Pair Eyewear
DEAL
EPISODE SUMMARY
🕓 Air Date: March 6, 2020
Asking For:
$400,000 for 10%
Investor:
Lori Greiner, Katrina Lake (50/50)
Deal:
$400,000 for 10% + $1.50/unit royalty until $400,000 is repaid
PRODUCT SUMMARY
Pair Eyewear offers the first-ever continually customizable glasses for kids, featuring patent-pending magnetic technology that allows them to easily swap fun, hip, and dynamic frame tops, making the eyewear experience exciting and affordable.
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Background Story
Pair Eyewear, founded by Nathan Kondamuri and Sophia Edelstein from New York City, emerged from Nathan’s childhood struggle of hating to wear glasses due to the lack of fun and fashionable options. The co-founders, both Stanford University undergraduates, conducted interviews with over 500 families, uncovering stories of kids breaking and losing glasses, creating a daily challenge for parents.
The vision for Pair Eyewear was to innovate the eyewear experience, giving kids the ability to personalize their glasses daily. The patent-pending magnetic technology allows kids to swap out different frame tops, providing a fresh, exciting look. Recognizing the common problem of kids disliking their frames, Pair Eyewear aimed to offer a solution that not only addressed the aesthetic aspect but also empowered kids in their daily choices.
The Product
Pair Eyewear introduces a revolutionary concept in the eyewear industry by offering continually customizable glasses for kids. The key feature is the patent-pending magnetic technology that enables kids to swap out the top part of their glasses, allowing for a variety of fun, hip, and dynamic frame tops. This customization aims to make the eyewear experience engaging and enjoyable for kids.
Priced at $95 for frames, plus lenses and doctor-recommended add-ons like anti-glare and scratch-resistant coatings, Pair Eyewear provides an affordable alternative to big-box retailers. Each add-on, including anti-glare coating, is sold for $24.95, with a production cost of $6, resulting in substantial profit margins of 70%.
The glasses are sold directly online, providing parents with a convenient and easy way to shop for their kids’ eyewear. With a focus on customer convenience, Pair Eyewear eliminates the need for parents to bring their kids to optical stores, allowing them to make purchases from the comfort of their homes using smartphones.
How It Went
The company’s position before Shark Tank
Pair Eyewear started with a bootstrap approach during the founders’ college years, raising $150,000 from family and friends for prototyping. After beta testing with 75 families, they raised $1 million from venture capital firms at a $4 million valuation. With $100,000 in sales within the last eight months, Pair Eyewear has strategically utilized a marketing spend of $50,000 to acquire customers. The company’s strategy involves selling directly online, differentiating itself from traditional optical stores.
Despite entering a market dominated by an Italian company with an 80% share, Pair Eyewear believes their focus on innovation and the kids’ segment sets them apart. In terms of funding, Pair Eyewear initially raised $1 million, with current fundraising efforts targeting $3 million, securing verbal commitments of $1.5 million at a $9 million pre-money valuation. The founders acknowledge the challenges of competing in a market with established players but emphasize the uniqueness of their offering and the potential for significant growth.
The Negotiations:
The pitch initially attracted interest from all Sharks, with three Sharks, Robert Herjavec, Kevin O’Leary, and Mark Cuban, opting out due to concerns about the competitive eyewear market and the company’s sales performance. The remaining two Sharks, Lori Greiner and Katrina Lake, recognized the potential of Pair Eyewear. After some discussion about the challenges of the eyewear industry, Pair Eyewear revealed their $100,000 in sales over the last eight months and $15,000 in sales the previous month.
The founders explained that a significant portion of their funds was spent on product development, operations, and legal aspects, leaving $150,000 in inventory. Lori and Katrina offered $400,000 for a 10% stake but proposed a $2 royalty per pair of glasses sold until they recouped their investment. The founders were initially hesitant about the royalty deal but eventually agreed to a $1.50 royalty per pair after negotiations, securing the deal, and expressing excitement about working with the experienced entrepreneurs.
