Rosy Khalife and Donna Khalife make and ship boxes of fun activities to kids whose parents subscribe to their monthly surprise box service. Will their company earn a deal on
Shark Tank Surprise Ride Update
- Entrepreneurs: Rosy and Donna Khalife
- Business: Childrens’ book and activity subscription
- Ask: $110,000 in exchange for 10%
- Result: No deal
- Sharks: None
Sisters Rosy and Donna came up with an idea to help kids put away their screens and immerse themselves in fun learning activities. The two put together carefully curated collections of books and interactive kits, pack each collection in a box, and mail the boxes to monthly subscribers.
The women charge $24.99-$29.99 per box depending on the type of subscription. They’ve shipped over 800 boxes and have had over 220 active subscribers within the four months prior to their appearance. They have a profit margin of 50%, and work with a fulfillment center which assembles and ships the boxes.
Donna told the sharks that Surprise Ride had already raised $100,000 from an angel investor, Irwin Jacobs, the founder of Qualcomm. They needed the additional $110,000 from the sharks to fund their next twelve months of operations. Daymond John asked why they needed to come to the sharks for money, rather than ask more from their angel investor, but the women never really responded.
Donna explained that Surprise Ride had contracted with a marketing firm that was good at converting moms into customers, in the hopes that it would significantly boost their numbers. They were going to draw this money from the angel investor’s funding. It would cost $40,000 for 12 months to reach 5-10 million moms. They would then use the other $60,000 to monetize the web traffic that came from the marketing firm.
The sharks then began to question the $1.1 million valuation of the business, given their just-starting-out numbers. Daymond felt it was too early for them to value the company that high, and he was out. Kevin O’Leary thought it would take millions of dollars more than the women had to be able to scale the business at a sustainable level, so he was out.
Robert Herjavec liked the idea, but he wasn’t sure their decision to spend $40,000 on internet marketing was the most effective use of money. However, he had an offer for them of $110,000 in exchange for 25%. The women asked if there were any other offers from the remaining sharks. Lori Greiner was out, saying, as she often does, that she loved the service, but she had made it on her own as a woman, and they could, too.
Mark was the next shark out, faulting the decisions to spend so much on marketing and monetization of web traffic. The sisters then turned their attention back to Robert, and asked him if he would be willing to take 20% equity rather than the 25% he initially offered. By that time, it was too late, and Robert had changed his mind. He pulled his offer altogether, and Surprise Ride shipped out without a deal.
What happened next for their company? Keep reading our Surprise Ride update to find out!
We have good news to report for our Surprise Ride update. The company’s sales took off after their episode aired. Then, in 2016, Kevin called the sisters and offered them $50,000 in exchange for 6% royalty until he made $150,000, and 2.5% equity. The women accepted, and with Kevin’s help, they were able to get their kits into Michael’s crafts store chain.
In 2018, Fat Brain Toys, an online retailer popular for their unique and challenging toys and games, acquired Surprise Ride. Subscription boxes are also available on the Surprise Ride website.
Would you like to learn about the other companies featured on Season 5 Episode 9? Follow the links below for our other company updates from the episode.
For even more on companies and products, be sure to stop by our Season 5 Products Page!
Shop the Shark Tank Recap Store
Jennifer is an avid Shark Tank fan that has been watching the show for years. She serves as Senior Editor at Shark Tank Recap and ensures that all our information is accurate and that our posts are up to date. Her favorite Shark Tank products are Le-Glue and Ring!