Crazy idea raking in $3 million
THE founder of an eco-friendly coconut bowl business has scored a $300,000 investment on the season premiere of Shark Tank from investor Andrew Banks and Boost Juice founder Janine Allis, who said she initially thought the business was a "joke".
After an awkward silence while he closed his eyes for a brief spot of meditation, Victorian entrepreneur Jake McKeon quickly impressed the Sharks when he revealed just how much money he was making from discarded coconut shells.
"Every year billions of coconut shells are discarded and burned as waste," he said. "We reclaim these shells and turn them into these beautiful bowls that people love eating from.
"Since selling our first coconut bowl in January 2016, we've now sold well over 100,000 units. The first year we turned over $200,000, last year we grew by more than 500 per cent to revenue of almost $1.2 million. This year our organic growth is forecast to push beyond $3 million."
Mr McKeon said he initially got the idea on a holiday to Bali, where he saw coconut bowls being sold as souvenirs.
"I thought it was actually better as a raw shell, so I had a guy make them for me, took them home in my suitcase and began selling them," he said.
The coconut shells, which are now reclaimed from coconut farms in Vietnam and turned into bowls in the company's workshop, cost "a couple of dollars" to produce but retail for $12.95. The brand has grown its sales entirely through social media, with nearly 300,000 followers on its Instagram page.
"Every single day hundreds of our customers are sharing photos of themselves using our bowls on social media, and this amount of user-generated content and exposure has allowed us to grow without paid marketing," he said.
Mr McKeon said he expected to make a profit of $600,000 in the next 12 months after paying himself a salary of $80,000, and was seeking the investment to begin building a team around him. The numbers wowed the judges.
"I have to be honest, you went from a joke to someone serious," Ms Allis said. "Because when I sat here I went, coconut bowls, really? But wow, super impressive for such a short period of time, so congratulations."
Initially seeking $300,000 for a 10 per cent stake, valuing his business at $3 million, Mr McKeon received a flurry of offers from the Sharks, with RedBalloon founder Naomi Simson and Greencross founder Glen Richards partnering for a counter offer.
After some more meditation, Mr McKeon ultimately settled on Janine and Andrew. "To be honest, my gut was telling me Janine just because of what she's been able to achieve with Boost Juice, and Andrew with his proven success in America, it was just too much for me to say no," he said.
The other contestant to walk away with a deal on Tuesday night's episode was NSW mum Lori Phegan, who came in seeking $100,000 for 10 per cent of her controversial gifting business, The Inappropriate Gift Company.
"The idea for the Gift Co. came after a particularly stressful week at work as an HR manager. I thought, there must be more fun to life than this," she said.
Since launching a basic website in November 2016, the company has sold nearly 24,000 products to more than 9000 customers in 36 countries, making $470,000 revenue. Ms Phegan said the goal was "to be the global home of inappropriate gifts".
Impressed by the pitch and her solid sales figures, Steve offered $100,000 for 20 per cent, Janine offered $100,000 for 18 per cent, while Andrew and Naomi both offered $100,000 for 15 per cent.
Naomi swooped in with a last-minute offer of $100,000 for 15 per cent, plus another $100,000 for another 10 per cent if she could double the business within 12 months - and Ms Phegan took the deal.
"We wanted Naomi because it's an obvious choice because she's in the gifting business," she said. "I'm so happy."
Shark Tank returns to Channel 10 on Tuesday 22 May at 8:30pm.