Shark Tank Australia recap: $60,000 social impact investment for Sock Drawer Heroes in season finale

A social impact investment stole the spotlight in the finale of Shark Tank Australia, with $60,000 in funding from Catriona Wallace providing Sydney business Sock Drawer Heroes with welcome support.

Sock Drawer Heroes is a trans and queer-owned retailer specialising in clothing, underwear and accessories for the transgender and non-binary community.

It is led by business and life partners Bec Cerio and Erin Spencer, who have been married seven years.

The venture focuses on products that affirm the wearer’s gender identity, helping them feel more comfortable in their own bodies.

Chest binders, singlet-like garments designed to compress and flatten breast tissue, are among the business’ biggest sellers.

Unlike other businesses that have appeared on Shark Tank Australia, Sock Drawer Heroes does not consider its customer base primarily as an addressable market.

Instead, Cerio and Spencer are themselves members of a tight-knit community which entrusts grassroots businesses like Sock Drawer Heroes to provide gender-affirming products.

Appearing before the panel, Spencer, who is trans and non-binary, said they were inspired to start the business partly due to their own difficulties finding suitable products in the local market.

Across its brick-and-mortar location in Petersham, Sydney, and its ecommerce site, Sock Drawer Heroes now carries over 800 distinct SKUs sourced from other trusted and queer-owned brands.

Those brands, and Sock Drawer Heroes’ own chest binder range, helped to generate $610,000 in revenue and net profitability in 2022, Cerio told the Shark Tank Australia panel.

To help the business thrive, Cerio and Spencer offered 7.5% of the business in exchange for $120,000 investment — and a commitment to genuine support from the successful investor.

Speaking to SmartCompany, Spencer said allyship was integral to any deal struck between the business and the Sharks.

“We wanted to be very clear to potential investors that we weren’t just going to sell out for a high bid,” Spencer said.

“We stick really close to our values, and that’s not going to change,” Cerio added.

“Just putting it up front was important to us, for ourselves, for the community, but also so if we did get a deal, that we ended up with the right person.”

The duo also acknowledged that intrinsic community focus makes Sock Drawer Heroes different to other enterprises that have appeared on Shark Tank Australia, which may view success as exponential growth or international expansion.

The decision to appear on the show was ultimately driven by two factors, Cerio and Spencer added.

First, outside investment would help Sock Drawer Heroes develop and expand its in-house chest binder range.

Secondly, the duo considered how appearing on a national TV broadcast could benefit viewers at home.

“If a young trans person sees a trans person on TV, on mainstream media, and sees that representation… and that allows a young trans person to see a future for themselves, that in itself is worth it regardless of any investments,” Cerio said.

That would be “the most important investment that we got out of this,” Spencer added.

While celebrating the business’ support to the trans and gender diverse community, investor Robert Herjavec turned down investment, citing the potential difficulties of refining Sock Drawer Heroes in-person, ecommerce, and production lines.

Davie Fogarty and Jane Lu also stepped away, citing their own experience of integrating outside brands with their in-house ecommerce operations.

For Sabri Suby, who cited Sock Drawer Heroes’ clear growth trajectory, the challenges of product development were enough for him to pull out.

That left Catriona Wallace, who agreed with the other investors — but tabled an offer for $120,000 of investment and 20% of the company, split between herself and Lu.

A moment’s thought saw Lu agree, but Cerio and Spencer, who did not want to part with more than 10% of the venture, countered with an offer of $120,000 for 15% equity.

That was shot down by Wallace, leading to quickfire negotiations between the parties.

Ultimately, the founders and Sharks agreed on $120,000 for 16% equity, split between Wallace and Lu.

Speaking to SmartCompany months after filming, Cerio and Spencer confirmed the deal has changed: Lu has contributed help in optimising Sock Drawer Heroes’ website, but has stepped away as a formal investor, leaving Wallace a stakeholder in 8% of the business for $60,000.

From a practical standpoint, the investment has allowed Sock Drawer Heroes smooth out its cash flow; many of its suppliers are small, queer-owned brands themselves, which are enduring their own unavoidable ebbs and flows in production.

At the same time, Wallace’s assistance as a social impact investor has helped Cerio and Spencer create useful space between themselves and the business they cherish.

Since filming, “we’ve really welcomed Cat into our queer family, which has been lovely,” Spencer said.

“But I think on a business perspective, it actually helps us to separate ourselves from the business… it gives us a much better perspective for how we can grow the business, and future planning for the business, and how as that grows, we can prioritise future plans for what we want to do.”

Development of its new chest binder range, which will cover a wide variety of sizes, skin tones, and sensory needs, is now well underway.

Sock Drawer Heroes was not the only enterprise to secure a handshake deal in the final episode of the show’s fifth season.

Perth entrepreneur Stephanie Bream is the innovator behind Sundust, a sunscreen line which includes biodegradable glitter.

She secured $100,000 from Herjavec in exchange for 75% of the business’ American wing, with the investor claiming it was more of a distribution deal compared to a traditional equity split.

Luke Kyriazis and Daniel Reid, creators of profitable online suit hire business Suitor, buttoned down both Suby and Fogarty in a handshake deal worth $250,000 for 15% equity.

Brandscent, a B2B enterprise offering customised fragrances to brands, secured real interest from both Herjavec, Suby, and Fogarty.

Ultimately, the business walked took Herjavec’s deal, handing over 25% equity in exchange for $175,000 — a greater sum than its founders initially sought.