Engineer saw how diapers were made, thought she could do better—now she has a $250,000 'Shark Tank' deal

CEO and founder Amrita Saigal pitches Kudos, her sustainable diaper company which brought in $850,000 in its first year, on ABC's "Shark Tank."
ABC/Christopher Willard

In 2012, Amrita Saigal quit her dream job.

After working as a Procter & Gamble engineer for two years, the MIT and Harvard University graduate didn't understand why the company was making sanitary napkins and diapers with harsh chemicals.

So she quit her job and moved to India, where she built a company called Saathi around a sanitary napkin made from banana peel fibers, which she'd invented at MIT. After six years, she moved back to the U.S. suspecting she could create a better diaper, too.

In 2021, she launched Los Angeles-based Kudos, which makes disposable diapers from cotton and other sustainable materials — and on Friday's episode of ABC's "Shark Tank," she scored a $250,000 investment in Kudos from Mark Cuban and guest Shark Gwyneth Paltrow.

Both Cuban and Paltrow said they were interested in the product's sustainability, its chemical-free nature and, perhaps most notably, its sales. Kudos brought in $850,000 in revenue in its first full year of business, Saigal said on the show.

The investors also liked Saigal's entrepreneurial track record, and her risk-taking willingness to sacrifice job security for chasing an idea.

"I saw firsthand just how much plastic we were putting into sanitary napkins and diapers," Saigal explained. "I decided to quit my stable job and move to India to start my first company."

Before appearing on the show, Kudos had raised $3.3 million at a $12.5 million valuation. Saigal used that figure to ask the Sharks for $250,000, in exchange for 5% of the company.

Kevin O'Leary wasn't convinced that Kudos's product would make it in a cutthroat industry. "This is a very mature market," O'Leary said. "Do you really think after you get, let's say 4 or 5% of the market, they're not going to wake up and say, 'We need an eco-friendly diaper?'"

Kudos represented a gap in the industry, Saigal responded. Plus, she added, even 0.01% of the industry is more than $8 million.

Last year, the diaper market was worth $82.59 billion in the U.S. alone, according to a Grand View Research report. Procter & Gamble is one of the market's most dominant players, the report notes.

Procter & Gamble didn't immediately respond to CNBC Make It's request for comment.

Saigal also expressed plans to launch new products, including trainer swim shorts and adult sanitary products.

"We need to figure out how to make this product a household name," she said. "We need to expand into other online retailers. We know the Goop audience is very, very aligned [and] has shared values."

With that, Cuban's interest was piqued. He asked Paltrow if she would be interested in partnering together.

Negotiations went quickly: The pair offered Saigal $250,000 for 12%. Saigal asked if they'd be willing to split 8%, and Cuban said they'd come down to 10%, with some of the equity in advisor shares.

Saigal proposed 7% equity with 3% in advisor shares, and Cuban and Paltrow accepted. Saigal said she was ecstatic because Kudos' products aligned with Paltrow's lifestyle brand, Goop.

The investors expressed optimism, too. Cuban told Paltrow he thought Saigal was "a star" with a "dynamic pedigree."

"You have to bet on a jockey like that," Paltrow responded. "She clearly has a business mind and engineer's mind. I think she's doing something that is really important and really needed in the market."

Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."

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