'Shark Tank' contestant's product gets called out a 'cheater's app', then bags a $70,000 deal
Entrepreneurs on "Shark Tank" usually win investments for products and services that solve everyday problems in an innovative manner. But there are times when they go a step ahead and solve issues that people create for themselves. That's what the founder of the CATE App, a.k.a the "Call and Text Eraser App," purported to do for cheaters. As the name suggests, it allowed users to discreetly take calls and messages. Pitched by Neal Desai, who didn't mind Robert Herjavec calling it the cheater's app, the venture managed to get a $70,000 multi-Shark deal from Kevin O'Leary and Daymond John.
Desai entered the Tank seeking $50,000 for a 5% equity in his business. During his pitch, he explained how relationships are being destroyed over people trying to cheat, and there was a need for an app that helped people stay discreet. Thus, to help people keep their call logs and texts private, the CATE App allowed users to make a list of people whose calls and texts would be completely hidden within it. He shared that the app had 5,500 subscribers at the time, and it cost $4.99 per download. He added that the app had amassed $27,000 in revenue, and he needed help to scale.
While Desai called it a privacy app and insisted it helped people keep their lives together, the Sharks decided to call out moral issues as soon as the pitch was done. "Well, let's call a spade a spade. It's a cheater's app," Herjavec said. "I'm okay with that. It's a cheater's app," Desai said in response.
While the entrepreneur handled things candidly, it wasn't enough. Mark Cuban dropped out soon, saying he didn't like what the app did, and Herjavec followed his lead. However, O'Leary seemed the most interested as he claimed to have a friend who was the owner and proprietor of "a website that promotes cheating." Thus, he made an offer of $50,000 for 50% and was joined by Daymond John later as a partner in the same deal. Barbara Corcoran threw her hat in as well, offering $50,000 for 30%.
Desai went back and forth with the sharks for a while. Eventually, he managed to get John and O'Leary to drop to 35% and increase the amount to $70,000. With the terms set, Desai agreed to the deal and struck a multi-Shark partnership.
According to SlashGear, the deal with John and O'Leary was never closed for the CATE App. However, the service did witness an uptick in downloads after the episode was aired, adding 10,000 new users. While the app was performing well in the 2012-2013 period, everything soon went silent by the end of 2014.
More on Market Realist:
'Shark Tank' contestants wanted $250,000 for their banana phone — and it went as expected
'Shark Tank' contestants take Kevin O'Leary for a bicycle ride — win $200,000 deal with two judges
'Shark Tank' contestants value their business at $10 million — but fail to convince a single judge
