The toy company Toygaroo was dubbed “Netflix for toys” because parents could rent toys for a month and then return them for another. Nikki Pope was the face of the company.
It addressed the issue of parents purchasing toys that their children quickly outgrow. Kevin O’Leary and Mark Cuban bought a 35% share of Toygaroo for $200,000 from Pope in October 2011.
What is Toygaroo?
Toygaroo is a toy renting service. The toys were offered online and can be rented by parents. Toygaroo has been dubbed the “Netflix of toys.”
The result is that parents can give their children the trendiest and most expensive toys at a much lower price while also saving some space.
Parents can select a subscription plan that includes the number of toys they desire, and when their children grow bored with their toys, they can exchange them for new ones. Additionally, if the youngsters adore a certain toy, they might purchase it.
|Company Name||Online Toy Rental Service – Netflix For Toys|
|Investment Seeking||$100,000 For 10% Stake in Toygaroo|
|Final Deal||$200,000 For 35% Stake in Toygaroo|
|Shark||Kevin O’Leary and Mark Cuban|
|Episode||Season 2 and Episode 2|
|Status||Out of Business|
Who is the Founder of Toygaroo?
Toygaroo was started in 2010 by Nikki Pope, Hratch Hutch, and Rony Mirzaians. However, Nikki Pope served as the brand’s face, as she was the only person to appear on Shark Tank.
Toygaroo Before Shark Tank
Nikki Pope made her Shark Tank debut in season 2 with a cost-cutting proposal to assist parents in entertaining their children.
Nikki Pope resides in Los Angeles, California, and runs the business Toygaroo. Nikki Popo reveals that she has a huge family, thirteen nieces and nephews in total and that they, like any other child, adore playing with toys.
She refers to her nieces and nephews as “playtime pros,” but the issue is that the children rapidly become bored with the toys they own.
Nikki Pope said that this led her and her husband to start Toygaroo.
Toygaroo is an affordable solution for parents to tidy their homes and keep their children entertained by always having new toys available to them.
Nikki Pope claims that she and her husband do not yet have children, but they would want to. The Sharks embracing the Toygaroo concept will provide Nikki Pope and her husband with the financial security for a family of their own.
Her vision for her business is for Toygaroo to be used by every family with children who like playing with toys. She is truly hoping that the Sharks will fulfill her wish.
Shark Tank Pitch of Toygaroo
Nikki Popes made her Shark Tank debut in episode 202. She was seeking $100,000 in exchange for 10% stock. She dubbed the venture ‘Netflix for toys.’
She demonstrated how this service would be more easy and cost-effective than acquiring the toys directly. The sharks expressed skepticism over the offer.
They grilled Nikki on various topics, including how much money she intends to invest in inventories and how much money the family will spend annually.
Pope offers the Sharks $100,000 in exchange for a 10% stake in the ToyGaroo company. She describes her business plan as follows: parents register on the website and pay a monthly charge ranging from $35 to $89.
The family prepares a wish list of toys that are delivered to them on a predetermined schedule. When a youngster becomes dissatisfied with or outgrows a toy, it is returned in the given, pre-paid package.
Each toy is sanitized and sanitized again before being wrapped for cleanliness and distributed to the next family.
The Sharks are understandably suspicious, but Pope points out that her service costs roughly $500 per year, compared to the average family’s $1,200-1,400 annual toy budget.
The business she runs not only helps families lessen toy clutter but also saves them money.
Pope requires capital to expand her business. Through word of mouth, she has amassed a waiting list of over 1,000 families interested in joining the program.
Pope will be able to grow the business into a thriving enterprise with an investment. More than 500 families participated in her initial launch. However, will the Sharks take a bite out of her business concept, or will they discard this fish?
Kevin O’Leary believes Pope’s numbers overvalue the business. Still, he is willing to work with her on the numbers until he discovers that Pope owns only 10% of the business herself, with her husband and other partners controlling the remainder. For Daymond John, this is a deal-breaker. He has departed.
O’Leary proposes. He is willing to provide $100,000 in exchange for 35%. Robert Herjavec intervenes before she can accept. He invites Mark Cuban to join him. The two of them make an offer of $200,000 for 40%.
Barbara Corcoran says she plans to give far less in light of the new offer and has withdrawn. “Those toys are my friends,” O’Leary explains. I am a toy.”
Pope is at a crossroads. O’Leary’s expertise with toys, or the increased offer and two partners. O’Leary is conflicted. He is averse to offering a higher sum in exchange for the percentage.
Mark Cuban and Robert Herjavec tout their digital knowledge shamelessly. O’Leary offers to collaborate with Cuban on the $200,000 for 40% transaction, so excluding Herjavec. The Pope consents.
