Goumi Before Shark Tank
Linsey Fuller and Lili Yeo were two people who worked in the fashion industry and wanted to do more. They started the company Goumi to produce clothing for children that would keep their hands safe and do more. A baby brings joy to an entire family with their presence but sometimes they can scratch themselves a bit too hard injuring themselves.
Babies scratching themselves is a serious problem and parents have to find a way to stop them from doing so. Cutting nails is one way but it is so time-consuming that working parents might not get time to do it. Linsey and Lili started Goumi to produce clothing that would prevent children from scratching themselves.
The Goumi line of products is essential, comfortable, and fashionable. The company had been in business for 8 years and it had started as a wholesale business but it was diversifying its portfolio to include retail sales.
The company needed more money to grow and a shark who would help them to diversify and so they applied to be on Shark Tank. They were invited to be on Shark Tank on the 17th episode of the 11th season.
Goumi On Shark Tank
The Goumi founders, Linsey Fuller and Lili Yeo, went to Shark Tank seeking $1,000,000 for 8% of their company giving it a valuation of 12,500,000. Their pitch started with them showing the sharks their products and how beneficial they would be to children. They then showed them some product samples. The sharks liked the products.
Lili said that more than one person had come to her saying that they had a similar idea years before but they had not acted on it. Daymond said that he had a child who had scratches and for quite some time he didn’t know why she had scratches on her legs.
Lili commented that it makes them sleep-deprived. Daymond then said that he didn’t know what to do because cutting the nails is not an option because they are so small. Lili agreed that it was a problem because cutting them was so exhausting.
Barbara then asked them what their background was. Lili said that she was from Portland and it made sense for her to work for Nike. She did this for 7 years. She then worked for Adidas. Linsey said that she used to sell zippers in the apparel industry. They said that they met in a Chinese preschool.
Daymond then asked them what its sales price and cost of manufacture were. Lili said that the bundle was sold for $102 and it cost $14 to make. The sharks thought that their profit margin was very impressive. The product was duty-free so when it landed it would cost $17-$18.
Daymond then asked them how they knew that $102 was their ideal point. He wanted to know if they had tried higher and lower prices. Lili said that they did and that they had been in business for about 8 years. She then said that in that year they were on track to sell their millionth unit.
Kevin then asked for some of her business numbers. He was told that the booties retailed at $18. The mittens retailed at $24 and the cost to make them was $4.50. Mark Cuban then asked if they were selling direct to consumers.
Lili said that they were selling through retailers when they started but they had been in business for 8 years and a lot of their business now was direct to consumers. The Goumi founders were asked what their total sales were and they said that they had lifetime sales of $5,200,000.
Lili then said that a few years back it was a very heavy wholesale business. Kevin then asked her what she expected her sales for that year to be. Lili said that they expected revenue of $2,500,000 that year. Kevin asked her what her profits would be and she said that she expected to have a 15% profitability rate but they had been profitable since their first year.
Kevin said that their valuation was a bit high. Lili agreed but she said that they had done a fundraising in 2018 and they were earning a revenue of $1,000,000 that year. They were valued at $5,000,000 when they did the fundraising. The sharks thought that they were still overvalued.
Lili added that they were growing the business and that they had a clear line of sight for a $5,000,000 revenue the following year. Kevin then asked them why sales weren’t more and he was told that it was a wholesale business. However, in the past 18 months, they had been in the wholesale business and got very good numbers.
Barbara then asked them what percentage of their sales were direct sales. Lili said that about 15 to 20% of their sales were wholesale. Mark Cuban wanted to know why they did not have more sales since they were in distribution. He then asked her if she was having a problem in any section of the business such as point of sales.
Lili explained that she did not have problems that any other business was not having. Lori stated that she was concerned about the price. Daymond then asked them where they did their price testing. Lili said that they did it online and what they saw on the display in the Shark Tank is really what was up.
Mark was not confident in the product because he didn’t think it was a guarantee that children would scratch themselves if they didn’t use the product. He thought that it was a problem that should have been solved first. Lili said that not everything was in the store yet. Many of the things that she had come with were prototypes. Mark Cuban thought that their marketing was not very good.
The Goumi founders thought that the problem was fixable but Mark Cuban thought that it wasn’t. Mark then told them that given their problems, their valuation was too high and so he left. Daymond and Kevin complained about the valuation. Daymond thought that it was very speculative.
Barbara then left. She thought that the business was overvalued. She also thought that they had a very high customer turnover rate and it was hard to do anything to remedy it. Daymond then offered $1,000,000 for a 30% stake.
Kevin said that Daymond’s valuation was fair he then offered them $1,000,000 as a line of credit at 9% interest for a 10% stake in the business. Lili then asked Daymond if he would consider $1,000,000 for a 15% stake at $6,700,000. Daymond declined their offer but his offer still stood.
Linsey and Lili then accepted Kevin’s offer. Lili said that people should not give up on their dreams because they are small.
Goumi Now In 2024 – The After Shark Tank Update
Business has been going on well for Goumi Kids since its deal on Shark Tank. The business has expanded its line of products and now also includes a line of clothes for adults. The clothing line includes robes and t-shirts, and the business is still selling wholesale but its retail line is now much bigger.
Goumi Kids has acquired a significant number of followers. On Instagram, it has 224,000 followers, on Facebook it has over 39,000 followers. On Pinterest, it has over 6,800 followers. As of its most recent valuation, Goumi was valued at $10,000,000.
The business has grown to be a major international franchise and has had a second round of funding. When not in the office, Yeo does a lot of charity work and has helped at least 85 women be free from human trafficking. The pair is going on with their successful trajectory without a hitch in the journey.