Wine isn’t a drink that appeals to every millennial as some find its flavor too bland. Enter BeatBox Beverages, a line of wine products with unique tastes and packaging. It was featured on Shark Tank and the founders struck a deal with Mark Cuban. As of 2022, Beatbox Beverages is valued at $200 million.
About the Founders
There were three entrepreneurs who pitched on the show, but there were five people who co-founded the company: Jason Schieck, Brad Schultz, Aimy Steadman, Daniel Singer, and Justin Fenchel.
Justin Fenchel started as a financial analyst and later turned into a serial entrepreneur. He did an MBA at McCombs School of Business with Aimy, Jason and Dan. The odd man out is Brad Schultz, who has a bachelor’s degree in marketing.
Founding the Company
BeatBox Beverages was launched in November 2011 as an alcoholic wine product that tasted more like vodka and Gatorade. The flavors are uncommon, and the drinks are placed in creative stereo-shaped boxes.
The co-founders bootstrapped the business with $55,000 and borrowed an additional $100,000 to get the business going. Their drinks became a huge hit, and a year after starting, they made $200,000 in sales.
Shark Tank Appearance
The success they got was through self-distribution, but to scale the business they needed a strategic partner. In 2014, Justin, Brad, and Aimy appeared on season six of Shark Tank, seeking $200,000 for a 10% equity stake.
After making a strong start to the pitch, they handed out samples to the Sharks. Kevin O’Leary, who considers himself a wine connoisseur, said it tasted bad, but the others disagreed with him.
Still, Mr. Wonderful made an offer after Barbara Corcoran. Then, Mark Cuban said he was the best fit and deal and proposed $600,000 for 33%. The founders countered with the same equity but for $1 million, and was one of the biggest deals on the show at that time. Currently, it’s now the joint 10th largest-ever deal.
After Shark Tank
Four months after the episode aired, Beatbox Beverages did $440,000 in sales. The publicity from the show was a huge help and the company is continuing to grow exponentially. They are now available in over 40,000 retail locations including 7-11, Walmart, Kroger, Casey’s, and Circle K.
Beatbox has come a long way since Shark Tank. Revenue has grown from $1 million in 2017 to $18 million in 2021. The growth hasn’t slowed down, they are expecting to make $20 million in 2022 and co-founder Justin Fenchel is aiming to do $100 million by the end of next year.
Despite the impressive growth, the business lost money to scale the business. They lost $4.2 million in 2019 and $3 million in 2020 but became profitable in 2021. They’ve also raised $15 million at a $200 million valuation through crowdfunding and investors such as Rob Dyrdek, Louis The Child, and Party Favor.
As the business expanded its range of drinks it set up a new company called Future Proof LLC under which the BeatBox brand sits. Out of the five original co-founders, three remain. Daniel Sing left in 2013 and Jason Schieck left in 2021.
In an interview with Forbes, Mark Cuban rated Beatbox as one of his best Shark Tank deals along with Dude Wipes. On a cash basis, Mark hasn’t made a big return but his equity is worth significantly more.