CertifiKID Accepts $600,000 From Kevin O’Leary

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Jamie and Brian Ratner are parents and entrepreneurs. They recognized that other families, like theirs, are always looking for new experiences to make memories without breaking the bank so they created CertifiKID. This family-friendly platform provides amazing daily deals on experiences, services, and products for the whole family. From adventures to classes or camps, CertifiKID has hundreds of deals based around six major US cities: Washington DC, Baltimore, Chicago, LA, Philadelphia and Atlanta. Users simply sign up and begin receiving emails including daily deals.

CertifiKID came to the Shark Tank in hopes of securing a strategic partner to help them guide and grow the business, as well as to invest $600,000 to increase sales and marketing in exchange for 8% equity in their company. This would allow them to grow their sales team and subscriber base through customer acquisition. They currently have a valuable database of over a million subscribers. Of those subscribers, about half are consistently engaged with CertifiKID. The Sharks are impressed that their daily deal newsletters have a 10% open rate with a 14% click-through rate. The Sharks feel that in some ways, their email database may be more valuable than their actual company. Kevin O’Leary discusses selling data as there are a lot of opportunities in data mining.

Since the business launched in 2010, they have generated more than $30 million. In 2018, CertifiKIDS gross revenue was $5 million and their net income was projected to be $700,000. They are able to make money by receiving a percentage of each deal that is sold through their platform. Businesses are able to sign up with CertifiKID for free. The companies can determine what type of deal they would like to offer on their product or service. When customers purchase a voucher for those goods or services, a portion of that price goes back to CertifiKID. The voucher can then be redeemed. Another revenue stream that has been very lucrative for CertifiKID is paid advertising. Kevin asks Jamie if they have considered approaching the toy companies to sell their product using their platform in addition to this. She has not yet pursued that but was very interested in Kevin’s suggestion.

Although the Sharks are concerned about CertifiKID’s ability to continually refresh content to keep long term users engaged, three Sharks extend investment offers to Jamie and Brian. Daymond John offers $600,000 for 17.5% of the company with no contingencies. Barbara Corcoran believes that they are overlooking the potential to franchise this business. She offers CertifiKID $600,000 in exchange for 25% equity with a contingency that they would franchise the company to have a greater presence across the United States. Kevin O’Leary offers $600,000 for a 20% share in the company. This is contingent upon him making a 3x return upon exit. Brian counters and negotiates with Kevin which adds a lot of mutual respect to their dynamic. Eventually, they agree to a partnership with Kevin O’Leary for $600,000 in exchange for 19% equity with no contingencies.

Would you purchase vouchers from CertifiKID? What are your thoughts on Kevin’s partnership with Jamie and Brian? Do you think there is a greater potential for the company outside of product and service vouchers? Start the discussion in the comments below!

For a full summary of this episode, check out this article. Shark Tank airs on Sundays at 10:00 PM EST.