Au Baby Shark Tank Pitch

AU Baby Shark Tank Pitch for The Only Blanket With Sustainable Softness

Alexandra Ulmer founded AU Baby, a Portland-based company that produces sustainable baby blankets. Ulmer pitched her business on Shark Tank Season 15 Episode 13, asking $80,000 for 25% of her company. AU Baby’s goal is to offer unique, eco-friendly, and sustainable products that are good for babies and for the planet.

Au Baby – The Numbers

  • Amount and equity asked: $80,000 for 25%
  • Amount and equity received: $80,000 for 35%
  • Shark(s) in the deal: Kevin O’Leary
  • Valuation of the deal: $228,571

AU Baby, The Origins

Au Baby Shark Tank the Origins

AU Baby was born as a solution to the low-quality baby blankets on the market, that represent a potential problem for both babies and for the environment. Ulmer married its founder’s initials and the French phrase “for the baby”, aka AU Baby.

The WHY Behind Au Baby

Ulmer’s belief that every baby deserves an exemplary start in life that she crystallized into the foundations of AU Baby. The brand differentiates itself by offering the first baby blankets in the market that address the important ‘three S’s’: Sleep, Stains, and Skincare. Its products are a testament to a sustainable impact, and an eco-friendly philosophy, echoing the founder’s passion for design that respects and nurtures both babies and the planet.

AU Baby Victorious Moments at Shark Tank

Alexandra Ulmer Background and Pitch

Alexandra Ulmer started her pitch at Shark Tank with a bang, addressing a very common issue among parents. We have a 4-year-old toddler, and she is 100% spot-on with the issue.

I’m seeking $80,000 for 25% of my company, the first clean sustainable baby blanket collection made with a performance fiber built just for babies. But here’s the problem, babies are messy! […]

[…] Say goodbye to weekly washing, our blankets can stay clean for up to a year, they are naturally stain and smell proof!

Alexandra Ulmer – Shark Tank pitch

She adds that AU Baby’s blankets are great for thermoregulation, and will keep your baby cozy all night long.

Once the Sharks ask about her background, she wows them by mentioning that she’s been in high-end fashion designing. But it doesn’t end there. In the past 7 years, she was a hybrid engineer/designer for Nike, where she worked on performance footwear materials, specifically Flyknit, for professional athletes like LeBron James. At this point, you could see Mark Cuban’s face be like “holy…”. Not a common reaction. The Sharks were definitely impressed.

What is Nike Flyknit: A material made up of strong yet lightweight strands of yarn that have been woven into a one-piece upper, securing an athlete’s foot to the shoe platform.

Ulmer left her job to focus on blankets for babies because most of the current products are polyester and acrylic, aka plastic. And babies are the most vulnerable to environmental toxins.

AU Baby Shark Tank Negotiation

AU Baby’s blankets are manufactured in Los Angeles. The cost of making one is $74 per blanket on average, and they retail online for $160. Before Shark Tank, AU Baby had a lifetime sales of $62,000. As of 2024, the company is projected to hit $100,000 in sales exclusively through direct-to-consumer (DTC) channels.

Kevin asked about the cost of customer acquisition, but Ulmer didn’t have the exact numbers. That was a bit surprising to the sharks, and she adds how they are going through a PR firm that specializes in juvenile products.

To Alexandra’s point, they did not run any digital advertising campaign on Facebook, Instagram or other social media platforms. Therefore, it is not possible to have the exact numbers since there is no track record of metrics like cost per click, cost of campaigns, cost per 1,000 views, and other ads-related data. These data would allow you to calculate the precise cost to reach each customer who made a purchase.

Still, Kevin isn’t fully sold. He pushes on with more questions about the plan to reach customers who have $160 to spend.

Au Baby Shark Tank Kevin O'Leary
Kevin O’Leary during the negotiation. Photo credit

At this point, Robert is first out due to the elevated costs. Mark is not worried about the costs, rather, he is trying to figure out where the purchasing decision is made. But since that’s not clear, he’s out too.

Lori addresses competition and price, and it’s too early of a stage for her. For that reason, she’s out too. Emma has a similar remark, too expensive and too early for her. Emma is out too.

Kevin O’Leary emerged as the lone-shark, and he is still worried about the customer acquisition costs. Alexandra has a brilliant answer and addresses the power of building a community, and the real opportunity to make AU Baby very profitable within just a few years.

Kevin is genuinely interested, but he lets out how he is facing an internal dilemma. He offers $80,000 for 50% equity. Alexandra’s counter-offer is $80,000 for 30%.

The advantage of having Kevin onboard is that he has a gigantic database on weddings, and he is in the wedding industry. Baby blankets could be perfect for baby showers and wedding gifts!

