The 'Stupid Idea' That Made Kevin O'Leary A Massive 20x Return: 'It Was Such A Crazy Pitch, I Bought It Anyway

Kevin O’Leary, known as “Mr. Wonderful” on “Shark Tank,” made a crazy good bet on a wild idea. What if someone pitched you a startup that does genetic testing for cats? Sounds like a head-scratcher. Well, O’Leary thought so too. But he went for it anyway, and it turned out to be one of his best decisions.

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In 2019, Basepaws, the cat DNA testing company, appeared on “Shark Tank.” Founder Anna Skaya was looking for $250,000 in exchange for 5% of her company. O’Leary and fellow shark Robert Herjavec both bit. They each threw in $125,000 for a 5% stake, valuing the whole company at $2.5 million.

Fast forward a few years, and O’Leary’s gamble paid off big time. On “The Daniel Mac Show,” he called Basepaws his biggest win percentage-wise from “Shark Tank.” He mentioned that he might have paid $50,000 for a 3.5% stake, which valued the company at just $1.4 million. But the real kicker? The company sold for a lot more than anyone expected.

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O’Leary had to keep the exact numbers under wraps due to a nondisclosure agreement. But he hinted that the deal was well over the publicly announced $50 million mark. Zoetis, a giant in animal health with an $80 billion market cap, scooped up Basepaws in the second quarter of 2022. Their earnings report showed they spent $93 million on acquisitions that quarter. Basepaws was the only named purchase.

Now, let's do some quick math. Even if Zoetis only paid $50 million for Basepaws, O’Leary could have made around $2.5 million if he had a 5% stake. That's roughly 20 times his money. But if the deal was closer to the $93 million Zoetis spent, he might have walked away with as much as $4.5 million. That would have turned his $50,000 investment into a 90x return.

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So why did Zoetis pay up? Basepaws was on a tear, expanding from just cat DNA tests to dog tests too. When Skaya first pitched to the sharks, the company had only done $200,000 in sales. But in the 18 months following the show, sales shot up to $3.5 million.

O’Leary gives a lot of credit to Skaya. "I invested in Anna for Anna," he said in a video, praising her knack for marketing and growing the business. She turned that little startup into a booming enterprise, and O’Leary's bet paid off in spades.

But Basepaws isn't the only time O’Leary struck gold on “Shark Tank.” His biggest dollar win? A meal-kit company called Plated, which Albertsons bought for about $300 million in 2017. O’Leary knows how to pick ‘em, even when the ideas seem a little out there.

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