In a world where sustainability is more crucial than ever, Russell Gong and Achal Patel, the dynamic duo came up with an amazing business idea. Fueled by a mission to tackle the environmental crisis caused by plastic medicine bottles, they created a game-changing solution.
Already with 700,000 users and substantial investments, Gong and Patel took their innovative idea to the Shark Tank. But did they secure a deal? How did the sharks react, and what challenges did they face? And what happened to Cabinet Health after Shark Tank?
Let’s find out in this Cabinet Health Shark Tank update.
| Company Name | Cabinet Health |
| Website | https://cabinethealth.com/ |
| Episode | Season 14, Episode 11 |
| Founded | In 2017 |
| Founder | Russell Gong and Achal Patel |
| Required Investment | $500,000 for a 2.5% equity |
| Closing Deal | $500,000 for a 7% equity 2% Royalty till $1 million is paid |
| Shark | Kevin O’Leary and Tony Xu |
| Current Business Status | In business |
Cabinet Health was founded in the year 2017 by Russell Gong and Achal Patel. Gong and Patel are friends, who were committed to promoting sustainability in healthcare.
Russell Gong brings expertise in sustainable product development, while Achal Patel’s background in the healthcare industry, with familial ties to pharmaceuticals, enriches the venture’s vision.
Together, they have propelled Cabinet Health to the forefront of eco-friendly healthcare solutions, focusing on mitigating the environmental impact of plastic medicine bottles.
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Cabinet Health simplifies the process of obtaining medication by offering an online service. Users can order their prescribed medication, and instead of traditional plastic bottles, Cabinet Health delivers pills in compostable pouches.
These pills are stored in safe, reusable glass containers. The company’s mission is to reduce the environmental impact of plastic medicine bottles, with an emphasis on sustainability.
Gong and Patel, the founders, leveraged their backgrounds to create this eco-friendly solution. Patel’s deep roots in the healthcare industry, coupled with Gong’s expertise in sustainable product development, shaped the foundation of Cabinet Health.
By eliminating plastic waste, the company not only contributes to environmental well-being but also provides a more conscious and convenient way for individuals to manage their health. They have envisioned their product as a step towards a greener, healthier future.
Before Shark Tank, Cabinet Health emerged as a solution to tackle the environmental impact of plastic medicine bottles. The company was conceived with the aim of promoting a sustainable lifestyle.
It started its operation as simplified medication management through an online service, delivering pills in compostable pouches stored in reusable glass containers.
Recognizing the alarming 190 billion plastic medicine bottles produced annually, Cabinet Health commenced its business journey in 2017 seeking to make a change. However, their initial journey was not as smooth as expected. But despite facing setbacks, the company achieved success with over 700,000 customers and substantial investments.
Originating in Gujarat, India, this healthcare venture traces its roots back to the visionary grandfather of CEO Prachal, who, in 1960, inaugurated the first acetaminophen factories in a small Indian town.
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Achal and Russel, hailing from diverse backgrounds, ventured into the realm of Sustainable Product Development after extensive research. Their maiden creation, the Version 1.0 Effiable and Compostable System, earned them a certification from B Corporations.
In strategic partnerships with Valisure, Grove, rePurpose, and Techstars, this eco-conscious healthcare packaging company secured a significant milestone in December 2022. A substantial $17 million in funding, a blend of debt and equity, was raised, primarily led by the Global Impact Fund.
The company’s financial journey showcases a commendable trajectory, accumulating a total investment of $23.6 million. Key contributors to this success include TechStars, SOGAL Ventures, Gaingels, and Pixel Perfect Ventures. A testament to their commitment to sustainable healthcare practices and innovative solutions.
Achal and Russ dive into the Shark Tank, pitching Cabinet Health as the world’s first compostable and refillable healthcare system, crafting top-notch medicines and supplements. They seek $500k for a 2.5% stake, boasting a starter set priced at $10-$20 for customers, with a 60%-80% profit margin.
Having amassed 700,000 customers, Achal, a third-generation healthcare entrepreneur, traces his roots to the first acetaminophen factories in India, pioneered by his grandfather.
Despite their impressive $14 million in sales this year, Cabinet Health faces scrutiny. While achieving unit-level profitability, they invest heavily in research and development, resulting in a net profit of negative 20%.
Barbara bows out citing risks, and Lori questions the negative 20% net profit. The entrepreneurs reveal a $2.5 million R&D investment and project $25 million in revenue in the next 12 months, anticipating a negative 10% net income.
With $13 million raised and an $81 million valuation, Mark exits, finding it a mismatch. Kevin declines at a $20 million valuation but counters with $500k for 12.5% equity. Sustainability champion Tony steps in with $500k for 10%.
Achal proposes a team-up, inviting Tony, Kevin, and Lori. Lori, deterred by the valuation, opts out, leaving the fate of Cabinet Health in the hands of Tony and Kevin’s potential partnership.
As the air thickened with suspense, an unexpected twist unfolded. The entrepreneurs proposed a unique royalty deal, throwing a curveball that left the sharks contemplating. Ultimately, a deal was struck – $500,000 for 7% equity and 2% royalties until doubling the investment ($1 million; $500,000 for each shark).
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Post-Shark Tank, the CEOs of DoorDash, Tony Xu, and Kevin O’Leary endorsed Cabinet Health in a video, praising its role in addressing the plastic problem in medicine.
In August 2022, Cabinet Health initiated a crowd-safe campaign on the Republic platform, successfully raising $217,640. The company’s 2021 revenue stood at $10 million.
Within weeks of the Shark Tank episode, Cabinet Health’s website witnessed a surge with 96,000+ visitors.
Recent Developments:
As of now, Cabinet Health is thriving, boasting an impressive annual revenue of $25 million.
By May 2023, Cabinet Health’s Sustainable Packaged Medicines hit the shelves in approximately 700 CVS Stores nationwide.
As of May 26, 2023, Cabinet Health expanded its product line to include 14 SKUs of medications, ranging from Allergy Relief to Pain Relief and more.
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Cabinet Health’s net worth in 2024 is $23.6 million and they are pulling in a whopping $12.9 million in annual revenue.
Yes, Cabinet Health is still in business in 2024. Their business is going strong and they generated a whopping $12.9 million in sales last year.
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