The Keto diet has undoubtedly become one of the most popular diet trends in recent years. It achieved massive acceptance from the public because it’s a diet that lets you have everything that other diets told you to avoid: fats.
Simply put, it’s a diet that does not feel like you’re depriving yourself. Cave Shake, which appeared on Season 10 of the TV show Shark Tank, is one business riding on the Keto diet popularity with their delicious, creamy shakes.
What happened to Cave Shake after getting a $250,000 investment from guest Shark Charles Barkley? Read on to find out about the latest on the company.
What is Cave Shake?
Cave Shake is a coconut milk-cased meal replacement shake that is vegan, paleo, gluten-free, sugar-free, and dairy-free dessert. It contains Medium Chain Triglycerides, the healthy type of fat that gives high energy levels in the Keto diet.
The healthy snack can be served cold to get that creamy, smoothie-like texture. Or it can be taken at room temperature at the gym like a protein shake to refuel after a workout.
How did Cave Shake start?
Cave Shake founders Holly Heath and Billie Cavallaro started the company in 2015. They attested that the keto lifestyle helped them improve their health.
Cavallaro shared that as a ski racer, following a keto lifestyle helped her deal with inflammation. On the other hand, Heath admitted that the keto helped her body heal and recover after a car accident.
To help grow their company, long time friends Heath and Cavallaro turned to beverage accelerator LA Libation, which is affiliated with Coca-Cola. The Cave Shake founders gave LA Libation 15% equity in their company.
Little did they know that this decision would be a disadvantage for them when they faced the Sharks.
Cave Shake in the Shark Tank
The Cave Shake founders came into the Tank asking for $250,000 in exchange for 10% in their company.
The Sharks loved the taste and flavors of their shakes but were not entirely convinced about the business potential. After learning about the incubator deal between Cave Shake and LA Libation, the Sharks were less enthusiastic.
Shark Kevin O’Leary stated that he did not like that another company had a royalty deal with Cave Shake for free while he would only get equity in exchange for a quarter of a million dollars investment. And for that reason, he was out.
Sharks Mark Cuban, Lori Greiner and Robert Herjavec followed suit. This left guest Shark Charles Barkley as the lone potential Shark to become a partner.
What were the Sharks’ offers for Cave Shake?
Barkley told the Cave Shake owners that he would give them the $250,000 they were asking for, but in exchange for 20% equity. Cavallaro asked if he would be willing to go down to 14%.
Barkley pointed out that it wasn’t fair that another investor was getting 15% plus royalty for free.
He shared that after his retirement as a professional basketball player, he had trouble keeping his weight down. He admitted that he was interested in Cave Shake because he wanted to support a product that would help people manage their weight.
Did Cave Shake get a deal on Shark Tank?
After some discussion, the Cave Shake founders were able to shake on a deal with guest Shark Charles Barkley who will invest $250,000 for 20% equity in the company.
Heath was hesitant to accept the deal at first. But Cavallaro really wanted to close with Barkley. She admitted that a partnership with Barkley would help them break through to the athlete community.
Here’s a YouTube clip of the negotiation with Shark Charles Barkley, courtesy of ABC.
What happened to Cave Shake after Shark Tank?
After appearing on the season 10 episode of Shark Tank, Cave Shake went through some significant changes. Cave Shake changed their branding and name and is now known as Space Shake.
Their incubator deal with LA Libation got them into the shelves of health food shop Whole Foods. However, it is not specified which Whole Foods branches carried the keto-friendly meal replacement shake.
The brand has also come out with a keto-friendly snack bar called Keto Space Bite. Its three main ingredients are allulose, pecans and almond butter. It is non-GMO and of course, paleo-friendly as well.
Is Space Shake still in business today?
Space Shake, as Cave Shake is known now, is still in business today. The name change to Space Shake came as part of the deal with Shark Charles Barkley.
The company also changed the flavor of shakes offered and removed strawberry. From the original jar packaging, they switched to a convenient pouch with reduced serving size.
Customers can still order their products on their website. According to their website, Space Shake products are also now retailed in over 50 locations in California and even in Las Vegas through Whole Foods.
They are also available on Amazon, which delivers everywhere.
Their social media presence is not so loud compared to other brands that appeared and closed a deal on Shark Tank. Their Instagram account only has 20.3k followers, with very little engagement.
With a very crowded nutritional-drink market, Cave Shake needs to be able to stand out in order to thrive. Although it appeared on Shark Tank and was backed by Charles Barkley himself, it seems that the brand was not able to fully capitalize on either.
How much is Cave Shake worth now?
At the time of taping the show, the founders of Cave Shake projected that their end of year sales would be $750,000. They were banking on the Whole Foods distribution rollout, which eventually pushed through.
The investment by Charles Barkley pegged the company’s valuation at $1.25 million.
The company has not disclosed its current net worth, but with Barkley’s investment and the sales from the incubator deal, it is possible that Cave Shake is worth higher than Barkley’s valuation.
Lessons from Cave Shake on Shark Tank
The Sharks were not so keen on investing in Cave Shake from the pitch of Holly Heath and Billie Cavallaro for two reasons.
First, the company had an existing partnership with incubator LA Libations that did not sit well with the Sharks. O’Leary explained that he did not like that another company was getting a royalty for free while he wouldn’t even get commission despite investing $250,000.
The Cave Shake founders also did or could not disclose enough details from the deal, which made the Sharks quite wary. Of course, investors would want to clearly know what they would be getting into business with.
Second, the entrepreneur duo predicted that they would make $750,000 by the end of 2018. This was a huge jump from their 2017 sales of $270,000. At the time, that estimate was from the predicted sales from the partnership with LA Libations that had not been actualized at the time of taping the show. This made the Sharks doubt the sales and valuation of the company.
Luckily for Cave Shake, Barkley believed in them as people and as entrepreneurs. Apart from wanting to support the goal of the company to help people lose weight, Barkley admitted that he liked them enough to agree to invest in the business.