BoxLock Owner Struggles To Answer The Reason For His Valuation | Shark Tank US | Shark Tank Global

Summary

Brad Ruus, CEO of Boxlock, pitches his smart padlock system designed to secure e-commerce deliveries from theft. The device allows delivery drivers to scan and secure packages in a storage container, notifying users upon delivery. Despite pre-sales of 800 units and partnerships with carriers, investors express concerns over the high valuation of $20 million, the need to change user behavior, and the complexity of scaling the solution across different delivery networks.

Takeaways

• 📦 BoxLock is a smart padlock designed to secure deliveries from theft.
• 🏡 It is installed on a storage container outside the user's house.
• 🔐 Delivery drivers use the lock to scan the package's tracking number, and if it matches, the lock opens to allow them to place the package inside.
• 📱 Users receive a notification on their phone once the package is securely delivered.
• 🚀 The product is currently in manufacturing and has not yet reached consumers.
• 💸 Brad has pre-sold 800 units on Kickstarter, priced between $89 to $109.
• 💼 The cost to manufacture each unit is expected to be around $65.
• 📈 The company is seeking $1 million for 5% equity, valuing the business at $20 million.
• 📈 The valuation is justified by the unique opportunity to solve a widespread problem.
• 📱 The company is working with carriers on driver awareness and training programs.
• 📉 Some investors are skeptical about the high valuation and the need to change user behavior.
• 💼 One investor offers a $1 million loan with a royalty and interest in return.

Q & A

What is BoxLock and who is Brad Ruus?

BoxLock is a smart padlock designed to secure package deliveries. Brad Ruus is the CEO and founder of BoxLock, a company based in Atlanta, Georgia.

What is the main problem BoxLock aims to solve?

BoxLock aims to solve the problem of package theft, specifically from porch pirates, by providing a secure storage container that can only be opened by delivery drivers using the package's tracking number.

How does the BoxLock system work?

The delivery driver scans the tracking number on the package with the BoxLock padlock. If the package is destined for that address, the lock pops open, allowing the driver to place the package inside and secure it.

What is the current status of BoxLock's product development?

At the time of the transcript, BoxLock is in the manufacturing phase and has not yet been delivered to consumers, but 800 units have been sold on pre-sale.

How much investment is Brad Ruus seeking and for what percentage of the company?

Brad Ruus is seeking $1 million for 5% of his company.

What is the current valuation of BoxLock based on Brad's ask?

Based on the $1 million for 5% ask, the company is valued at $20 million.

What has been the cost to manufacture BoxLock units so far?

The cost to manufacture the next order of BoxLock units is expected to be around $65 per unit.

How does BoxLock plan to make drivers aware of how to use the device?

BoxLock is working with different carriers on driver awareness and training programs to ensure they know how to use the device correctly.

What is the retail price for a BoxLock unit?

The retail price for a BoxLock unit is expected to be $129.

What is the concern of the investors regarding the high valuation of BoxLock?

The investors are concerned that the high valuation does not reflect the current stage of the product and the challenges of changing user behavior and the need for widespread adoption by delivery drivers.

What is the proposed deal by one of the investors involving a loan and royalty?

One investor proposed a deal to give Brad Ruus $1 million as a loan, with a royalty until the investment amount plus an additional $500,000 is recouped, and an 8% interest rate.

What is the final decision of the investors regarding the investment in BoxLock?

Most investors decided to pass on investing in BoxLock due to concerns about the high valuation, the need to change user behavior, and the complexity of the problem being addressed.