Kevin stretches thin going down to 40%, Alexandra pushes back with a 35% counter-offer.

Ultimately, Kevin agrees to $80,000 for 35% equity in AU Baby. Alexandra and Kevin shook hands, marking a new chapter for AU Baby.

Shark’s Feedback

Robert was the first to comment on the gap between her appearance in various news and podcast outlets and sales. This gap addressed the issue where:

The higher the price point, the consumer doesn’t always connect with that value proposition. And there is a cost for that. Any time you have to teach the consumer, the price goes up.

Robert Herjavec

Mark Cuban’s main concern was about her marketing approach, and his feedback was about understanding where, in the customer path, is the purchasing decision made. He indicated that that’s not clear yet, and it is an important aspect to address to maximize sales.

Likewise, Lori Greiner loved the quality of the blankets, but considered the business too premature for an investment. Guest shark Emma Grede loved the blankets, but she was worried about the high costs. However, once the perfect avatar for the customer is ready, and there is a clear path to the purchasing decision, there will be customers who have no problem spending $160 on a baby blanket.

AU Baby Product Development

Au Baby Shark Tank Product Development

Ulmer’s goal has been to create a unique balance between superior quality and ecological integrity.

Material Selection for Au Baby’s Blankets

AU Baby selects materials with baby’s health and the environment in mind. By rejecting the use of pesticide-ridden cotton and polyester, they prioritize the use of natural fibers like Responsible Wool Standard (RWS)-certified Merino wool and organic cashmere. This guarantees a cozy experience that respects the welfare of sheep.

  • NATIVA™ merino wool is a naturally renewable material that, compared to other textile materials, requires significantly less water for its growth, manufacturing and after care. It is also biodegradable and recyclable, and thus, it majorly reduces the impact on the environment.
  • Organic cashmere represents pure, undyed, and unbleached cashmere. It’s a relatively rare fiber, and is biodegradable. The water needs for processing organic cashmere are minuscule compared to those of cotton. For example, making one undyed cashmere t-shirt takes roughly 31 liters of water (8.2 gallons), while making one undyed cotton t-shirt takes up to 2,700 liters of water!

Overall, these target materials contribute to the softness and warmth without compromising on safety, guaranteeing that each product is non-toxic and gentle on the most sensitive skin.

AU Baby Sustainable Practices

Certifications listed above each of the AU Baby products. Image credits

Each baby blanket is built with sustainable material by promoting regenerative agriculture. AU Baby works with Argentinian family farms, where sheep roam freely, and the resulting wool is on par with the strict Responsible Wool Standard (RWS). This approach fosters intercultural business collaborations, and supports the craftsmanship of multi-generational gauchos who oversee the ethical and happy livelihood of the sheep.

When it comes to processing, AU Baby doesn’t take shortcuts either:

Our Italian mill has been family owned since 1948. Operating in the EU, the mill enjoys all labor protections native to Italy.

Our knitting factory is based in downtown Los Angeles. This small scale, woman-owned luxury production facility is one of the last of its kind in the USA.

AU Baby FAQ page

Design and Comfort

Comfort and safety are paramount. AU Baby blankets are designed to address the “3 S’s”: Sleep, Stains, and Skincare.

  • Sleep: The blankets are utterly comfy, and help with thermoregulation. These features are key for offering a peaceful sleep to babies. From my experience with our toddler, she was known for being restless, for kicking blankets away (she still does it), and for curling up with the softest blanket on the bed.
  • Stains: These blankets can be wiped with a simple cloth, reducing the number of washes needed to keep it clean and not stinky. Babies are messy, and especially in the first few months, any sort of fluid or food can stain a blanket. AU Baby’s blankets are a natural alternative to the plastic-like materials often used to prevent stains in baby’s beds.
  • Skincare: All of AU Baby’s blankets are hypoallergenic thanks to the natural qualities of NATIVA merino wool and organic cashmere. Say goodbye to baby’s skin rashes, and to uncomfortable nights spent tossing and turning!

Each item is not just a blanket, rather, it is a sophisticated product that considers every detail from the dyeing process to sustainable manufacturing, all structured around eco-friendly values.

Product List and Prices of AU Baby

Au Baby Shark Tank Cashmere Cloud
AU Baby Cashmere Cloud collection

AU Baby has three main collections designed around baby blankets: Heirloom Merino, Cashmere Cloud, and The Monogram Shop.

The fine-quality Heirloom Merino blankets offer warmth and durability, while Cashmere Cloud blankets provide a softer touch, ideal for a baby’s delicate skin. Customization is available through The Monogram Shop, allowing for personalized touches to the blankets.

