Toygaroo: What Happened After Shark Tank? [Updated]

Looking for a hassle-free way to keep your kids entertained with new toys every month?

Enter Toygaroo, a subscription-based toy rental service that delivers toys right to your doorstep. The company founders pitched their business on Shark Tank with a plan to revolutionize the way parents and kids access toys. Learn more about the story behind Toygaroo, their innovative business model, and their experience on Shark Tank.

Toygaroo is a rental service for toys. The toys were available online and can be given to the parents on a rental basis. Toygaroo is also known as the Netflix of toys.

In this way, the parents will be able to provide the latest and most expensive toys to their kids for a much cheaper price and they will also be able to save some space in their house.

The parents could choose a subscription plan which includes a number of toys they want and when the children get bored with toys they could exchange the old toys for new ones. And if the children love a particular toy they could actually purchase it as well.

Toygaroo at a glance:

Rental service for toys.
Founder: Nikki Pope, Hratch Hutch, and Rony Mirzaians
Asked For $100,000 for 10% at a $1 million valuation on Shark Tank.

Received $200,000 for 35% from Mark Cuban and Kevin O’Leary.
Currently, Out of business

Index:

Who is the Founder of Toygaroo?

Nikki Pope, Hratch Hutch, and Rony Mirzaians founded Toygaroo in the year 2010. However, Nikki Pope was sort of a face for the brand as she was the only one who appeared on Shark Tank.

How was the Toygaroo Shark Tank pitch?

Nikki Popes appeared in episode 202 of Shark Tank. She was seeking $100,000 for 10% equity. She introduced the company as ‘Netflix for toys’. She explained how this service will be convenient and cheaper compared to actually purchasing the toys.

The sharks were skeptical about the offer. They asked Nikki a lot of questions like how much will you invest in inventories and how much the family will spend yearly.

After a discussion Mark Cuban and Kevin O’Leary made an offer. They both partnered up and offered Nikki $200,000 for 35% equity. She accepted the deal. So, instead of $100,000, Nikki walked out with a $200,000 investment and 2 investors.

What happened to Toygaroo after Shark Tank?

There were many problems that were unanswered. For example, the company was offering free shipping but each toy is of different size and weight. So, charges will be different every time. This also created a problem with cash flow. Another concern was, as the business grows it will need more inventory.

Tygaroo appeared on many local channels and TV shows after Shark Tank. Nikki appeared on ABC News, CNSC, Good Morning American, Nate Berkis Show, and Saturday Night Live.

Even though Mark and Kevin invested in this company and Nikki appeared in many TV shows and gained popularity, Tygaroo soon went out of business due to a lack of proper planning.

How does Toygaroo make money?

Toygaroo had many subscription plans. Their cheapest plan which was also known as Joey Package costs $24.99 which contains 4 toys. They also had other variations in the packages like 6 toy packages and 8 toy packages. Which cost between $32.99 to $42.99.

Nikki mentioned that a common household spends $1200 to $1500 yearly on toys. This service will reduce that cost to $500. This service would also help in managing the storage and space in homes which is usually taken by toys. If people like a particular toy and want to keep it, they also had an option where they could actually purchase it.

The company was planning to have a free shipping facility for all customers. They gained the first 500 customers via mouth-to-mouth promotion who were paying around $40 for the toys.

How much is Toygaroo worth?

Nikki was able to find investors for the company. She had managed to get a $250,000 investment. But after some time, they found out that inventory and logistic costs were too high and it was impossible for the company to run with given numbers. So, the founders had no choice but to close the company.

Investors of Toygaroo:

Mark Cuban and Kevin O’Leary

Due to Nikki’s Shark Tank pitch, Kevin O’Leary and Mark Cuban had offered the founders $250,000 in exchange for 35% of the company. Mark and Kevin were going to partner up for the deal and have a joined equity of 35%.

But due to many reasons like high shipping costs, high inventory costs and after some research, it turned out that people were able to buy toys at a cheaper price in local stores. Due to these reasons, the company went out of business. So Mark and Kevin could not invest in the company.

Competitors of Toygaroo:

Many local stores were selling toys for a cheaper piece. This affected Toygaroo’s business. It was obvious that people will purchase toys at a cheaper cost than renting them.

But one of the major competitors for Toygaroo is-

Pley is a company that provides lego sets on a rental basis. Its subscription is around $19.99 a month. Pley is like a Netflix for lego. Currently, its revenue is less than a million.

Is Toygaroo still in business?

After some time it turned out that the company will not be able to make a lot of profit as their inventory cost was increasing. And the company wanted to ship the toys to customers without charging extra shipping charges.

The toys were also available in local shops for a cheaper price, so it was natural that people will purchase the toys at a cheaper range than just renting them. Due to these reasons, the company went out of business. Toygaroo is no longer offering a toy renting service. Toygaroo became bankrupt.

Why does Toygaroo go out of business?

After Toygaroo’s appearance on Shark Tank, the founders had managed to raise $250,000 investment, but still, after some months the company went out of business.

The main reason behind it was inventory costs and logistical costs were too high. That is why the capital generated by the company had to be spent in order to maintain inventory and logistics. As a result, the company soon became bankrupt.

In 2012, the company filed Chapter 7. Chapter 7 of Title 11 is a Code that controls the process of liquidation under bankruptcy laws in the USA. Since 2012, the company website is inactive and it was officially closed in 2016.

Interesting facts:

Even though Nikki Pope, Hratch Hutch, and Rony Mirzaians founded the company together, Nikki was the face of the company as she was the only one who appeared in various TV shows including Shark Tank.
Nikki came to Shark Tank seeking a $100,000 investment but got double and the sharks partnered up to make the deal.
Toygaroo never made it to market even though they had previous 500 customers

Toygaroo went bankrupt soon after its appearance after the shark tank.

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