Coffee Meets Bagel (CMB), founded by Dawoon Bae, Arum Lee, and Soo Kang, is best known as the Shark Tank startup that rejected $30 million in funding from show regular and primary investor Mark Cuban. The value of Coffee Meets Bagel is forecast to reach $150 million by 2022. Especially so in such a cutthroat market.
The target audience for Coffee Meets Bagel?
The majority of Coffee Meets Bagel’s users are over the age of 30, with only 36% being under the age of 29. Despite sharing a core demographic with Hinge, Coffee Meets Bagel’s users are older. Plus, CMB has about 7% more users over 50 than Hinge does.
History Of The Founders
— Coffee Meets Bagel (@coffeembagel) May 7, 2021
As teenagers, Dawoon, Arum, and Soo Kang Chung emigrated from Korea. They got a first-rate education in the USA. Soo went to Harvard, Arum to Stanford, and Dawoon to Parsons to get his degree in design.
They were discussing the challenges of meeting people through online dating one day. They reasoned there must be more creative ways to manage a dating app if it was to produce better matches, and they were right.
Coffee Meets Bagel was conceptualized in this way. The Kang siblings all quit their high-paying jobs to give their business an increased chance of success.
Formation Of The Corporation
The aspiring businesswomen travelled to San Francisco, California, to gain access to the technical tools necessary to launch their website. CMB was finished in under a year.
Lightbank and a Match.com co-founder provided $600,000, and the app was released to the public in 2012. Unlike its rivals, it used a machine learning algorithm to selectively recommend users based on their Facebook profiles. At midday, users are given profiles of other people who might be a good match. This one-of-a-kind strategy set them apart from the competition, which included apps like Bumble, Hinge, and Tinder.
In terms of both users and money, their success was meteoric. The company, however, was experiencing the same cash flow problems and annual losses of one million dollars as any other early stage venture. For this reason, its creators set out to find angel investors.
"Michael and I matched on CMB in August 2017. On our first date, my first thought was "Wow, he's so tall!" Michael later told me his first thought was 'Wow, she's so short, not sure if this is going to work out.'" pic.twitter.com/NuuDnYCe2T
— Coffee Meets Bagel (@coffeembagel) July 20, 2020
Shark Tank Pitch
In 2015, Dawoon, Arum, and Soo got their chance to pitch their business on the hit ABC show Shark Tank. On the programme, they were seeking $500,000 in exchange for 5% of the company. This put the then-value of the dating site at $10 million.
This sparked a heated debate amongst them and the Shark Tank crew. As the series progressed, it became known as a memorable pitch. Although most of the other Sharks thought it was too risky to invest in, billionaire Mark Cuban was interested.
At last, he made the biggest cash offer in Shark Tank history, proposing to purchase the entire CMB brand for $30 million. The sisters, however, felt the offer was inadequate, considering CMB could potentially compete with Match.com, which was generating $800 million annually at the time.
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The Next Generation Of Sharks
The founders of Coffee Meets Bagel looked for additional funding after their appearance on Shark Tank. The company raised over $23.2 million over the course of five investment rounds. Both Atami Capital and DCM Ventures are major backers.
Unfortunately, they reported that their website was hacked and the personal information of more than 6.1 million users was exposed in 2019. The following year, they got back on their feet by introducing a video-based version of “speed dating.” CMB is clearly failing as a business, and it doesn’t even make the top 20 list of most popular dating sites. It is estimated that around 10 million people use their app, which is still accessible on both Android and iOS.
Despite falling short of the sisters’ lofty revenue projections, the firm is currently valued at around $150 million and is expected to decline further in the near future.
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