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Urban Float, a Seattle based organization owned and operated by Joe Beaudry & Scott Swerland, has aspirations of planting their spas across the nation to bring Americans peaceful, weightless, hydrotherapy. Their float pods are filled with 200 gallons of water and 1200 pounds of Epsom epsom salt which creates the weightlessness that users experience when floating. Each pod can be adjusted to the user’s sensory needs and music and lighting can be added and adjusted on demand. The sensation of floating in a sensory controlled environment is very relaxing, good for the mind and the body, and leaves patrons feeling focused, energized and relieved from physical pain.
Because they are seeing incredible success, Urban Float is looking for a partner who is willing to invest $500,000 for a 5% share in their company. This would allow them to open additional spas across the United States. A single float costs consumers $45 and a monthly membership fee including unlimited floats is $150. They currently have $600,000 in cash flow and $1 million in small business debt which concerns the Sharks. They have four corporate stores and they offer franchising opportunities. In order to open multiple locations, they raised $300,000 and utilized another million of profits from their first location. On average, it costs Urban Float about $500-600 to open a store including the equipment. Each spa is equipped with 6 beds and front office.
The Sharks are concerned that the float pod technology that Urban Float utilizes is not proprietary to them and that anyone could buy it and undermine their business. They are also concerned about the amount of debt that they currently have. Mark Cuban also addresses the fact that fads like this come and go. They are asking for a lot of money that they may not be able to recoup. There are two Sharks who are interested in investing in Urban Float, despite their debt and lack of proprietary technology.
I’m 100% about taking care of yourself but I need some proof of concept here. #SharkTank
— Daymond John (@TheSharkDaymond) March 18, 2019
Kevin O’Leary offers Joe and Scott $100,000 and $400,000 as a loan at 9.5% interest for 36 months in exchange for a 15% stake. He likes the cash flow but has to address the risk of their debt. Matt Higgins also makes them an offer for $500,000 for 15% of the business. He feels that he can help with getting the buy-in of sports teams for rehabilitation use and can also help them scale a lot faster than they would on their own. They begin to counter with both Kevin and Matt while Matt grows increasingly frustrated that they are thinking too small and focusing on debt instead of the opportunities that he could bring to their business. They agree to partner with Matt for an amended offer of $500,000 in exchange for 12.5% equity.
A deal has surfaced for @mhiggins on #SharkTank pic.twitter.com/FmOQEPS7LG
— Shark Tank (@ABCSharkTank) March 18, 2019
Sorry, @KevinOLearyTV, but @UrbanFloat decided to swim with the #GuestShark rather than take a bath with Mr. Wonderful. #SharkTank @ABCSharkTank #SharkMatt pic.twitter.com/Am7ixYK9g3
— Matt Higgins (@mhiggins) March 18, 2019
What do you think about Urban Float’s partnership with Matt Higgins? Do you think they made the right Shark selection? Would you utilize their service? Start the conversation in the comments below!
For a full summary of this episode, check out this article. Shark Tank airs on Sundays at 9:00 PM EST.