- Kevin O'Leary probably made over 20 times his money from one "Shark Tank" investment.
- He purchased a small stake in Basepaws, a startup offering at-home genetic testing for cats.
Kevin O'Leary likely made over 20 times his money on a single "Shark Tank" investment.
The celebrity investor backed Basepaws, a startup selling at-home genetic tests for cats, when it was $4 on "Shark Tank" in 2019. Its founder, Anna Skaya, was seeking $250,000 in exchange for a 5% stake in her company. O'Leary and another shark, Robert Herjavec, both agreed to invest $125,000 for a 5% stake each, valuing Basepaws at $2.5 million.
O'Leary said on "$4" earlier this year that among his "Shark Tank" investments, Basepaws was his biggest winner in percentage terms. In contrast to the episode, he recalled paying $50,000 for a 3.5% stake, implying a $1.4 million valuation.
"It was such a crazy pitch, I bought it anyway," O'Leary said. "We just sold the company at such a crazy price that I had to sign a NDA," he added, referring to a non-disclosure agreement.
O'Leary — whose nickname is "Mr. Wonderful" — noted an $4 had pegged the deal price at over $50 million. "It wasn't even close to that," he said, gesturing upward.
Zoetis, an animal-health company with a $80 billion market capitalization, completed its purchase of Basepaws in the second quarter of 2022. Its $4 for that period shows it spent $93 million of cash on acquisitions, and Basepaws was the only takeover it disclosed.
O'Leary and Zoetis didn't immediately respond to requests for comments from Insider.
Let's conservatively assume that Zoetis paid $50 million for Basepaws. If O'Leary paid $125,000 for a 5% stake, he would have made about $2.4 million or 20 times his money, ignoring any dilution. If he paid $50,000 for a 3.5% stake, he would have pocketed about $1.7 million — a 35-fold return.
Moreover, if Zoetis paid the full $93 million for Basepaws, O'Leary potentially walked away with $3.2 million or $4.5 million, depending on the terms of his investment.
Zoetis likely acquired Basepaws in part because of its rapid growth. The startup, which has expanded its testing to dogs as well as cats, only had $200,000 in sales when Skaya pitched it to the sharks. It $4 of tests over the next 18 months.
"I invested in Anna for Anna," O'Leary said about Basepaws' founder in a $4. "She's so good at promoting her products, she has built that business 10-fold since 'Shark Tank.'"
O'Leary has struck gold with other businesses too. His biggest "Shark Tank" winner in dollar terms was Plated, a meal-kit startup $4 for around $300 million in 2017, he said on the podcast.