Phil Dumas brings his UNIKEY to episode 312 of the Shark Tank. With a background in electrical engineering and biotechnology, Dumas set out to take electronic keys to a new level of convenience and reliability. The result is his UNIKEY, a system that includes an electronically controlled lock which responds to a signal from a smart phone or special key-fob.
The technology was cutting-edge, and fit well with the growing interest in automation and integrated home security systems. Dumas has already managed to launch his product into the marketplace, but he needs a Shark deal to expand the company. Will the Sharks take a nibble of UNIKEY, or will Dumas find himself locked out in the cold?
UNIKEY Shark Tank Recap
Dumas enters the Tank seeking a $500,000 investment in return for a 33% stake in the company. He explains that the basic key has not evolved in over 1,000 years. He gives the Sharks a demonstration of the lock, simply touching the lock itself, while holding his phone within range of the lock.
He explains how users can restrict access, offering the options of sharing unrestricted keys, or keys that are only accessible during certain times of day, or for a limited period of time.
Dumas already owns a provisional patent, and he’s working on a deal with Black and Decker to license and distribute the product. He needs the investment in order to complete development.
The Sharks question his valuation and what the investment will include. Dumas explains that $500,000 is to develop the product and to get the patent protection in place. He recognizes that he’ll need $1.1 million to “reach profitability.”
Kevin O’Leary is impressed with Dumas’ background and hustle, but he’s uncertain about the “development risk” and the shaky housing market. O’Leary says he “Loves the story, but feels the risk. But I want a piece of it.” He’s willing to put in $100,000, but Dumas would have to raise the other $400,000 from the other Sharks, and he wants 10% himself, making the total investment worth 50%.
Robert Herjavec has a different deal. he’s willing to offer $1 million for 75% of the company, with the contingency riding on the Black and Decker contract.
Barbara Corcoran speaks up. She’s willing to offer $250,000 in exchange for 25%, if Dumas can get Mark Cuban to put up the other half.
Before Cuban can jump in, Daymond John makes an offer. $500,000 for 40%.
Mark Cuban dismisses Corcoran’s offer, but would be willing to join with O’Leary, offering to pitch in the other $400,000 for 45%.
The Sharks are in a feeding frenzy, outbidding one another and fighting over percentage points. Dumas makes a counter offer to Cuban and O’Leary, offering the 40%, plus two seats on the board.
Cuban and O’Leary accept the deal and Dumas leaves the Shark Tank with a deal.
UNIKEY Shark Tank Update
Although the Shark deal went through on television, subsequently, the deal fell through. Dumas was able to secure funding from another investor who put up more than the Sharks offered, for less equity. The due diligence process was long and arduous, but in the end, UNIKEY was able to expand into other markets. Today, the product is sold under license with KwikSet (licensed under the name Kevo) and other major lock manufacturers. The locks can be found in many venues, such as hotels and cruise lines, as well as in home security systems. Although UNIKEY had the Sharks taking bites of one another, Dumas was the one, in the end, who got the best deal.