iCapsulate landed the biggest Shark Tank deal ever, a year later it was dead

Back in 2017, coffee pod company iCapsulate landed the biggest deal in Shark Tank Australia history. But in just over a year, the tables would drastically turn.

Things were looking great for iCapsulate when shark Andrew Banks offered the company $2.5 million for a 22.5% stake in the company.

A battle played out before this, with Banks originally wanting a 40% stake and Naomi Simson countering with the same offer for just 33.3%.

However, the deal never happened. Eight months after the deal was originally filmed, it was still going through the due diligence process.

iCapsulate came under fire right after Shark Tank aired

The company was marred in controversy just days after its Shark Tank episode originally aired. A joint statement was released by the director of Mad Coffee Capsules Charlie Stillisano, Coffee Caps director Tony Rubenstein and Podpac director Toby Strong raising serious concerns.

The industry professionals claimed that iCapsulate founder Kane Bodiam had made “highly questionable statements” during the show.

In particular, they highlighted Bodiam’s claim that he already had contracts with “Australia and New Zealand’s largest coffee companies”.

“We are not aware of a single major retail store in Australia from which a customer can purchase coffee capsules packed by iCapsulate,” the statement read.

“We were concerned by the number of vague statements made during Kane’s pitch, which we believe do not reflect the true state of our industry. Most particularly, in relation to existing contracts in the marketplace,” Strong said to SmartCompany at the time.

Due diligence failed and iCapsulate entered voluntary administration

The trio also raised concerns around the due diligence process at the time over iCapsulate’s claims of biodegradability. When this story broke, Andrew Banks confirmed with SmartCompany that due diligence on the investment offer was still under way.

In the end, it failed and the deal didn’t go through.

“It didn’t go because on the show you’ll remember they said, ‘we are the exclusive producers of biodegradable coffee pods and the CSIRO will validate that soon’,” Banks said in March 2018.

“And guess what? They didn’t, and they aren’t. So for 2.5 million bucks I wasn’t going to risk that. It was [a shame], because their revenues were getting close to $15 million that year and $21 million the next, they had a reasonable business. They still [do], they just don’t have my money.”

Bodiam disputed the claims by Banks at the time, saying they were false and that iCapsulate made the decision to drop the deal.

“They stopped communicating so we stopped communicating. It was just moving slowly and we were moving quite quickly. We made a decision probably two or three months after we met Andrew that we were just going to go it alone,” Bodiam said.

By September 2018 — just 14 months after the episode aired — iCapsulate went into voluntary administration and never recovered. Bodiam is now listed as the owner of the National Barista Academy on LinkedIn and as the global beverage development manager at Immersed Marketing.

And this entire saga goes to show that scoring a deal on Shark Tank doesn’t guarantee success. And if a company does get that chance, its claims need to stack up.

Read more about Shark Tank Australia here.