Toygaroo is a toy subscription service that has been called the “Netflix of toys.” Nikki Pope pitched the product on Shark Tank and struck a deal with Mark Cuban and Kevin O’Leary, which was arguably one of the biggest flops in Shark Tank history. Toygaroo went bankrupt in 2013 and is valued at $0 as of 2024.
Founder
Nikki Pope is a Los Angeles-based businesswoman who grew up in a large family. She has 11 siblings and 13 nieces and nephews. Pope studied psychology at Sam Houston State University.
While only Nikki pitched her business on Shark Tank, she wasn’t the only founder. There were other co-founders, including Rony Mirzaians, Hutch Postik, Phil Smy, and Young Chu.
Founding of Toygaroo
The company was founded by Nikki and her experiences with her relatives. Children love new toys but quickly get bored with them. This is often a waste of money for parents.
That gave her the idea to create a subscription service where people could rent toys until their kids got tired of them. Then, they would return the toys and receive new ones. In 2010, she founded Toygaroo with a few co-founders.
It was a trial run with just 500 users paying $42 per month. Most of the early users loved it, and word of mouth led to over a thousand customers.
Shark Tank Appearance
As the face of the company, Nikki Pope got Toygaroo featured on networks such as CNN, ABC and CNBC. Six months after Toygaroo was founded, she appeared on the show’s second season, asking for $100,000 for a 10% stake.
The idea caught the attention of the Sharks. However, after discovering that the startup’s equity was not evenly distributed, some became hesitant. Nevertheless, Kevin O’Leary made the first offer.
Robert Herjavec stepped in and convinced Mark Cuban to offer $200,000 for a 40% stake. However, Mr. Fantastic later teamed up with Mark and offered $200,000 for a 35% stake. In the long run, Kevin unknowingly did Robert a big favor.
After Shark Tank
After Toygaroo’s Shark Tank appearance, the company’s website traffic skyrocketed. This seemed like a good thing, but it was actually the beginning of their downfall.
The rapid growth of customers created inventory and shipping cost issues. To meet demand, employees purchased individual toys from nearby stores rather than establishing wholesale deals. Without a scale structure in place, costs rose dramatically.
In the early stages, they focused on growth rather than toy acquisition. Also, toy companies did not like Toygaroo because they thought it was a competitor that would eat into their sales by offering rental services.
After the deal with Cuban and O’Leary was made, they hoped Kevin would introduce them to people in the toy industry. According to Phil Smyr, Mark Cuban was not involved but had an assistant who oversaw the business.
With costs soaring, Toygaroo turned to the two Sharks for funding to save the company. Cuban and O’Leary declined but offered to take over the company. Ultimately, the founders let the company fail and pursued other opportunities. Toygaroo filed for bankruptcy and officially closed in 2013.
Of all the founders of the startup, Smy appears to be the only active entrepreneur. He runs two websites: Zonmaster and LotteryCanada. Not much is known about Nikki Pope, who used to run a PR firm called The Prime Effect, but that company appears to have closed down.
Toygaroo has never had any problems attracting customers or media attention, and the exposure from Shark Tank came so quickly. If they hadn’t appeared on the show, things might have been different!
Categories: Shark Tank
Source: dut.edu.vn
