Oct 10, 2024
The Pitch Deck
Shark Tank US | All Five Sharks Fight For Deal With TheMagic5
Summary
Innovative Product
TheMagic5's custom-fitted swimming goggles use a 13-second face scan to create a perfect fit with no leakage and no marks, targeting swimmers and triathletes.
Market Potential
The goggle market in the US and Europe is worth $2.2 billion, with 40% of swimmers wearing goggles, presenting a large and growing market for TheMagic5.
Business Growth
TheMagic5 has 40,000 customers, $3 million lifetime revenue, and has been growing 3x annually since 2018, with a $20 million valuation for a 2.5% stake of $500,000.
Technological Edge
TheMagic5's robotics technology and in-house developed software create customized gaskets that fit each individual's face, setting them apart from standard goggles.
Strategic Relocation
Founders Bo Haaber and Rasmus Barfred moved from Denmark to the US to capitalize on the larger market and higher number of swimmers.
Timestamps
00:00 The Magic5 has developed custom-fitted swimming goggles using FB scanning technology, seeking $500,000 for 2.5% of their company on Shark Tank, with unique gaskets and shades for outdoor swimming.
01:55 TheMagic5 is a company that sells custom-made swimming goggles and has generated $3 million in revenue with 40,000 customers, but the sharks question the $20 million valuation and the pricing strategy.
03:01 The company has raised $1.5 million at a valuation of $9 million, with impressive revenue growth from $180k in 2018 to $1.5 million this year, and they are based in an undisclosed location.
03:51 TheMagic5 is a robotics company that manufactures and customizes goggles, with a utility patent on their fitting algorithm, using advanced robotics technology developed in-house.
04:44 All five sharks make competing offers for a deal with TheMagic5, with varying amounts of investment and equity percentages.
06:09 All five sharks fight to offer their expertise in scaling the business, with Lori offering sales, Mark and Robert offering tech, and Nero offering a track record of growing companies.
07:43 The entrepreneurs negotiate with the sharks, eventually receiving offers ranging from 3% to 6.5% equity in exchange for investments of $500,000 to $1 million.
09:20 The entrepreneurs are excited and grateful for the opportunity to work with their favorite investor, Robert, and regret partnering with Kevin for their athletic product.
Transcript
00:00 First in the tank is a new innovation in the fitness accessory space. Hi sharks I'm Rasmus and I'm boom. We're from the magic five we all know. Sharks have excellent Vision underwater but it's not easy for everyone else and that is why we wear swimming goggles but most swimming goggles today either leak or uncomfortable and it makes total sense of course. They do all of our faces are different. Swimming girls are one size fits all and that is why we have created the world's first custom fitted swimming goggles wow it only takes 13 seconds to scan your face and will deliver the goggles directly to your doorstep. Our FB scanning technology ensures a perfectly fitting goggle with no leakage and no marks after use some of the world's very best swimmers and triathletes. They already wear our goggles but we want all swimmers to get a pair of our goggles and to accomplish that we see King five hundred thousand dollars for two and a half percent of our company wow so sharks who wants to help create Magic Jax. In front of you you have two goggles you can try them on but they won't fit you because you haven't scanned your face. So we haven't been able to produce a pair of cogs for you have a look at the part of the goggle that touches your face.You can see that gasket is different from the two goggles that you have and that is really our secret sauce and what do they sell for 55. They're very dark that is for outdoor swimming. So we have like ranges from super light. One totally clear to very very dark and the design of the goggle means that you have a great peripheral view which is super useful. So you can navigate better.
01:55 How big is the goggle Market in the US and Europe 2.2 billion dollars 1.2 billion. No there's no chance in the U.S price I have three young Sons. They wear goggles all of their friends wear goggles but for a 20 million dollar valuation. I'm guessing you've already sold a lot of these yeah. So we have 40 000 customers so far uh. Lifetime revenue is three million when did you start. We started it in 2018. I'm we've been growing like three times every year. It's so logical. I mean my glasses are made for me. Why have swimming goggles never been custom-made. So we are triathlete. Both of us. I went on a vacation I forgotten my goggles. But I had to swim and then I purchased all the goggles that I could find none of them fit me. Then I called the best triathlete that I knew at the time that was wrestling with my nephew. Oh he's your nephew yes. Where are you from. We're from Denmark. Oh I don't understand why you're only charging 55 why aren't these 99. So we wanted to charge in the middle of the other high-end goggles right.
03:01 We didn't want price to be an issue for our customers. What does it cost to make it. It costs 14 okay and what is the customer acquisition cost that is twenty four dollars okay so guys. Nobody comes in here asking for five hundred thousand dollars for two and a half percent that's always to protect your previous investors so tell us how much money have you raised. We've raised 1.5 million dollars at what valuation. The last valuation that we had was nine million dollars can you walk us through how the ramp has gone over. Let's say the last three years in 2018 when we delivered the first goggles our Revenue was 180 the year after it was 370. Last year it was 1.2 million wow and so far this year we're at 1.5 impressive. So where are you based and where do you manufacture.
