Coffee Meets Bagel is growing at double digits monthly since they first launch. Their customers love that their name doesn't have the dating stigma. They offer a free service, but they have a premium service available.
You can buy coffee beans to learn things like how many mutual friends you have. They source their data from Facebook. They don't have to go through an application process because all the information is in the profiles.
Coffee Meets Bagel gives #LadiesChoice after Shark Tank
Their #LadiesChoice upgrade allows women to receive a select number of algorithmically picked men at noon each day. They decide if they are interested in meeting their selections. No combing through irrelevant profiles with Coffee Meets Bagel.
The previous year they made $87,000 and this quarter they have done $270,000 and are projecting a million dollars.
First Aired: 01/09/15
Company: Coffee Meets Bagel
Entrepreneurs: Soo Kang, Dawoon Kang, Arum Kang
Episode: Season 6 Episode 13 Week 12
Ask: $500k for 5%
Sharks: Mark Cuban, Barbara Corcoran, Kevin O'Leary, Lori Greiner, Robert Herjavec
Deal: No deal, but turned down Thirty million dollar offer from Mark Cuban
They are each taking a $100,000 salary as of the Shark Tank pitch. They will lose one million to a million dollars of expense. Coffee Meets Bagel expect to break even on ten million dollars in revenue. They are going to increase their customer acquisition cost.
Coffee Meets Bagel has secured 7.8 million dollars in funding. The user base double after the Shark Tank pitch. The dating industry is an estimated two billion dollar opportunity that is steep in competition.
The majority of Coffee Meets Bagel users are female which differentiates itself from other dating apps which are predominantly male.
The app combs through Facebook user profiles to find quality matches for the women. Users receive the Facebook profiles, and if they accept, a chat window becomes available for seven days allowing each to communicate.
The Kang sisters come from an entrepreneurial family with their dad running his metal recycling business with his brother. Ahreum Kang graduated from Harvard Business School.
What the Shark Tank Investors say about Coffee Meets Bagel
Mark Cuban asks them if he offered thirty million dollars for the company would you take it? They said no. They believe that this business will be as big as Match.com. It is a newer version of hotornot.com. He likes it, but it is a massive risk, so he is out.
Barbara Corcoran – She likes the idea that it gives women control, but the evaluation is an extreme risk, so she is out.
Kevin O'Leary – He believes that this is a pretty big bet. He thinks he is valuable and he is very greedy. He doesn't do 5% deals, so he is out.
Lori Greiner – You have raised a lot of money, you are not making money, and you are drawing $300,000 in salaries which is a lot of money, and this can be knocked off, so she is out.
Robert Herjavec – states “You are an all or nothing play. Because you are loosing so much money. You are raising money and getting users which is risky.” He is out.
Coffee Meets Bagel after Shark Tank
Rejecting Mark Cuban's thirty million dollar offer delivered an enormous amount of criticism from Shark Tank fans who thought the sisters are greedy. The three young ladies believe that they received the criticism because they are women, and had been men, they would not have got the same criticism.
That's a stretch believing that the criticism is because they are women. I don't think that if they were men, the criticism would be different. A man turning down Mark Cuban's offer would not appear smart.
Shark Tank fans were in disbelief because most would never imagine having a company that could go to the kind of money to cover a thirty million dollar offer. And, the business is not profitable.
As far as salaries, many people including most investors believe that taking a salary while building a company is wrong. There are other venture capitalists that think the entrepreneurs should have a salary, so they are worried about the business finances and not their finances. It is a matter of preference for the investors.
Will Coffee Meets Bagel become as big as Match.com? I doubt that, but I do know that Match.com and other dating sites produce low-quality connections with numerous scammers infiltrating people who are trying to match up.
The Coffee Meets Bagel app runs interference for both men and women, keeping their relationships legit. They don't need to be as big as Match.com to be successful because they have quality connections.