Mark Cuban and Kevin O’Leary made an offer following conversation. They partnered and offered Nikki $200,000 in exchange for 35% equity.
She agreed to the deal. As a result, Nikki came away with a $200,000 investment and two investors rather than $100,000.
Who are Investors of Toygaroo?
Mark Cuban and Kevin O’Leary offered the founders $250k in exchange for 35% ownership of the business following Nikki’s Shark Tank proposal. The business would be a partnership between Mark and Kevin, and their equity would be shared 35 percent.
However, the study found that individuals can purchase toys at a lower price in local stores due to various factors such as high shipping costs, high inventory costs, and subsequent studies.
The factors listed above caused the company to close its doors. This prevented Mark and Kevin from investing in the business.
How Does Toygaroo Make Money?
Toygaroo offered a variety of subscription levels. Their entry-level plan, dubbed the Joey Package, is $24.99 and includes four toys.
Additionally, they offered additional package varieties, such as six toy bundles and eight toy packages, ranging in price from $32.99 to $42.99. Nikki stated that the average household spends between $1200 and $1500 per year on toys.
This treatment will bring the price down to $500. Additionally, this service would assist in managing the storage and space in houses typically occupied by toys. If someone liked a particular toy and desired to retain it, they also had to purchase it.
The company intended to offer free shipping to all consumers. They acquired the first 500 consumers using word-of-mouth promotion at the cost of roughly $40 per toy.
What Happened To Toygaroo After Shark Tank?
Nikki Pope came on Shark Tank with the hopes of obtaining funding from one of the Sharks to expand her “toy-renting service.”
Before her appearance on Shark Tank, she conducted a soft launch to determine whether there was a market for this type of service.
The test was positive, which is why she desired to expand her business. She was particularly interested in Kevin O’Leary due to his knowledge of the toy sector.
Kevin O’Leary chose to boost his offer and work with Mark Cuban following a brief bidding battle with Robert Herjavec/Mark Cuban. Mark Cuban accepted, leaving Robert Herjavec behind. Nikki Pope accepted a joint offer of $250,000 in exchange for a 35% interest in Toygaroo.
Even though Mark Cuban and Kevin O’Leary invested in Nikki Pope, it appears that the company has ceased operations.
There were indicators of Toygaroo going bankrupt a few years ago, particularly after they posted a banner on their website declaring they couldn’t take on any new members due to their “explosive expansion.”
Additionally, after conducting some research, I discovered that the Toygaroo website domain name and brand name had been sold, indicating that the company has ceased operations. It’s terrible that businesses continue to fail, even when they secure funding from the Sharks.
Numerous issues remained unresolved. For instance, the company advertised free shipping, but each toy is unique in size and weight.
As a result, costs will vary from time to time. This also produced a cash flow issue. Another issue was that as the business grows, it would require additional inventory.
Tygaroo was featured on a variety of local stations and television shows following Shark Tank. Nikki has made appearances on ABC News, CNSC, Good Morning America, The Nate Berkus Show, and Saturday Night Live.
Although Mark and Kevin invested in this firm and Nikki acquired notoriety through her appearances on numerous television shows, Tygaroo quickly fell out of business owing to a lack of effective planning.
Why Did Toygaroo Fail?
Toygaroo’s creators got $250,000 investment through Shark Tank but failed to keep the company alive after a few months.
The primary reason behind this was because inventory costs and logistical costs were prohibitively expensive.
It’s for this reason that the company needs to invest in inventory and logistics. The company declared bankruptcy shortly after that.
The company filed for Chapter 7 bankruptcy protection in 2012. Chapter 7 of Title 11 is a Code section that regulates liquidation under the United States’ bankruptcy rules. The company’s website has been offline since 2012, and it was formally shuttered in 2016.
Did Toygaroo Get a Deal on Shark Tank?
Mark Cuban, Barbara Corcoran, Daymond John, Kevin O’Leary, and Robert Herjavec also appear in Nikki’s show. Kevin O’Leary instantly makes her a $100,000 offer for 35% of the company.
Barbara Corcoran asks Nikki if she has the right to sell the company, to which she replies that she can do whatever she wants with it. Barbara is dissatisfied with the deal and leaves.
Daymond John has a poor track record of dealing with people who are not in control of the company, and he exits.
Mark Cuban has partnered with Robert Herjavec on the deal, but Robert Herjavec likes it. The company’s CEO recommends that the sale be completed, offering her $200,000 for 40% of the business.
Nikki reacts by asking Mark and Robert whether they will agree to a bargain of $200,000 for 35%. Nikki accepts Kevin’s offer to complete the purchase at that price. Mark offers to divide the contract with Kevin, excluding Robert. Kevin turns to Mark. Mark agrees.