Mark Cuban, Kevin Hart invest in sea moss start-up
Mark Cuban and Kevin Hart have lived very different lives. But they’ve learned the same lesson: People like inspiring origin stories.
On Friday’s episode of ABC’s “Shark Tank,” the pair struck a $600,000 deal with a CEO named Alexiou Gibson, who runs a start-up fittingly named The Transformation Factory. Gibson’s company sells edible sea moss gel, which played a critical role during his personal journey to lose 300 pounds of weight.
Gibson said his weight-loss journey started early: At age 21, a doctor told him he “wouldn’t live to see 30.” The wake-up call made him become “obsessed” with health, dedicating himself to working out, eating vegan and researching ways to consume more nutrients. He discovered sea moss, which contains minerals like zinc and iodine.
The business might never have launched if Gibson, now 35, hadn’t shared his daily “sea moss lattes” on Instagram. But when users on the social media platform started reaching out to him, asking to sample sea moss themselves, Gibson saw opportunity.
He started a website in February 2021, took out ads to gain SEO traction and quickly brought in $3.5 million in revenue — including $1.4 million in profit — in just 11 months of business. Together, the numbers and backstory piqued Hart’s interest.
“I think a story behind the product makes a product that much better,” Hart, a guest Shark on the episode, said.
Gibson told the Sharks he wanted help getting his sea moss on shelves at major retailers, and asked for $500,000 in exchange for 5% of The Transformation Factory. Most of the Sharks were impressed by the company’s financials, but confused about how a $25 eight-ounce bottle could have so much appeal to consumers.
Hart explained to his fellow investors that sea moss was a growing trend among Black Americans, making it a “culturally driven product” — and Gibson’s company could tap into its retail potential. But he disagreed with Gibson’s valuation, counter-offering $500,000 for 20% of the start-up. Barbara Corcoran liked Hart’s proposal and offered to join in, splitting the money and equity evenly.
Kevin O’Leary made a somewhat surprising competing offer: $500,000 for 30% of the company. He explained that while the deal seemed financially worse for Gibson, the access to O’Leary’s portfolio and network — including multiple previous investments in the cooking and food industries — was worth the cost.
Gibson wasn’t interested. Instead, he focused on Hart and Corcoran, offering them 20% of The Transformation Factory’s equity for $800,000. Hart said he’d be willing to compromise at $600,000, but Corcoran dropped out, saying that getting the product into retail stories would require too much work.
That’s when Cuban, who is vegetarian and has invested in numerous vegan food companies, leaned over and told Hart, “I’ll do it with you.”
Encouraged by Hart’s understanding of the product and Cuban’s investment track record, Gibson accepted the deal. “Making a deal with Mark and Kevin is incredible, and growing my business with them is a dream come true,” he said.
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”