Toygaroo was a subscription service that lets parents rent toys for their kids. Dubbed “The Netflix of Toys,” it was a promising company pitched on Shark Tank by founder Nikki Pope. She bagged a deal with Mark Cuban and Kevin O’Leary, which is arguably one of the biggest failures in Shark Tank history. Toygaroo went bankrupt and is worth $0 as of 2023.
About the Founder
Nikki Pope is a businesswoman from Los Angeles, California, who was raised in a massive family. She has 11 siblings and 13 nephews and nieces. As for her education, she has a psychology degree from Sam Houston State University.
Though it was only Nikki who pitched the company on Shark Tank, she wasn’t the only founder. There were also other co-founders including Rony Mirzaians, Hutch Postik, Phil Smy, and Young Chu.
Founding the Company
The company started with Nikki and her experience with her relations. Kids always love new toys but quickly get tired of playing with them. It’s often a waste of money for parents.
This gave her the idea of making a subscription service that allows people to rent toys until their kids get tired of them. Then, they’ll return the toys and receive new ones. She worked with several co-founders to establish Toygaroo in 2010.
It was a soft launch that involved 500 subscribers that paid $42 per month. Most of the early users of their service loved it, and word of mouth attracted over a thousand more customers.
Shark Tank Appearance
As the face of the company, Nikki Pope got the company featured on networks like CNN, ABC, and CNBC. Six months after launching Toygaroo, she appeared on season two of the show, asking for $100,000 for 10% equity.
The idea captured the attention of the Sharks. However, some of them became reluctant after finding out the startup’s equity was not evenly distributed. Still, Kevin O’Leary made the first offer.
Robert Herjavec intervened and recruited Mark Cuban to offer $200,000 for 40%. However, Mr. Wonderful later teamed up with Mark and closed a deal of $200,000 for 35%. Kevin unknowingly did Robert a huge favor in the long run.
After Shark Tank
After Toygaroo’s Shark Tank episode aired, the company’s website traffic skyrocketed. It may seem like a good thing, but this was actually the start of their downfall.
The rapid increase in customers caused problems with inventory and shipping costs. To keep up with demand, employees purchased individual toys in nearby stores instead of setting up wholesale deals. Without a structure in place to scale the business, the costs spiraled.
In the early stages, they focused on growth over toy sourcing. Also, toy companies didn’t like Toygaroo because they viewed them as a competitor that depleted their sales by offering rentals.
After doing the deal with Cuban and O’Leary, they hoped Kevin would introduce them to people in the toy business. According to Phil Smy, Mark Cuban wasn’t involved but had an assistant monitoring the business.
As costs continued to spike, Toygaroo approached the two Sharks looking for money to save the company. Cuban and O’Leary refused but offered to take over the company. Ultimately the founders let it fail and moved on to other opportunities. Toygaroo filed for bankruptcy and was officially out of business in 2013
Out of all the startup’s founders, Smy seems to be the only active entrepreneur. He is running two websites: Zonmaster and LotteryCanada. Not much information is available on Nikki Pope, she was running a PR company called The Prime Effect but it appears to be out of business.
Toygaroo never had any issues attracting customers or media attention and the exposure from Shark Tank came too quickly. Maybe things could have turned out differently if they didn’t appear on the show!