In 2012, Amrita Saigal quit her dream job.
After working as an engineer for Procter & Gamble for two years, the MIT and Harvard University graduate couldn’t understand why the company made sanitary napkins and diapers with harsh chemicals.
So he quit his job and moved to India, where he built a company called Saathi around a sanitary napkin made from banana peel fibers, which he had invented at MIT. After six years, he returned to the US with the suspicion that he, too, could create a better diaper.
In 2021, he 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,” he secured 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 generated $850,000 in revenue in its first full year of business, Saigal said on the show.
Investors also liked Saigal’s entrepreneurial record and willingness to take risks to sacrifice job security to pursue an idea.
“I saw firsthand how much plastic we were putting into sanitary napkins and nappies,” Saigal explained. “I decided to quit my stable job and move to India to start my first company.”
Prior to appearing on the show, Kudos had grossed $3.3 million at a valuation of $12.5 million. Saigal used that figure to ask the Sharks for $250,000, in exchange for 5% of the company.
Kevin O’Leary was not convinced that the Kudos product would succeed in a cutthroat industry. “This is a very mature market,” O’Leary said. “Do you really think that after they get, say, 4 or 5% of the market, they’re not going to wake up and say, ‘We need a green diaper?'”
Kudos represented a gap in the industry, Saigal responded. Plus, he added, even 0.01% of the industry is more than $8 million.
Last year, the diaper market was worth $82.59 billion in the US alone. according to a report by Grand View Research. Procter & Gamble is one of the most dominant players in the market, the report notes.
Procter & Gamble did not immediately respond to CNBC Make It’s request for comment.
Saigal also expressed plans to launch new products, including swim shorts for coaches and sanitary products for adults.
“We need to figure out how to make this product a household name,” he said. “We need to expand to other online retailers. We know Goop’s audience is very, very aligned [and] have shared values.
With that, Cuban’s interest was piqued. She asked Paltrow if she would be interested in partnering together.
Negotiations were quick: the couple offered Saigal $250,000 for 12%. Saigal asked if they would be willing to split the 8%, and Cuban said they would drop to 10%, with part of the capital in adviser shares.
Saigal proposed 7% equity with 3% in adviser shares, and Cuban and Paltrow agreed. Saigal said she was delighted that Kudos’ products were aligned with Paltrow’s lifestyle brand, Goop.
Investors also expressed optimism. Cuban told Paltrow that he thought Saigal was “a star” with a “dynamic pedigree.”
“You have to go for a jockey like that,” Paltrow replied. “She clearly has a business mind and an engineering mind. I think she’s doing something that’s really important and really needed in the marketplace.”
Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”
Do not miss: