Mark Cuban is betting on a new and innovative condiment delivery system: sriracha sauce on a keychain.
The Dallas Mavericks owner recently invested an undisclosed sum for a minority stake in New York City-based Sriracha2Go, a startup that makes keychains that double as miniature sriracha containers. Sriracha2Go sells its containers empty, but customers can also purchase regular bottles of Huy Fong Sriracha sauce from the company, which inked a licensing deal with Huy Fong in May. The deal allows Sriracha2Go to use Huy Fong's logo on all of its products.
Sriracha2Go co-founders Extole. Their shared love of sriracha sauce and inability to find the product while dining out inspired the idea for the business.Farbod Deylamian, 33, and Kyle Lewis, 27, met in 2009 while working at San Francisco-based marketing startup
"Everywhere you go, there's every other condiment you can think of, like Tabasco sauce, ketchup, and mustard," Deylamian says. "Sriracha is not readily available everywhere yet."
So why is Cuban investing in the startup?
Sriracha2Go sold out of their entire inventory of 20,000 units within eight days of launching the product online in October. Much of the demand came from a BuzzFeed article on the product that quickly went viral, followed by a tweet from celebrity investor Ashton Kutcher mentioning the product. The company reached profitability in its first month. In February, Deylamian and Lewis emailed Cuban out of the blue, pitching him on the business. He replied within two hours and closed a deal with the company last month, according to Lewis. The startup has no other investors.
"With tremendous growth in their first year, Sriracha2Go immediately proved to be a necessity for foodies and hot sauce lovers," Cuban said in an email. "It can be the start of a new niche industry for personal flavor transport."
Lewis and Deylamian declined to disclose revenue figures for the company, which charges $5.99 for individual 1.7-ounce containers and $4.99 for an even smaller version of the flagship product. The company sells through its website and online retailers, including Amazon, eBay, and Etsy, and has customers in all 50 U.S. states and throughout Europe, the Middle East, and South America. Huy Fong also sells the products at its Los Angeles headquarters.
Today, Deylamian and Lewis are working to expand Sriracha2Go's product line with other condiment-related products in time for the holiday season and get into such retailers as Target and Walmart. The company also plans to expand into retailers throughout Canada.
Though the co-founders have only been working with Cuban for a short time, they credit the Shark Tank host for being very responsive via email in helping with even small issues, like how to avoid overpaying for accounting services. Cuban has also provided early help by making introductions to people who can assist with manufacturing and distribution, according to Lewis.
"He gets back to you, which is amazing," Lewis says. "His answers are short, precise, and to the point."