Mark Cuban and Gwyneth Paltrow are the newest investors in a diaper startup brand founded by a former Procter & Gamble employee.
Amrita Saigal, who worked at the Cincinnati-based consumer goods giant as a manufacturing engineer for Always pads and Gillette razors, pitched her new company Kudos, an all-natural cotton disposable diaper, on ABC’s “Shark Tank” earlier this month.
Kudos, which claims to be the first disposable diaper lined with 100% cotton versus typical plastic-based materials, gained seemingly instant interest from Cuban, a billionaire investor and staple on the show, as well as Paltrow, who is serving as a guest shark for Season 14.
The pair agreed to make a $250,000 investment in Kudos for a 10% stake. Saigal was originally seeking $250,000 for 5% equity.
The funding will help the company expand its online retail channels, a key next step.
“Our customers love that it’s natural, chlorine-free and far more sustainable — and these are natural diapers that actually work,” Saigal said. “Word of mouth has been huge for us. We need to figure out how to make this product a household name.”
In 2009, Saigal said she landed her “dream job” at P&G straight out of college — she’s a Massachusetts Institute of Technology grad who also has an MBA from Harvard Business School — working as a manufacturing engineer for Always pads, Gillette razors and more.
It’s also where she saw first-hand how much plastic is put into products like sanitary pads, diapers and tampons, she said. Disposable diapers, she added, stand as the third-large consumer item in landfills.
She left P&G in 2012 and moved to India to start Saathi, an eco-friendly, biodegradable sanitary pad brand that uses waste banana tree fiber (she said a lack of access to feminine products is a leading driver of dropout rates for girls). Saathi today is one of the country’s leading eco-friendly brands.
After six years, Saigal moved back to the U.S. Her friends were all starting to have babies, and “I knew we could do better with diapers as well,” she said.
Kudos was born in 2018. The company’s four-member founding team includes Jim Keighley, who spent 40 years at P&G, including 22 years as part of the engineering leadership team for Pampers. He is serving as the company’s engineering adviser.
Los Angeles-based Kudos is sold entirely direct-to-consumer. Each box contains a one-month supply of diapers. A one-time purchase costs $88 (41 cents a diaper) while a subscription member is $78 a month (36 cents a diaper).
The company did $850,000 in sales in its first year and has raised $3.5 million in venture funding on a $12.5 million valuation.
Saigal said she expects Kudos to become profitable next year with about $4.5 million in sales.
The company recently expanded into baby wipes and plans to launch a line of training pants and swim pants. Then Saigal wants to move into the adult diaper market, which is “booming.”
“Baby diapers is just the beginning,” she said.
She called the partnership with Cuban and Paltrow “a dream come true.” Paltrow in particular seemed a “perfect match.” Paltrow, an Oscar-winning actress, founded Goop, a wellness and lifestyle juggernaut, in 2008. Per its last fundraise in 2019, Goop was valued at $250 million.
While the sharks raised concerns about Kudos competing in a mature, crowded field – a market dominated by Pampers (P&G) and Huggies (Kimberly-Clark) and natural brands like Honest Co. – “even 0.01% is $7 million in sales,” Saigal said.
“I do see a really big white space in the market,” Paltrow said. “If it’s true these function the way you’re saying they function, I think you have a huge opportunity here."
Fellow former P&Gers have posted mixed results on past "Shark Tank" appearances:
- Neal Hoffman, a Cincinnati entrepreneur who worked at P&G in the food and beverage division, pitched Mensch on a Bench to millions in 2014, and landed a $150,000 investment for 15% equity in the company from sharks Robert Herjavec and Lori Greiner.
- Kash Shaikh spent nine years at P&G before cashing out his 401K to finance Besomebody, a mobile platform for motivational content, where people could connect through mutual and shared passions. He was looking for a $1 million investment for 10% equity in the company when he appeared on the show in November 2016. Shaikh received zero deals.
- William Schumacher, a former P&G brand manager, and his wife Kristen Schumacher, founders of Uprising Food, appeared on the show’s fall 2021 season looking for $500,000 for a 3% equity stake. They also left without a deal.
"Shark Tank" Season 14 premiered in September. The show airs Fridays at 8 p.m.
