Amrita Saigal, founder of Kudos, bought diapers

In 2012, Amrita Saigal quit her dream job.

After working as a Procter & Gamble engineer for two years, the MIT and Harvard University graduate didn’t understand why the company made sanitary napkins and diapers with harsh chemicals.

So she quit her job and moved to India, where she built a company called Saati around a sanitary napkin made from banana peel fibers, which she invented at MIT. After six years, she returned to the US doubting that she could make a better diaper.

In 2021, she 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,” she made 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 importantly, its sales. The accolades brought in $850,000 in revenue in the first year of business, Saigal said on the show.

Investors also liked Saigal’s entrepreneurial experience and her willingness to take the risk of sacrificing job security to pursue an idea.

“I saw first hand how much plastic we put in sanitary napkins and diapers,” Saigal explained. “I decided to quit my stable job and move to India to start my first company.

Before appearing on the show, Kudos had raised $3.3 million on its $12.5 million haul. Saigal used that figure to ask the Sharks for $250,000, in exchange for 5% of the company.

Kevin O’Leary wasn’t convinced that Kudos’ product would succeed in the rodent industry. “This is a very mature market,” O’Leary said. “Do you really think that after you get, say, 4 or 5% of the market, they’re not going to wake up and say, ‘We need eco-friendly diapers?’

The accolades represent a void in the industry, replied Saigal. Plus, she 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, according to the report.

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 and adult sanitary products.

“We have to figure out how to make this product known,” she said. “We need to expand to other online retailers. We know that the Goop audience is very, very aligned [and] has shared values.”

This increased the interest of the Cubans. He asked Paltrow if she would be interested in a joint partnership.

Negotiations went quickly: the couple offered Saigal $250,000 for 12%. Saigal asked if they would be willing to share 8%, and Cuban said they would go down to 10%, with some share in the adviser’s shares.

Saigal proposed 7% equity with a 3% advisor stake, and Cuban and Paltrow accepted. Saigal said she was ecstatic that Kudos’ products aligned with Paltrow’s lifestyle brand, Goop.

Investors also expressed optimism. Cuban told Paltrow he thought Saigal was a “star” with a “dynamic pedigree.”

“You’ve got to bet on 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 market.”

Disclosure: CNBC owns exclusive offline cable rights to “Shark Tank.”

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