A Baltimore company that turns mushrooms into vegan bacon received $150,000 from two celebrity investors on ABC’s popular show “Shark Tank" on Friday.
Meat the Mushroom cut a deal with investors Kevin O’Leary and Lori Greiner for them to own 33.3% of the company in exchange for $150,000. All of the celebrity investors were instant fans of CEO Marvin Montague Jr.’s “shroomacon,” but had some misgivings about the future of the business and the low amount of equity Meat the Mushroom initially offered.
“On Shark Tank, we’ve had so many plant-based products and they all taste like crap,” O’Leary said. “This actually tastes good.”
The company plans to use the investment to expand into 1,000 grocery stores by the end of the year. Marvin and his wife Aleah Montague's pitch on Friday night focused on the taste of the product, its low number of ingredients compared to other vegetarian bacon, and a bit of showmanship. Marvin started throwing mushrooms at a “samurai guy” to demonstrate how mushrooms are sliced for “shroomacon.”
“We figured this was a once-in-a-lifetime opportunity, so why not have some fun,” Marvin Montague told the Baltimore Business Journal about the company's pitch.
The couple initially sought a $150,000 investment for a 7.5% stake in Meat the Mushroom. O’Leary made a counteroffer of $150,000 for 33.3% of the company before increasing his stake to 34%.
“This is my fifth season. I've never seen Mr. Wonderful give a fair offer,” said investor Daniel Lubetzky, referring to O'Leary's nickname. “And this is a fair offer.”
Shark Lori Greiner critiqued the product because she felt the bacon strips were not large enough, but attempted to slightly undercut Mr. Wonderful by offering $150,000 at 33.3%. The couple tried to negotiate the sharks down to a lower equity or a larger amount of money, but O’Leary pointed to the changing atmosphere in venture capital as the reason why the investors sought a lot of equity. Rising federal interest rates have increased the cost of borrowing money, making it easier for investors to demand large amounts of equity or outright acquire startups.
“We’re back where we were when we started Shark Tank in 2008,” O’Leary said. “There’s no money out there.”
Greiner tried to win over the apprehensive couple by bringing in O’Leary on a joint investment. She didn’t add money to the $150,000 investment but offered her additional guidance to the company as it tries to expand. Greiner is known for inventing and selling hundreds of products, such as kitchen tools and makeup organizers, on QVC and other platforms. O’Leary founded the software company SoftKey in 1986 and sold the firm to Mattel in 1999.
"It was very painful to have to give up that much equity but we know that [by] having two sharks on board we'll be able to take our business to the next level and leave a legacy for our daughter," Aleah Montague said on ABC.
The "Shark Tank" investment is the latest development for the company, which Marvin Montague started in 2021 after moving and hauling company collapsed amid the pandemic. He began selling the mushroom bacon at farmers markets across Baltimore, like the Fells Point Farmers Market. The couple has made several sacrifices to fund the business over the years, selling a car and moving back in with family members.
Those sacrifices have led to some early successes. Meat the Mushroom currently earns $40,000 to $50,000 in revenue a month, a massive jump from the $38,000 in sales the company made in all of 2021. Aleah Montague's background in marketing has helped the company get up to around 30,000 Instagram followers and several endorsements from celebrities like Food Network host Tabitha Brown.
"Shroomacon" is available at 75 to 100 supermarkets across the country like Mom’s Organic Market on the East Coast, Texas grocery store chain Central Market and midwestern chain Woodman's Markets. The company also sells the product online through its website.
Meat the Mushroom is hoping its trajectory will match that of another Baltimore firm that found success on Shark Tank. Hungry Harvest grew rapidly after earning a $100,000 investment from Robert Herjavec in 2016 and got an additional bump after the pandemic bolstered the demand for meal delivery services.
