Mark Cuban Praises Coffee Company Pitch On Shark Tank, Argues Against Kevin O'Leary, But Did He Get A Deal?

Zinger Key Points
  • A battle between sharks on Shark Tank came from a coffee company.
  • While one shark questioned the valuation sought by an investor, Mark Cuban argued that the compelling backstory increased the value.

On Shark Tank, entrepreneurs battle it out for investments in their companies. The entrepreneurs seek a certain amount of capital for a certain amount of equity in the company, which shows a valuation for the company. Two Sharks battled over the valuation of a coffee company recently, reflecting how investors can value companies differently.

What Happened: Billionaire Mark Cuban has made many deals on Shark Tank, and also provided feedback to entrepreneurs he ultimately chose not to invest in. The billionaire recently called out a growing number of Shark Tank scams.

In a recent pitch on Shark Tank, a San Francisco coffee company called Kahawa 1893 was the subject of a potential investment from the Sharks.

Kahawa 1893 founder and CEO Margaret Nyamumbo joined Shark Tank to pitch an investment in her company.

The company sources coffee from African women who aren’t typically compensated for their time and labor, Nyamumbo told the Sharks, CNBC reported. The coffee bean bags have QR codes that allow customers the ability to tip the women as well, with Kahawa 1893 matching all tipped amounts.

Since 2017, the company and customers have given over $20,000 to the female farmers.

Nyamumbo is a third-generation coffee farmer from Kenya, who saw firsthand that male landowners were compensated more than the women who did the farming.

“90% of the labor in coffee comes from women, but so many are not compensated,” Nyamumbo told the Sharks of the African coffee market.

Nyamumbo attended Smith College in Massachusetts on scholarship, with her village helping to raise funds for her to buy her plane ticket. The entrepreneur later got an MBA from Harvard University and worked on Wall Street for Citigroup.

The company’s name comes from the Swahili word for coffee, and the year coffee was commercialized in Kenya.

Cuban called the company and concept a “brilliant idea.” The Shark praised the backstory of the company and how it could help with valuation.

Nyamumbo sought a stake of 5% in the company in exchange for $350,000, implying a valuation of $7 million.

Shark Kevin O’Leary said the valuation was out of line, with $2 million in revenue in the last year. Cuban was prompted to respond.

“You’re worth more,” Cuban said, interrupting O’Leary.

Related Link: Mark Cuban Sounds Alarm On ChatGPT

The Shark Battle: O’Leary dropped out of the race, but all the other Sharks, including Cuban made offers to Nyamumbo for the company.

Guest Shark Emma Grede offered $350,000 for 12.5% of the company. Grede is the CEO and co-founder of Good American, a denim company launched with Khloe Kardashian. Grede is also a founding partner of Skims, a shapewear company founded by her husband Jens Grede and Kim Kardashian.

Shark Robert Herjavec offered a joint investment with Grede, who would lead the deal, with an offer of $700,000 for 25% of the company.

Nyamumbo was excited about the potential of having two Sharks on the deal, but countered with an offer of $300,000 in cash and $400,000 in debt for 16% equity of the company, not wanting to give up 25%.

Cuban and Shark Lori Greiner both jumped into the mix, saying they would accept the new counteroffer from Nyamumbo.

This prompted Herjavec to ditch his joint offer with Grede and instead offer a simple $350,000 for 8% equity offer, similar to what Nyamumbo was originally seeking.

Grede, who admitted to not being a coffee drinker, matched Herjavec’s offer and shared her experience with Nyamumbo. Grede said her experience as a Black woman who has led companies could help Nyamumbo in her efforts.

Nyamumbo accepted the deal from Grede for $350,000 for 8% equity.

“This is just a dream come true for me, getting another Black woman supporting me and mentoring me. All the other women farmers that we work with -they’re going to be so excited.”

Read Next: Mark Cuban Needs Just A Fraction Of His Wealth: 'I'd Be Just As Happy With..'

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Posted In: NewsEmma GredeKevin O'LearyKhloe KardashianKim KardashianLori GreinerMark CubanRobert HerjavecShark TankSkims
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