Although there are more cats in the US than dogs, the pet supply market for felines is underfunded according to Anna Skaya, owner of Basepaws. She is on a mission to level the playing field and allow cat owners to learn as much about their pets as dog owners. Basepaws offers the first at home genetics test for cats. This allows pet owners to learn more about their cat’s ancestry, health, and habits. By learning these factors, pet owners can make informed decisions about their cat’s health.
Anna is seeking $250,000 for a 5% equity share in Basepaws. With this investment, Basepaws is looking to expand beyond cat market to work with nutrition companies, breeders, and expand into DNA testing of other animals such as horses. Although there are competitors in the dog DNA market, their price is double that of Basepaws and their technology is out of date. If they expanded to the canine market, Basepaws would be the first test of it’s kind in that space as well. The Sharks are also interested in the DNA database that Basepaws has created. They feel that this is a very rich source of data and that it would be very valuable to companies in the pet market.
Because this is a hot market, they are first to market, and they have advanced technology, Basepaws is able to fund the rental of their own lab space in LA where they are able to run all of the DNA tests themselves. The process is simple and involves pet owners receiving an envelope in the mail, placing the pre-packaged tape on their cat’s fur and gently lifting it back off to get fur samples that will be sent back out for testing. The kit also comes with a swab for a DNA sample if you have a hairless cat.
Basepaws has been on the market for 10 months and has sold 2,500 packets, earning $200,000 in revenue. They are projecting to finish the year at $400,000 this year. The company has utilized $350,000 for start-up costs via a convertible note with a $3 million cap. This money was used to invest in their technology, IP, and R&D to launch. They are currently selling through their website and Instagram for $95 while their actual cost is $25 per unit.
Kevin O’Leary is the first Shark to offer Basepaws $250,000 for an 8.3% stake and 1.7% in advisory shares. Although the other Sharks decline to make an offer because they think that Kevin’s offer is very fair and they are concerned with scaling, Robert Herjavec decides he would like to invest as well because he loves the technology and can see broader application uses. Robert extends Basepaws the same offer as Kevin. Because Anna has other investors, she would like to keep a consistent investment and deal with the Sharks. Kevin and Robert decide to combine their efforts, talent, and money and together offer Basepaws $250,000 for 10% equity. Each Shark would make an investment of $125,000 for a 5% share. Anna accepts their offer and partners with Kevin O’Leary and Robert Herjavec.
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