Saavy Naturals caught the eye of Americans when founders Hugo and Debra Saavedra presented their edible soap on Shark Tank.
But what is the story behind the company and what is its net worth?
Who are Saavy Naturals founders Hugo and Debra Saavedra?
Husband and wife Hugo and Debra Saavedra were a former restauranteur and personal chef who decided to start their own soap company.
Both fans of using natural ingredients, when they were working in cooking they always incorporated herbs and edible flowers into their food and decided to do the same with soap.
They initially built up a $10 million company in the sector but ended up losing control.
“We brought in investors and we sold a majority interest in that company,” Debra Saavedra explained.
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They gave away the shares in a bid to gain more cash. “We were not savvy then,” admitted Hugo.
So, off the back of their success with their first company, they set up a second: Saavy Naturals.
What is Saavy Naturals?
Saavy Naturals is a soap company that produces products that are vegan, gluten-free, soy-free, and sourced solely from natural ingredients.
Founders Hugo and Debra Saavedra set up the company in 2014 and used food-grade ingredients for their soap, meaning that it was technically all edible.
After huge initial success in their first year thanks to the contacts they had already made from their previous company, the couple decided they needed more investment and applied to appear on Shark Tank.
Saavy Naturals on Shark Tank
Hugo and Debra Saavedra appeared on US investment show Shark Tank in 2015.
They entered the show pitching for a $200,000 for 10 per cent of their Saavy Naturals company.
“Our philosophy is that if you are about what you put in your body, you should also care about what you put on your body,” Debra said as she explained their product.
The Sharks were impressed with the product.
Barbara Corcoran even tried eating some of the soap, joking afterwards: “It’s not bad. It tastes like perfume and sugar.”
After impressing on the product itself, the Sharks delved into the financials of the company.
Hugo and Debra Saavedra explained Saavy Naturals was already doing £750,000 in sales through wholesale retail. However, they were making making a 30-40 per cent margin on sales.
“We’re buying in such limited quantities,” explained Debra as she outlined they didn’t have the money to purchase a higher inventory.
They outlined that they had put in approximately $350,000 into their company other own money and had borrowed $400,000 from close friends and family.
The figures concerned the Sharks. Kevin O’Leary suggested that the sums didn’t add up to the valuation of their company.
He said that the $200,000 for 10 per cent suggested that the owners thought the company was worth £2 million but that their revenue figures suggested it was far less.
“You want me to pay a 25 multiple on soap. You must be kidding,” he told the entrepreneurs.
“I can give you 100 per cent certainty no shark is going to give you $200,000 for 10 per cent. If they were to do that, they wouldn’t be a Shark, they’d be bankrupt.”
O’Leary was wrong. Corcoran made an initial opening offer of $200,000 for a 50 per cent share of the company, saying that she agreed that the Saavedras had over-valued Saavy Naturals.
Debra said that she was unwilling to repeat the mistakes of their previous company and wanted to retain a majority share.
At this point, Robert Herjavec offered to give the couple the money they wanted in return for 45 per cent.
Corcoran counted. She offered them $100,000 for a 40 per cent share of the company as well as an additional $100,000 for purchase orders.
Hugo and Debra accepted. However, despite the on-screen deal, the agreement fell apart in the post-production legal phases. The Saavedras walked away without any investment from the Sharks.
What is Saavy Naturals’ net worth?
Saavy Naturals’ was given a net worth of $0 when it appeared on Shark Tank in 2015 with its debt wiping out its revenue.
However, the company now has an annual revenue of $3.9 million and is thought to have a net worth of $1.2 million.