope’s company hasn’t yet reached the million-dollar mark, yet she is seeking investment as if it were already at that level. However, he sees potential in Toygaroo and believes in its concept, indicating his willingness to invest based on faith in Nikki’s ability to nurture its growth. Robert Herjavec raises the issue of damaged toys, prompting Nikki to explain that in their six months of operation, Toygaroo has yet to completely replace a single toy. In case of damage, the toy is made available for purchase by the family at a discounted rate. ToyGaroo, often referred to as the “Netflix for toys”, was a toy rental service that could benefit various groups of people. However, ToyGaroo has ceased operations since 2012.
After Shark Tank
However, some of them became reluctant after finding out the startup’s equity was not evenly distributed. The triumph of Netflix undoubtedly played a pivotal role in the decision-making process for both Mark Cuban and the Canadian entrepreneur and mogul, Kevin O’Leary. Their extensive backgrounds and insights in the world of business and entertainment, combined with the innovative concept of Toygaroo, propelled them to join forces. A business must be able to cover its costs to be viable in the long term.
During the soft launch, over 1,000 potential customers expressed interest in the service. Shipping and inventory costs were soaring and under scrutiny the company was pressed purely for growth. However, on the flip side, certain investments ended terribly for sharks. In fact, one of the most expensive deals in the history of Shark Tank crashed and burned. Kevin O’Leary spent millions on Zipz, only to see its potential fail.
Barbara Corcoran, ever vigilant, inquires whether Nikki has the authority to sell a thirty-five percent stake. Kevin O’Leary, however, presses on, inquiring about why Nikki seemingly gave away a substantial portion of her company despite being the brains behind the idea. Nikki Pope reveals her husband as a partner, along with a web designer and two online marketers who have joined forces with her. Barbara Corcoran, keen on discerning the toy’s quality, inquires whether Nikki Pope can vouch for their caliber. In response, Nikki affirms the quality of the toys and proceeds to showcase several of them to Barbara and the other Sharks.
People would sign up for a “toy box” subscription and pick how many toys – 2, 3, 5, whatever the subscription level was. If they returned one we’d send a new toy from their list. That way there could be a near constant stream of toys coming into the house.