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Matt and Angie Mundt walked into the Shark Tank studio seeking $150,000 for 10% equity in their sleep pod business, Hug Sleep. Their product, a stretchy cocoon made from 89% polyester and 11% lycra, applied gentle pressure to help users sleep better without the heat problems of weighted blankets.
The Wisconsin couple started their business with just $2,500 and generated pre-show sales of $490,000 in only 16 months. When Mark Cuban and Lori Greiner teamed up during the pitch, Robert Herjavec then turned to address his fellow Sharks.
"If you guys are teaming up and kicking us to the curb, Kevin, Daymond, will you come in because I think three Sharks is better than two," Robert said.
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This created an unusual five-Shark bidding war, split into two competing teams with identical offers. Ultimately, the entrepreneurs accepted Mark and Lori’s offer.
All five sharks split into two teams during tense Hug Sleep negotiation on Shark Tank
As Matt explained the Sleep Pod's benefits, the Shark Tank investors began asking detailed questions about the business model. The Mundts revealed they sold each pod for $89.99, with manufacturing costs allowing for healthy profit margins. Their Sleep Pod was available in three sizes based on height and weight, with machine-washable fabric that required no special care.
They explained how Matt had struggled with sleep issues since college, which worsened during his professional career. His solution came through research on compression therapy, leading to the creation of the Sleep Pod. This personal story resonated with the Sharks, who saw authentic passion behind the product development.
When discussing marketing strategy, the Mundts described how they maintained low customer acquisition costs through targeted social media campaigns. This efficient approach allowed them to maximize profitability while scaling their business organically. The Sharks were impressed with them and praised their business fundamentals.
Robert Herjavec volunteered to test the product firsthand, slipping into the stretchy cocoon on the studio floor. He praised the comfort of the product afterwards. Lori Greiner also tried the product and shared a similarly positive experience, noting how the gentle compression created a calming sensation. The demonstrations convinced the Sharks of the product's effectiveness, leading to a flurry of individual offers from each investor.
As negotiations intensified, Mark Cuban turned toward Lori Greiner.
"Lori, do you want to team up?" Mark asked.
She quickly agreed, and together they presented an offer of $300,000 for 20% equity in Hug Sleep.
When Robert Herjavec watched this team formation, he immediately asked if Kevin and Daymond would team up with him. Kevin O'Leary and Daymond John agreed to Robert's proposal. The three Sharks then combined forces and matched Mark and Lori's offer exactly: $300,000 for 20% equity.
After discussions, Matt and Angie agreed to Mark and Lori's offer of $300,000 for 20% equity, and both Shark Tank investors accepted the deal immediately.
Post-show success
The deal with Mark and Lori officially closed after the show. After the episode aired, Hug Sleep experienced an overwhelming flood of orders, per Shark Tank Blog. The company's sales reached $4 million within three months of the episode's broadcast.
By March 2021, just months after their television appearance, Hug Sleep expanded their product line with the Sleep Pod Move, a modified version that allowed users to extend their feet through the bottom. This innovation addressed feedback from customers like Robert, who had experienced mobility challenges with the original design.
The company continued to grow steadily, adding hooded sleep pods and specialized loungewear to their offerings. The expanded product line helped Hug Sleep reach new customer segments while maintaining their core focus on compression therapy for better sleep.
By October 2022, Hug Sleep had accumulated lifetime revenue of $15 million.
Fans can watch new episodes of Shark Tank on ABC network.