03:51 So I moved to Charlotte and Rasmus moved to New York. So we basically convinced our wives to make their bed and move to the U.S why did you choose to move to the U.S the market here is better and the relative number of swimmers is slightly higher than Europe. So then you're manufacturing where is that time so we got some of our parts from China and then all the customization that happens in Charlotte. North Carolina do you have any type of IP coverage. We have a Utility Patent on the fitting algorithm so you manufacture the goggles and you have to customize them to fit what is that process like yes we used. Advanced robotics technology to do it are you using third-party robotics or are you developing all yourself. All the software to control the robot is of course made by us not all companies can make robotics right Market's a goggle company not a robotics. No it's a robotics company that makes goggles right now exactly right exactly. But when you have a unique Niche and you're developing a new category.
04:44 It's not where you are. It's where you'll be. I'll offer you the 5 five hundred thousand dollars. But I want seven and a half percent and I don't want you to negotiate with everybody because you already know that they're flipping markets that means he doesn't want you to hear anything else. If you're more concerned about that Equity the two of us have an offer you may find very interesting okay. Guys. I already have a robotics company that I'm an investor in I have ai companies I have machine learning companies. I have AR companies and obviously being in the sports industry. I may not want to give up seven and a half percent. That's why if you. If that's too much then I'll listen to a counter just so you have it let me give you an offer that two sharks want to give you and you can get both the sales and the technology so how about this deal. Venture debt deal five hundred thousand dollars all right between the two of us and we're going to charge you. Three dollars a unit until we recoup one and a half million. Then the royalty goes away but we're only going to ask for five percent equity and you get two sharks or Rasmus. Let me tell you so my daughter was a world-class swimmer. In fact she was ranked in the top ten in the world in the butterfly when she was 12 years old. I've spent 18 years at swimming pools I get this market I'll do 500 000 for five percent. No royalty I just want to say what you need are partners so with Mr Wonderful. You know what you're.
06:09 Gonna get nothing nothing exactly nothing except for what will help you scale your business. I've been the CEO of three different companies in Silicon Valley. I know how to build extremely large audiences cost effectively. You have an amazing product but now how are we going to bring it to the masses. That's the kind of problem that I've solved over the last 20 years wait a minute. You need somebody who will really help you blast these out sell them. I'm product person I like to blow up. Sales I like to move fast and I like to Blitz the market and that's what I'm good at so. Lori do you have an offer not going to offer you Tech. But I'm going to offer you a lot of sales. I mean I have Mark and I have Robert who have both given you offers and they're on the tech end and I would join either one of them well. I'm asking them to either of you want me to come in that was a very good question. But I think that it comes down to what were you hoping to get here today in the next short while do you need to boost sales. Do you need to boost strategy do you need to boost. Tech guys guys we we've all been entrepreneurs and we know you can't choose you have to do both you need to generate sales and you need to answer. The Strategic questions about how to best build the business well. Nero has a fantastic track record. Doing this I mean I'll tell you is I've been first or second investor in six unicorns. So it's not like I don't know how to grow companies that I've built guys look.
07:43 I think I'd be happy to partner with Lori. I'm happy with the five percent. How do. We split that five percent guys we'll drop down one percent just to be more competitive because we're asking for five we'll go to four. We want that royalty structure in place but it's not Perpetual. We get back our Capital. It's not even that great a return but when you stay in the game you're good three times the capital right. No we're only making a million bucks off 500 000. So we're willing to go down on the equity and guys like I said I'll listen to a counteroffer and we have accounted and so will we yeah. Robert and I are going to do the 500 000. Six percent no royalty no royalty wasn't the offer five. It was that was the first of us and now it gotten. Worse got worse by a percent but you get two sharks. I'm happy to do 500 000 for five percent on my own. I think Lori brings a tremendous amount of it that gives you the sales but we need a little more equity. All of these offers that are five and six and seven and a half cause pain to your existing shareholder base. We understand that Niro and I are going to change our offer yet again down to three percent equity. So now we're totally aligned with resisting shareholders. If you think this company is going to be worth a lot. The equity is where the real value is long term. Guys guys I gotta get this deal. I'm gonna change my offer I'll give you one million for six and a half whoa it's a crazy offer for me right.
09:20 Now. We'll take it wow good job yeah thank you thank you I'm excited good. Job guys congrats nice job great job guys okay assistant perfect that's crazy good stuff. Robert was our favorite investor going into the show. He can really help us take the cargo business to the next level you're all in now. I'm bummed that I lost that one I think where you went. Wrong was partnering with Kevin because when you have an athletic product I'm a fine-tuned athlete Robert.