‘Shark Tank’ founder landed $2.5M for unique wine glasses — but then came Kevin O’Leary’s surprising catch
With his sharp business acumen, Kevin O'Leary never leaves a chance to invest in profitable business ventures in 'Shark Tank.' Keeping up with the tradition, O'Leary once made one of the biggest deals of his career with this founder, but there is a catch that no one saw coming. Known for formulating complex deals, O'Leary once again played his cards, and no, it does not involve a royalty fee.
Andrew McMurray appeared on 'Shark Tank' with his brand Zipz, offering single-serve wine glasses and seeking $2.5 million for 10% equity. He described his company as focused on "packaging and licensing," which immediately caught O'Leary's attention. O'Leary then went on to praise McMurray during the pitch, saying, "You're a smart grasshopper," as per Market Realist.
McMurray showcased his Zipz, BPA-free single-serve wine glasses, which he described as strong. To demonstrate the sturdiness of the product, he mentioned that he can even stand on them without any damage. He then claimed that they lasted a year, which led O'Leary to ask about patents. McMurray went on to explain, "It was a French company that came up with the technology, and they were undergoing tests to determine the exact shelf life."
On the business side, McMurray shared that Zipz had earned $130,000 in licensing fees from big stores like Walmart and had already secured an $8.5 million investment, which was a figure that upset several Sharks. Mark Cuban, Daymond John, and Lori Greiner bowed out early, with Robert Herjavec following, leaving only O'Leary. Mr. Wonderful then revealed his ongoing Costco negotiations, noting he could leverage the same for Zipz. But he had a serious concern about pricing. "The majority of wine in America is sold for $9.95 a bottle. So while this packaging idea has so much merit in terms of its delivery, it fails on its pricing," he said.
He further added, "The average consumer can get five and a half glasses for $9.99 and $3.99 for a glass is the problem." Warning that Costco wasn't an easy win, O'Leary made a stunning offer of $2.5 million for 10%, but it was not without a twist. He said, "I demanded an option to buy another 10% at the same $25 million valuation if they successfully got into Costco. So, if you sell the company at some point for $50 million, I get to buy the 10% at the same $25 million valuation." McMurray ultimately accepted O'Leary's offer after a brief phone call with his investors.
Following his 'Shark Tank' appearance, Zipz successfully closed the investment with O'Leary. Notably, the Canadian businessman has remained actively involved in helping Zipz secure licensing deals for its unique packaging technology, as per Shark Tank Blog. Their progress and hurdles were further showcased in 'Beyond the Tank' episode 208, giving viewers a deeper look at the company's path. Although Zipz officially exited the wine-making business in 2016, they continue to operate by licensing their innovative packaging solutions to other beverage companies.
