Dating website Coffee Meets Bagel (CMB), owned by siblings Dawoon, Arum, and Soo Kang became infamous for turning down a $30 million offer from billionaire Mark Cuban. Luckily for the ladies, they were right to reject the deal. As of 2023, Coffee Meets Bagel is estimated to be worth $150 million. An impressive valuation given they operate in a competitive industry.
About the Founders
Dawoon, Arum, and Soo Kang are sisters who immigrated from Korea as teenagers. In the United States, they received a top-notch education. Soo went to Harvard University, Arum attended Stanford University, and Dawoon graduated from the Parsons School of Design.
One day, the three of them talked about the difficulties of meeting people through online dating. They concluded there were more innovative ways to run a dating app that could provide better matches.
This was how they came up with Coffee Meets Bagel. The Kang siblings already had well-paying jobs, but they all decided to quit to give their idea a better chance of succeeding.
Establishing the Company
The aspiring business women went to San Francisco, California, to get all the technical resources they needed to start an online platform. In less than a year, CMB was fully developed.
After raising $600,000 from Lightbank and a co-founder of Match.com, the app was officially launched in 2012. It stood out from its competition by curating users based on their Facebook data using a machine learning algorithm. Every day at noon, users are provided with potential matches. This unique approach helped them stand out in a crowded market.
They saw booming success as their user base and revenue grew rapidly. However, just like your typical early startup, the company struggled with cash flow and was losing a million dollars per year. Thus, its founders planned to get help from angel investors.
Pitch on Shark Tank
Dawoon, Arum, and Soo applied to pitch their business on Shark Tank, and they had their shot in 2015. On the show, they were seeking to raise $500,000 for a 5% equity stake in their company. This valued the dating site at $10 million at the time.
This led to a tense discussion between them and the Shark Tank cast. It became one of the most iconic pitches in the series. Although many of the Sharks viewed the investment as too risky, billionaire Mark Cuban was intrigued.
Eventually, he proposed buying the entire CMB brand for $30 million, which is considered to be the largest ever cash offer on Shark Tank. However, the sisters believed the offer was too low as CMB had the potential to compete against Match.com which was making $800 million per year at the time.
After Shark Tank
After their episode on Shark Tank, the Coffee Meets Bagel founders sought out other investors to raise money. With five investment rounds, they have raised over $23.2 million in funding. Their main investors are Atami Capital and DCM Ventures.
Unfortunately, in February 2019, they reported that their site was attacked, and over 6.1 million users had their data leaked. The following year, they slowly recovered by adding a video virtual speed dating feature.
In general, CMB is struggling to attract new users and compete with the likes of Hinge, Tinder and Bumble. Currently, CMB ranks within the top 15-20 most popular dating sites. The app is still available on Android and iOS and is estimated to have a user base of around 10 million people.
The sisters’ ambitious revenue targets haven’t hit the heights they forecasted but the company is valued at $150 million which is expected to decrease in the future.