Derek Pacque, Coatchex’s company founder and entrepreneur, earned his degree at Indiana University’s Kelley School of Business with a major in Management, Corporate Innovation, and Entrepreneurship.
In episode 402 of Shark Tank, he pitched his revolutionary, automated coat check system to the Sharks, including fellow alumnus Mark Cuban, and received positive feedback.
A simple face recognition algorithm is used to connect jackets with their owners.
Derek intends to franchise the system so that pubs and nightclubs that do not currently provide coat check services may quickly and inexpensively implement the Coatchex system, generating an extra cash stream for their establishments.
He received tens of thousands of dollars for a test he conducted during Super Bowl week in Indianapolis.
What Is CoatChex?
Coatchex is an electronic coat check system that allows users to check-in their items using their smartphones using Coatchex.
CoatChex is a ticketless coat checking system developed by Derek Pacque, a recent Indiana University graduate.
This software employs patent-protected line hacking technology and optical profiling to speed up and streamline the process of checking bags and jackets without requiring individuals to wait in long lines.
|Product / Business||Checking services without tickets|
|Investment Asking For||$200,000 for 10% equity in CoatChex|
|Final Deal||No Deal|
|Episode||Season 4 Episode 1|
|Business Status||In Business|
Who Is The Founder Of CoatChex?
Derek Pacque is the founder of CoatChex. Derek Pacque made the trip from McLean, Virginia.
He ultimately decided to receive his education at the Indiana University Kelley School of Business, graduating with a Bachelor of Science in business administration.
Derek is a senior at a four-year college who is also the founder of Coatchex. After graduating from college, Derek went to New York and is currently employed by Coatchex, where he also serves as the CEO of Chexology, among other things.
Derek Pacque, a senior at Indiana University, found it cumbersome to lug his winter coat around when he visited bars and restaurants.
Whenever possible, he attempted to develop a creative solution to this problem.
He came up with modernizing an old-fashioned concept such as coat checking.
Derek changed the ticketing system into a secure, ticket-free one after it had become a hassle due to misplaced tickets and stolen coats.
Derek was in severe need of support and someone who had faith in his abilities. Coatchex was formed due to a collaboration between him and a previous university professor.
CoatChex Before Shark Tank
Derek Pacque came up with Coatchex after his expensive jacket was stolen from a local pub in his college town of Bloomington, Indiana.
He attended Indiana University, where Mark Cuban was a student and teacher during his undergraduate career.
Those neighborhood taverns and clubs frequently did not even provide regular coat checks, leaving clients freezing on the way in or risking having their jackets stolen or lost.
Derek formed Hoosier Coat Check LLC as a side business in some local bars. Even though it was a ticketed system, it satisfied a demand that most of the eateries in the area were not met.
The Coatchex system was developed due to Derek’s decision to streamline the process to make it more efficient and convenient.
His college professor served as a mentor to him and invested in the business.
Derek applied to and was accepted into Shark Tank even though he has never used his new method.
Was this a wise choice? What would happen to Derek if the Sharks ate him alive? Or was he just getting started?
How Was The Shark Tank Pitch Of CoatChex?
Derek came to Shark Tank seeking an investment of $200,000 in exchange for 10% interest in Coatchex.
He created Chexology before creating his original company’s other brand, Chexology.
When individuals visit venues, they face a quandary. Coat check tickets are at risk of being lost if their jackets are not maintained. Venue operators dislike coat checks because they are inconvenient to operate.
Coatchex resolves various issues and establishes new revenue streams for venues.
The app has a credit card that simplifies money management, generating revenue by charging for services.
Property owners can immediately add pictures of themselves and their property, significantly decreasing theft/loss.
Marketing departments will adore Coatchex’s data collection capabilities.
Derek enters Shark Tank without any sales and plans to make money by selling franchise opportunities without establishing feasibility and reliability.
Mark Cuban declares his system to be a terrible idea without testing it.
Daymond By requesting this much money, John brandishes Derek Paque as a thief. He claims to have invented valet services, dry cleaning, luggage claims, and coat checking in his patent.
Daymond claims he is withdrawing because he is aware of rivals in this field and believes Derek lacks market understanding.
It seemed as if Daymond was on the prowl for Derek after having rubbed him the wrong way. It would be fascinating to learn more about Daymond’s aversion to Derek and Coatchex.
Kevin O’Leary dislikes seasonal enterprises and has opted out. Barbara Corcoran believes the process is too demanding, and Derek reacts by informing her that you will check in and out using your iPhone App. Barbara is no longer a part of the deal.
He believes there is an opportunity for institutions, according to Robert Herjavec of Shark Tank.
He takes issue with the $2 million valuations. Derek indicates that he will haggle over the price of Coatchex.
Mark Cuban supports the concept, but Derek will have to make difficult choices. He’s looking to see if you’re willing to make the difficult choices. He indicates that he will and that he is eager to listen.
Robert Herjavec requests that Derek make a revised offer, and Derek agrees to a $1.5 million valuation, at which point Robert withdraws.
Mark Cuban is the final remaining Shark Tank investor. Mark believes they should take a step back because he lacks experience.
He needs to develop a track record through a variety of sites. Mark makes a $200,000 bid for a 33% stake in the company. Daymond believes Mark is insane.
Derek needs to speak with his business partner, so he calls his professor, who believes he is giving up too much stake this early in the game. His professor stated that he would pass; thus, refrain from doing so.
Derek returns, stating that you are correct; I entered too early. He believes he should continue developing it. He has declined Mark Cuban’s offer.
Derek counters with $200,000 for a 20% stake, to which Mark Cuban declines. Derek exits without securing an agreement with Mark Cuban.
What Happened To CoatChex After Shark Tank?
What did CoatChex do without Mark Cuban’s advice and funding? The show’s exposure alone has boosted the company’s earnings and sales.
Additionally, it presented some intriguing chances. Life in Color, an event representing a cross between the Color Run and a music festival, selected the artists.
CoatChex supplied 7,000 stations for participants to wash and store spare clothing, including coats.
The festival-goers were drenched in sweat and painted with paint, which was extremely useful. Furthermore, CoatChex has been signed for New York Fashion Week 2013.
Derek Pacque’s business approach has shifted dramatically since his appearance on Shark Tank.
CoatChex stations are sponsored by brands instead of charging clients. All parties benefit from this arrangement.
CoatChex is still compensated, the service is free for clients, and brands receive valuable marketing data. CoatChex appears to be gaining traction.
CoatChex Shark Tank Update
Derek Pacque will be remembered for his decision to turn down Mark Cuban. That will almost certainly benefit his business in the future.
CoatChex has been expanding moderately, with a new site set to launch in Chicago this winter. Coatchex is also negotiating deals in New York City and Washington, D.C.
The company changed its name to Chexology. They now inspect a variety of items in addition to coats.
They currently provide services and kiosks at various other types of events, not only nightclubs.
The clients include American Express, Nike, Barclays Center, House of Blues, Live Nation, and the Museum of Modern Art.
All communications will be conducted via SMS, and they will remind attendees not to forget their belongings.
Derek decided not to sell a third of their company, which has an annual revenue of $7 million as of April 2022.
Is CoatChex Still In Business?
CoatChex, now known as Chexology, has added the Museum of Modern Art (MoMA), Live Nation, AMEX, Nike, and the Barclays Center to its list of corporate clients since its appearance on Shark Tank.
Pacque revealed in 2016 that CoatChex earned more revenue from checking in coats at New York’s Mercedes-Benz Fashion Week than it made in its first year.
Coatchex is still in business with the new name Chexology as of April 2022.