Our TV screens are riddled with numerous reality shows promising one thing or the other. Many have come to doubt the veracity of these promises but if there is one show which seems to be living up to its word, it is Shark Tank. Billed as a business reality show which helps upcoming entrepreneurs gain funding for their nascent business ideas, Shark Tank has grown so popular that even appearing on the show, without getting any funding therefrom, is enough to fuel the growth of an enterprise.
Take for instance the case of Coffee Meets Bagel. The dating app was founded by three sisters in 2012 and by 2015, was featured on Shark Tank. The company received a huge buyout offer on the show but its owners courageously rejected same. This fetched them much scorn but they remained unfazed and today, their app is one of the most popular dating apps in the world. Today, Coffee Meets Bagel now has a whopping net worth of about $150 million (Estimated Valuation). It has millions of subscribers and the three sisters are well on their way to transforming their vision into a billion-dollar enterprise.
Coffee Meets Bagel Was Started With a Seed Money of Just $600k
Coffee Meets Bagel’s net worth may now run into tens of millions of dollars but it was commenced with just a little seed money of about $600k. Back in 2012, one of the co-founders, Dawoon Kang, was working as an investor with J.P. Morgan in Hong Kong. Kang had been in this role for several years and had noticed that young professionals like her had little or no time for dating. She also noticed that the situation was especially precarious for women and so recruited her two sisters, Ahreum (CEO) and Soo (head of design) to carry out further exploration into that area.
Their studies revealed that men and women had different approaches to dating and that most dating apps catered to the needs of men. They, therefore, decided to come up with an app that would do the opposite and this was how Coffee Meets Bagel came to be in April 2012. The app utilizes an algorithm that analyses factors, such as member’s age, education level, religious and ethnic preferences as well as interest, to deliver one perfect match to a member each day. Members have 24 hours to like or pass on what they see and if there is a mutual likeness, they get a 7-day window to communicate.
Coffee Meets Bagel rolled out its first version in New York in April 2012 and a few weeks later, added Boston to the line-up. The service experienced significant success, 100,000 introductions and 6,000 actual connections between members, and this motivated the sisters to embark on their seed funding drive in September 2012. They were able to raise $600K with the two major investors being Lightbank (venture capital specialists) and Peng T. Ong (co-founder of the popular dating app – Match.com).
The Co-Founders of Coffee Meets Bagel Famously Turned Down a $30 Million Offer When They Appeared On Shark Tank
Having witnessed a $600k infusion to its net worth, Coffee Meets Bagel’s founders deployed the funds to expand their reach to several other American cities including San Francisco. The popularity of their app grew in leaps and bounds and just three years later, they were selected to pitch their product to the Shark Tank team for possible investments. The sisters did their pitch with the hopes of exchanging a 5% ownership stake in their company for about $500K. Unfortunately for them, none of the investors wanted to bite.
Even though the investors praised their revenue and fundraising efforts, they were put off by their high spending as well as the fact that they wouldn’t reveal the exact number of subscribers that they had. One of the key investors, Mark Cuban, however, made a hypothetical offer to the sisters to purchase their company for a whopping $30 million. This was the highest-ever offer made in the show’s history but the sisters turned this down.
This was due to their belief that they can midwife their idea into a billion-dollar business much like Match.com which made $800 million in one calendar year. As can be expected, the sisters’ decision fetched them abuses with many describing them as stupid, crazy, and even greedy. They however stuck to their guns and sought other sources of funding to grow their cherished company.
The Company Has Been Able To Raise $23.2 Million From Several Funding Rounds.
Since that initial seed fund drive of $600k, Coffee Meets Bagel’s net worth has witnessed an extra infusion of tens of millions of dollars. The company’s second seed round came on the 19th of August 2013 and they did not raise any capital from it. They refused to be discouraged though and by the 27th of May 2014, embarked on their venture round fundraising. This was quite successful as they managed to raise $2.8 million from one investor.
Coffee Meets Bagel’s 4th fundraising drive came on the 18th of February 2015 and raised about $7.8 million from six investors. Their latest funding round, tagged as series B, was held on the 30th of May 2018 with the drive raising $12 million from six investors as well. To date, the dating app has raised a total of $23.2 million and these funds have been dedicated to hiring staff as well as additional developers and engineers.
Synopsis of Coffee Meets Bagel Funding Rounds
Date – 26th of September 2012
Money raised – $600k
Investors – four (Sandy Cass, Lightbank, Quest Venture Partners, and Azure Capital Partners)
Date – 19th of August 2013
Money raised – None
Investors – N/A
Date – 27th of May 2014
Money raised – $2.8 Million
Investors – 1 (Sandy Cass)
Date – 18th of February 2015
Money raised – $7.8 million
Investors – six (WI Harper Group, Sandy Cass, Quest Venture, Lightbank, DCM Ventures, and Azure Capital Partners)
Date – 30th of May 2018
Money raised – $12 million
Investors – six (Atami Capital, DCM Ventures, Gingerbread Capital, Quest Venture Partners, Sandy Cass, and WI Harper Group).
Coffee Meets Bagel Now has Three Million Subscribers and is Valued at over $100 Million.
When Kang and her sisters turned down the $30 million offer from Mark Cuban, many people derided them for refusing such a sumptuous offer. The sisters refused to be swayed by sentiments though and remained resolute in their vision to build their company into something bigger i.e. a billion-dollar empire. The sisters may not have achieved that dream to date but they have made impressive strides in that regard.
From one city in April 2012, Coffee Meets Bagel can now be found in all 50 American states. It has also gone international and can be used in countries all over the globe. Coffee Meets Bagel now has about three million subscribers and has successfully arranged one million dates. It is regularly included amongst the best dating apps in the world with reviewers praising it for its emphasis on quality as well as woman-centric nature.
In terms of net worth, Coffee Meets Bagel is also not doing badly at all. The company made about $87,000 in 2013 and by 2014, the amount had reached $1 million. For 2015, it was an estimated $10 million and by 2018, its gross revenue rose to $25 million with a valuation of $82 million. Coffee Meets Bagel’s net worth is now estimated between about $150 million. The company makes its money from ads and in-app purchases. There are also subscription fees paid by users which range from $14.99 to $34.99 per month.