Kymera Goes Surfing in the Shark Tank
Sometimes in Shark Tank, the Sharks collectively miss out on making valuable deals. We have seen this with companies like Chef Big Shake, Coffee Meets Bagel or more famously, Ring Inc., which was acquired by Amazon for $1 billion. But very rarely in the Tank do we get the chance to see entrepreneurs return for a second chance at a deal. Episode 21 of Season 10 had Jason Woods and new business partner, Adam Majewski, return to the Tank to try and convince the Sharks to invest in their electric body board company, Kymera Body Boards.
Jason began the pitch by practicing some self-deprecation in the form of playing clips from his first attempt at getting an investment for Kymera 6 years ago. Back in Season 5 Episode 7 is when Jason first entered the Tank seeking $250,000 for 10% of Kymera Body Boards. Needless to say, it did not go well. In fact, the Sharks hated Jason’s pitch. Some iconic moments from his initial pitch include Mark Cuban calling Jason a ‘want-reprenuer’ and Daymond stating that this was ‘the worst pitch I’ve ever seen.’
Jason claims to have followed the Shark’s advice and found a partner to help him in running and scaling the business. Adam Majewski first discovered Kymera while watching Jason’s initial pitch on the Tank. He then called him while the episode was airing and said that he had the sales, marketing and distribution strategies figured out. The two finalized a deal within that week and spent the next couple of years refining the product and formulating a scalable business model.
After reminiscing on their past failure in the Tank, the guys at Kymera asked the Sharks for $250,000 for 5% stake in their company.
When Kymera first appeared on the Tank, Jason shared that he spent 10 years developing technology for an electric-powered surfboard looking device, otherwise known as the Kymera body board. Today, Kymera has perfected their technology and have streamlined it to fit into a new product line which includes a hybrid-electric kayak, electric jet surfboard, and their, now perfected, signature electric body board. With the lofty goal of setting the bar for ‘true electric water sport,’ the pair shares that they have ‘a backlog of orders, booming rental locations and rescue operations.’
Since Jason failed to get a deal his first time around, he shares that the company was able to raise money from several rounds of investors valuing the company at $7.5 million to date. While this got the Sharks’ attention, they were still skeptical and asked about the company’s economics and sales. The body board is the only finished, ready-to-sell product and costs around $3,500 to retail. It costs Kymera $1,800 to make resulting in sub-par margins from Kevin O’Leary’s perspective.
Kymera’s selling strategy includes Direct-to-Consumer (DTC) online as well as … dealerships of boat manufacturers where they recently signed a deal to appear in 225 locations starting at the end of July. Currently, the company has made $900,000 in the last 12 months and projects to finish the year at $2 million in sales. While this is reeling the Sharks in, Mr. Wonderful asks how much the company is going to profit on $2 million which is $600,000 before paying 17-20% to boat manufacturers.
Kymera seems to have improved their overall operations since its first appearance in the Tank, but the Sharks are not convinced yet. Kevin expresses his concern that the company is essentially going to break even after $2 million in sales and asks why they gave themselves a $5 million valuation. Jason responds by mentioning how much their technology has streamlined and its potential to scale. Daymond asks why the two need the Sharks and what they plan on using the investment for. Jason explains that Kymera’s biggest issue is with inventory in that every order is 3 months behind.
Kevin surprisingly is the first Shark to make an offer, but an unattractive one at best. He plans on investing the $250,000 for 5% in Kymera but is requiring that they give him $500 per unit until $750,000 is paid back.
Daymond joins in and offers the pair $250,000 for 10% of the company where he plans on focusing on the factory and licensing arm of their operations. Mark quickly interjects and says that Daymond’s offer is better than he would have made and goes out.
Lori mentions that she admires Jason’s drive and determination but that the company is not investable for her and joins Mark in going out.
Robert mentions that he really likes the product, but in order to sustain, the company needs to stop making other products and focus only on the body board or else they will burn through cash. With this, he also includes that he believes everyone deserves a second chance and solidifies his interest by offering $500,000 for 10%, the two accept without hesitation.
Though they achieved visibility in boat dealerships and have revamped their rental model, Kymera seems to be operating in a niche market. Although most people that go into boat dealerships are looking into buying (can you guess it?) a boat, personal watercrafts (PWC) like Kymera’s serve as a cheaper, more exciting alternative to the traditional options. The PWC area has been growing lately as a result of the desire for an exhilarating, different and cheap way to spend the summer season. Kymera’s product line fits into this due to its price point and the authentic experience it provides the user. Which leads us to believe that there is a whole in the water sports market that Kymera has the potential to fill.
The direction that Kymera takes with their selling strategy will be interesting to follow from here. Will they put some focus on e-commerce and grow their DTC sales? Can they thrive through continuing to sell in boat dealerships? Or is it possible that they license their electric motor technology to watercraft manufacturers? Nonetheless, Jason and Adam can have some faith as Robert Herjavec has their back with his experience in scaling similar company, Hamboards and oh yea, a half-million dollar investment.
In the case of Jason and Adam at Kymera Body Boards, redemption is the word of the day. Their initial failure serves as an example of how entrepreneurs can still find success in their businesses through resiliency and never giving up when someone tells you no.