Product CollectionDescriptionCost
Heirloom MerinoDurable and warm blankets, made from merino wool.$160
Cashmere CloudSoft blankets, crafted with cashmere for gentle comfort.$160
The Monogram ShopPersonalized blankets with monogram options.$160
Price list for AU Baby’s collections
Au Baby Shark Tank Hairloom Merino
The Hairloom Merino Collection. Image credits

Each collection is distinctive in its fabric and style options, yet they collectively showcase the company’s commitment to sustainability and natural materials. All products are tailored to meet the needs of babies and uphold an eco-friendly ethos.

While the average price point hovers around $160, it is a high-end product made with premium material.

Business Growth and Strategy

After Shark Tank, AU Baby will most likely grow like never before. It will have a larger market presence, it will potentially end up in retail locations, and its social media presence will increase. But where is AU Baby now?

AU Baby on Social Media

Au Baby Shark Tank Instagram account

AU Baby has Facebook, Instagram, and TikTok accounts. Instagram is by far their biggest account with 3,500 followers and roughly 1,000 posts. Facebook follows with 220 subscribers (as of Feb 2024), while their Pinterest and YouTube accounts have fewer subscribers.

The majority of the posts showcase products, pictures of cute kids and babies rolled into their super-soft blankets. When these are user-generated content, like reviews, it sends an even more powerful message. Should they post more about their lives while growing the business? If you follow Gary Vee, he’ll say to post much more, like 5, 10, or even 30 times a day. I’m not convinced everyone should do that, but it’s for sure a tactic that works.

Overall, AU Baby is doing a good job with Instagram. Facebook is also the place where grandparents are more likely to be. So, targeting that demographic on Facebook/Meta could be an interesting strategy for AU Baby.

Organic Traffic Potentials

Au Baby Shark Tank Journal

AU Baby’s sales comes fully from direct to consumer (DTC) sales. A very durable way to address customer acquisition is by organically ranking on Google for anything related to baby blankets. I quickly checked AU Baby’s website with SEO tools to evaluate how it performs. Traffic sits at around 200 visits per month, with an obvious spike following its appearance in Shark Tank.

One of the better ways to improve ranking is to create posts that target keywords around their products and niche. AU Baby’s website has only 25 articles under the Journal section. Expanding this section ten-fold, to more than 200 curated and targeted articles can be a lengthy process. Yet, it will provide a steady stream of traffic from people that search for items related to their niche. And if properly optimized for search intent, these post can become a powerful converting tool.

Customer Reviews

AU Baby’s website is full of 5-star reviews from verified customers. Since they are not in other retail locations, it is not possible to get external reviews. However, reading the comments, I truly believe that their product is exceptional and deserves the very high rating it’s been receiving.

Brand Extensions and Alliances

In the competitive baby product market, AU Baby has leveraged its brand to expand product offerings and has the opportunity to create strategic alliances.

Collaborative Opportunities

AU Baby, especially thanks to Kevin O’Leary investment, now has the opportunity to develop unique collaborations. For example, AU Baby’s founder, Alexandra Ulmer, worked at Nike and fully understands the exposure and market potential of creating powerful collaborations with either celebrities or well-known influencers.

Other potential partnerships should focus on eco-friendliness, children’s development, and sustainability. Examples could be:

  • Green Toys. Green Toys motto is “Every day is Earth Day”. They build toys out of 100% recyclable materials, including packaging. They are Phthalate and BPA free, and made in the USA. To date, they recycled 150 million milk jugs…they have an actual real-time milk jugs counter on their page!
  • Lovevery. Lovevery is also a baby toys company that focuses on early development play kits. They are committed to a limited carbon footprint, with 90% of all their material being renewable, bio-based on recyclable. They aim to achieve net-zero carbon in all parts of their production chain by 2030.
  • Newton Baby. Newton Baby makes 100% washable and reciclable mattresses, for people and pets. The company committed to helping the environment by using sustainable materials with no glue, latex, springs or foam. They also partnered with CleanHub and local communities in Indonesia to help with the recovery of ocean-bound plastic. To date, they collected more than 1,000,000 lb of plastic waste.

Overall, AU Baby just opened a universe of opportunities thanks to the deal at Shark Tank. With Kevin’s business “sharkiness”, and Alexandra’s experience in sustainable materials, luxury fashion, and performance sports, AU Baby is poised to grow and dominate the baby blanket space.

Seb is a PhD scientist by training, and an entrepreneur by heart. He started his first business while in elementary school, and he got in trouble for it! He then moved onto various online ventures, including consulting and e-commerce. Seb loved Shark Tank since he saw the first episode of Season one on TV. The rest is history.

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