Feb 16, 2023

Cabinet Health made a deal with Tony Xu and Kevin O'Leary on Shark Tank. The founders of Williamsburg-based Cabinet Health pitched their vision for a sustainable alternative to plastic pill containers on a recent episode of the popular television series Shark Tank. "We're on a mission to eliminate single-use plastic," co-founder Russel Gong said on the show. "Did you know that the medicine industry produces 190 billion single-use plastic medicine bottles every single year?" His co-founder, Achal Patel, added, "Of all of those bottles, only 3 to 7% are recycled; the rest end up in our oceans, our landfills and eventually our bodies." Related They presented an ambitious pitch: $500,000 for 2.5% equity in the company. Some of the "sharks" were intrigued by the idea, but none were willing to bite at that level of equity. A bit of back-and-forth bargaining eventually led to a deal with Tony Xu and Kevin O'Leary that secured the investment but at an increased 7% equity and 2% royalty. Cabinet Health's product is simple. Customers place orders online for generic prescriptions, over-the-counter medicines and supplements. The initial order comes with various reusable bottles made from recycled glass. Subsequent orders are then packaged in compostable pouches, which the customers can then transfer to their reusable bottles for storage. Cabinet, which was founded in 2018 and has raised roughly $24 million to date, offers about 200 prescription medications in pilot. The company will officially offer prescriptions later this year and hopes to make more medicines while expanding into pharmacies on a large scale so customers can purchase their products directly from their local stores, Gong said. Courtesy of Cabinet Health Customers can also purchase Cabinet products from Amazon and Grove Collaborative. The company announced in December that it had raised a $17 million funding round . Gong said that funding would go toward getting Cabinet’s products into retailers and pharmacies around the country and scaling the business’s prescription manufacturing capabilities. Cabinet Health's fundraising success comes after much of the city's digital health sector experienced something of a “reset year" in 2022, with 141 companies raising a little less than $4 billion for the entire year, according to a recent report from Digital Health New York. The New York health care innovation report, released last week, shows that funding and deal volume declined throughout 2022. In the first quarter 50 deals raised $1.3 billion, 35 deals garnered $1.1 billion in the second quarter, 34 deals brought in almost $900 million in the third quarter, and 23 deals in final quarter raised a bit more than a half-billion dollars.