'Shark Tank': Why Mark Cuban invested $600,000 into a business that turns human ashes into diamonds
Billionaire Mark Cuban is known for his tech investments — but on Sunday's "Shark Tank," Cuban diversified in a unique way.
Cuban invested six figures in Eterneva, a business that turns human or animal ashes or hair into diamonds.
"What we do is grow real diamonds from the carbon in someone's ashes," Garrett Ozar, who co-founded the company with Adelle Archer, said during the episode. "But really, we're in the business of celebrating remarkable people. Our diamonds give you something positive to look forward to."
According to Archer and Ozar, customers receive a "welcome kit," which includes a small container for a half-cup of ashes or hair. Customers then send that back to Eterneva. Customers also pick the diamond of their liking.
Then "we extract carbon from a half a cup of ashes or hair," Ozar said during the episode. "Once we have carbon, we then use high pressure, high temperature to grow a diamond."
The prices of these diamonds range from $3,000 to $20,000, according to Archer. She said the average order value is $8,000, and customers "pay upfront, in full."
"That's smart," Cuban said.
It takes 10 months to make the diamond, and it costs Eterneva between $3,000 to $5,000 to make.
The Sharks were impressed with Eterneva's business model.
"First year in sales we did $913,000, and we're projecting to do $2.7 million this year," Ozar said during the episode. "We're doing three-and-a-half times the volume of all our competitors in a year and a half," Archer added.
Archer and Ozar asked the Sharks for a $600,000 investment in exchange for a 5% stake. However, once the Eterneva duo revealed they currently have investors, previously raising a "$1.2 million round in a $10 million valuation," the Sharks were concerned that they did not really need a Shark investment.
"You come on here knowing you have to negotiate, but that puts a cap on what you're able to negotiate," Cuban said during the episode.
Shark Daymond John was not happy with the Archer and Ozar's decision to appear on "Shark Tank."
"Tens of thousands of people apply to stand on this rug. And every person that takes this carpet that has the money, they took the chance away from somebody that desperately needed help," John said during the episode. "Do you understand where I am seeing this as a problem?"
Cuban then added, "what he is asking is: are you happy with the commercial that we're making you right now?"
Despite this, Cuban thought the company was worth an offer, revealing why he was sold on the business.
"I love the idea. You're a celebration company," Cuban said during the episode. "Whether it's death, whether it's human, whether it's pet, whether it's birth. I would have loved to take a hair from my kids when they were born and put it in a diamond and give to my wife as a gift, even if it took 10 months. I love what you're doing."
Cuban first offered $600,000 for a 15% stake in the company during the episode. But after some back-and-forth, including some competition from Sharks Robert Herjavec and Kevin O'Leary, the Eterneva co-founders went with Cuban's final offer: $600,000 for a 9% stake.
"I knew you guys were smart," Cuban said.
"Now that Mark is a part of the team, sky is the absolute limit," Archer said.
Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."
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