Adrian Zhang and Justine Tiu hope to stich up a deal for The Woobles, their DIY crochet animal kits, in Shark Tank episode 1402. The kits use the art of amigurumi, which is the creation of small crochet animals. The original idea came to Justine when she wanted to make a small crochet animal for a friend. It wasn’t easy, but she persevered and decided to make a business out of it.
The married couple both came from the corporate world. Adrian was a trader on Wall Street and Justine worked in education technology at Google. They were both dissatisfied with their corporate jobs, so they started The Woobles in 2020 and haven’t looked back. In just two years, they have over $5 million in sales! A Shark Tank producer approached them after reading about the couple in a magazine.
The Woobles come in a kit. The kits are designed for beginners. Each kit comes with their “easy peasy” yarn, a crochet hook, stuffing, eyes, access to online tutorials, email consultation, virtual office hours and more. Kits cost $30 and they have bundles with 2, 3 or 4 animals at varying prices. They have 6-9 “regular” animals and they drop limited edition Woobles periodically. The couple was initially reluctant to appear on Shark Tank, but they apparently got over that. They likely want a Shark to help them scale.
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The Woobles Shark Tank Recap
Adrian and Justine enter the Shark Tank seeking $250,000 for 5% of their business. They say they’re there to get the Sharks hooked – on crochet. They introduce some of their Woobles characters and explain how the business works. The Sharks examine their sample kits and explain their tutorial videos. Most of their customers are adults.
Each kit costs $3 landed. They wholesale for $15 and retail for $30. 90% of sales are direct to consumer. Justine explains her background at Google and how she learned to crochet and how it built her confidence. Adrian explains how he was a successful trader on Wall Street and he wanted to find his own definition of success. The crochet kits bring him joy because he realized it’s not too late to learn new things.
Two years ago, they started with $200 to buy yarn and build a website. Since then, they have $5.3 million in sales. The Sharks are impressed. Year to date (the segment taped in the summer of 2022), they have $3.1 million in sales and they’re projecting $7 million in sales for the year. They spend 20% of revenue on advertising. Customer acquisition is $16 and the average sale is $57. Margins are 86% gross and 32% net.
Why They Need the Money
Adrian and Justine want three things from the Sharks and their cash. They want help with licensing, wholesale sales and mentorship. Customers are asking for Disney and Marvel characters. Robert wants to know if they have non crochet products. Justine explains they could use their educational component for new products, but they’re focused on crochet for now.
Kevin likes the deal because they have cash flow. He thinks he can reduce their customer acquisition cost 8-10%. He also says he can help with licensing because he’s “been there, done that.” Kevin offers $250,000 for 10%. Adrian wants to hear other offers. Barbara jumps in and offers $300,000 for 10%. Lori says she loves it and offers $300,000 for 10%. She says she can do licensing and wholesale. Barbara offers $350,000 for 10%. Lori counters with $300,000 for 8%.
After a commercial break, Barbara says “wait a minute.” She offers $350,000 for 5% because she believe in them. Barbara brings Mark in at $350,000 for 6%. Lori and Robert team up to offer $450,000 for 6%. Adrian and Justine want Mark and Lori to team up with $450,000 for 6% and they do the deal with them.
Woobles Shark Tank Update
The Shark Tank Blog constantly provides updates and follow-ups about entrepreneurs who have appeared on the Shark Tank TV show. After the episode aired, there is no official evidence the deal with Mark and Lori closed. They sold a special ‘Tank’ the Shark Wooble Beginner Kit on show night and sold out. Proceeds from that kit will go towards Shark conservation organizations. The company issued a press release a week after airing stating they plan to use the investment make their online learning platform better, hire staff and pursue licensing.
It turns out the deal with Mark and Lori did not close. Mark told CharlotteInno he and Lori wanted to close it, but Tiu and Zhang nixed it. Cuban said “I think they got what they wanted from Shark Tank.” When the publication contacted the Woobles, a spokesperson told the reporter they won’t be “discussing the status of the deal at this time, but want to share that the team’s experience with Shark Tank, and all of the Sharks, has been supportive and fantastic.”
The company closed out 2022 with $7 million in revenue.
The Shark Tank Blog will follow-up on The Woobles & Adrian Zhang and Justine Tiu as more details become available.
