“The startup that turned down a $30 million offer from the principal investor on ABC Shark Tank, Mark Cuban, became recognized on television as the dating platform Coffee Meets Bagel (CMB).”
This year, Coffee Meets Bagel will be valued at $150 million, according to estimates. With such fierce market competition, this is a very high valuation.
The Founders’ Story
Sisters Dawoon, Arum, and Soo Kang came to the United States as youngsters from Korea. They had an excellent education in the United States.
While Soo and Arum attended Harvard, Stanford, and Parsons, respectively, Dawoon earned her degree from the Parsons School of Design.
When the three of them met up one day, they discussed the problems of meeting people online. Because of their findings, they determined that a dating app could benefit from more inventive methods of operation.
This is how Coffee Meets Bagel came to be. Despite having well-paying employment, the Kang siblings decided to leave them in order to pursue their business idea more aggressively.
Creating the Business
A group of ladies who wanted to build an online platform traveled to San Francisco, California, in order to obtain all of the necessary technological tools. Within a few months, CMB was fully created and ready to use.
The app was created in 2012 after receiving $600,000 in funding from Lightbank and a co-founder of Match.com. With a machine-learning system, it was able to distinguish itself from its competitors.
Users are presented with prospective pairings each day at 12 p.m. They were able to distinguish out from other dating apps like Bumble, Hinge, and Tinder because of their special approach.
As their user base and revenue rose at an astronomical rate, they saw a surge in success. As a result, the company was losing $1 million a year in cash flow, just like any other early startup. Thus, the company’s founders sought out angel investors.
Pitch on Shark Tank
To have a chance to pitch their company on Shark Tank, Dawoon, Arum, and Soo applied in 2015. For $500,000 on the show, they promised 5% equity in their company. At the time, the dating site was valued at $10 million.
A heated exchange ensued between the two of them and the Shark Tank panelists over the matter. It quickly rose to the status of one of the show’s most recognizable pitches.
Billionaire Mark Cuban, on the other hand, was fascinated, even though many of the Sharks thought the venture was too risky.
In the end, he proposed to pay $30 million for the entire CMB brand, which was the show’s greatest monetary offer to date.
But the sisters thought the offer was too low because CMB had the ability to compete with Match.com, which was producing $800 million per year at that time.
What Comes Next, Shark Tank?
Shark Tank was a catalyst for bringing in new investors for Coffee & Bagel after their appearance on the show. They acquired around $23.2 million in funding throughout the course of five rounds of investment. Atami Capital and DCM Ventures are their primary investors.
Unfortunately, they disclosed an assault on their site in 2019 that exposed the personal information of over 6.1 million individuals. By introducing a video virtual speed dating function in the following year, they gradually recovered.
As a business, CMB is failing and barely ranks in the top 20 of the most popular dating sites in the world. It is estimated that over 10 million people use their app, which is still available on Android and iOS devices.
Despite their lofty revenue goals, the sisters’ company is currently valued at $150 million, which is anticipated to fall in the future.
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