Kreyol Essence, a skincare company, came to the Shark Tank in hopes of finding a Shark willing to invest $400,000 in exchange for a 10% equity share in their Miami-based company. Although there are a lot of skincare brands on the market, Kreyol Essence has a unique ingredient with an attached social element that gives their brand a deeper meeting. Their key ingredient is Haitian black castor oil, also called lwil maskriti, palma chrisiti or l’huile de ricin, which is packed with vitamins, minerals and fatty acids.
The seeds for the oil are grown in the Caribbean. Their growth and harvesting creates jobs for over 300 farmers and women producers living in poverty-stricken areas. After six months of harvesting, the seeds are pressed, roasted and simmered to perfection. Because the resulting oil yields 80-90% ricinoleic acid, it is able to provide deep and penetrating moistures to both skin and hair making it a very beneficial product to consumers. Due to the high concentration of ricinoleic acid, Kreyol Essence is particularly effective for consumers suffering from skin conditions such as eczema and psoriasis.
Although the company has been in operation since 2014, they changed their go-to-market strategy in 2017 to sell direct-to-consumer. In 2018 they did $1 million in sales and, at the time of filming, predicted to close 2019 at $2 million in sales. The Sharks were very interested to hear that Kreyol Essence had landed a contract with Ulta to sell their product which would be a major revenue source, however, they are concerned about how much effort would be needed to go into educating the market so they could understand the difference between Kreyol Essence and other competitive products. The company is profitable but does have approximately $300,000 in debt.
The Sharks are concerned that they do not have any clinical testing to back up some of their claims, such as their product it promotes hair growth. They feel that the product’s marketing is so dependent on their co-founders, Yve Momperousse and Stéphane Jean-Baptiste. The Sharks felt that they are what sells the product, the story, and the social cause. The marketing and education will be a major time and money drain for the Sharks. They are also concerned about how much competition is already in this space. Just when it looked like none of the Sharks were going to make them an offer, Kevin O’Leary came in with an offer of $400,00 for 37% of the company.
Clearly striking an emotional nerve with Yve and Stéphane, they explained to Kevin why they could not accept his offer and give up that much equity in their company. They have so much riding on the success of Kreyol Essence and feel tremendous pressure to continue to employ those in the Caribbean who are living in true poverty and need their wages to have a good life. They feel strongly that they need to keep majority control of the company to be able to continue to create a blueprint for poverty elimination through their business model. They countered with Kevin and eventually agreed to an investment of $400,000 in exchange for a royalty of $0.25 per unit sold and a 5% equity share in the company. Although they were really surprised to partner with Kevin, they are excited about what the future holds for their partnership.
What do you think about Kreyol Essence and Kevin O’Leary partnering together? Do you think Kevin is the best Shark to take their business into the future? If you were a Shark, would you have invested in their company? Start the conversation in the comments below!