What really happened to iCapsulate? Why The biggest deal ever made on Australian Shark Tank failed?

In case you went through the Australian Shark Tank episode aired on 24th Feb 2017, iCapsulate (from Sydney) must be a familiar brand name for you. During that, The CEO of iCapsulate Kane Bodiam scored the biggest-ever deal in the Australian Shark Tank history (however the deal actually did not go through after the show).

The deal was to get a sum of 2.5 Million Dollars in exchange for 22.5% of the company’s equity. But, the Coffee pod company collapses after being offered the biggest-ever Shark Tank deal. The core reason why the deal actually didn’t go through was due to various controversies surrounding the claims made during the Shark Tank pitch.

The deal between iCapsulate and Andrew Banks, negotiated on Shark Tank Australia, did not go through, and subsequently, iCapsulate collapsed due to a combination of internal issues and misleading claims made by its founder, Kane Bodiam. Here’s a breakdown of why the deal fell through and why iCapsulate collapsed:

Why the Deal Between Andrew and Icapsulate Didn’t Go Through After Shark Tank?

In the History of Australian Shark Tank, Kane was the contestant to had the nerve to ask for the highest amount as an investment from Sharks (2.5M AUD).So he had to make some bold claims to support this ask.This lead the Sharks believe that there could be a great opportunity if invested with Icapsulate. Three Sharks Andrew,Naomi and Dr. Glen actually gave offers to Kane. Kane chose Andrew Banks who pledged to invest 2.5 Million AUD for 22.5%. Andrew had high hopes about Icapsulate. During the time Kane and his wife leaves the Tank, Andrew Says “I’m Gonna Have The Best Coffee In Town”.

It wasn’t the only one.

In the very beginning of the pitch Kane Bodiam claimed that the iCapsulate had developed the world’s first biodegradable coffee pods that are compatible with major single-serve coffee machines like Nespresso.

“We are the exclusive producers of biodegradable coffee pods.”

Kane Bodiam, During Icapsulate Shark Tank Pitch.

However,Post-pitch investigations revealed that iCapsulate was not the only company producing biodegradable coffee pods, nor were they the first. This sector already had established players and thus direct competitors such as Tripod Coffee which contradicted the exclusivity and pioneering innovation Bodiam had pitched.

Production Capabilities and Certifications were not very clear.

It was stated that iCapsulate had substantial production capabilities and was on track to receive a crucial certification from the CSIRO (Commonwealth Scientific and Industrial Research Organisation), supporting their biodegradable claim. Yet These certifications were never obtained, nor were the claims about their production capabilities verified. The deal between Andrew and Icapsulate had to put “on hold” as they were pending “confirmation that they had the competitive advantage in biodegradable capsules”, with testing being conducted by the CSIRO.

Over stated financials during the pitch

Bodiam presented iCapsulate as a financially robust company with significant market presence and high growth rate at a very short period of time (only 1.5 years in the business) , claiming a whopping AU$4 million in annual revenue and presence in major retail chains. “Last year, we did $4 million in sales.” Bodiam says casually during the pitch.

However These claims were later found to be overstated. The company did not have the extensive retail presence claimed, and questions were raised about the authenticity of the revenue figures Bodiam cited during the pitch.

Shockingly, It was revealed that iCapsulate was not in any recognizable retail chains at all.

Not just that. Icapsulate founder Kane Bodiam had a history of legal disputes, including a court case where he was accused of misleading and deceptive conduct against his former employer, a coffee company. This case highlighted issues with Bodiam’s credibility and by extension, Andrew Banks doubt on the trustworthiness of his business claims​​.

This ultimately lead Icapsulate and its founder Kane Bodiam to a bad reputation not just within the coffee industry but among the business community in Australia. Eight months after the initial agreement on Shark Tank, Andrew Banks withdrew his $2.5 million offer after due diligence failed in so many levels for Icapsulate.

What happened During The Shark Tank Pitch?

The CEO of iCapsulate Kane Bodiam pitched a “near perfect” business proposition for sharks requesting a whopping 2.5 million dollar investment for the exchange of 15% of the company.

During Kane Bodiam’s pitch, he sweetens his coffee pod business by stating that within just a few months in business Icapsulate coffee capsule produced around 35 Million coffee pods per annum. And he also boldly claimed that he has contracts with major coffee shops and vendors across Australia & New Zealand. He shocks the sharks by telling that they have 37.5 Million AUD in sales by the end of just one and a half years in Business.

Kane was immediately given three offers by the Sharks Glen,Naomi and Andrew Banks to choose from.

Kane, after discussing with her wife, decides to go with the Shark Andrew Banks. They agree on a mutual deal of 2.5 million dollars for 22.5% of the company after a little negotiation.

iCapsulate net worth in 2024

Although Icapsulate still stays as the second largest deal in Australian Shark Tank history during the show. The deal actually didn’t make it through due to failure in due diligence after the show. Ultimately iCapsulate went out of business. As of April 2024 iCapsulate’s net worth is 0$ since its no longer operational.

is iCapsulate still in business?

The Coffee pod company collapsed after being offered the biggest ever Shark Tank deal. We checked their official website to have a follow-up. but the iCapsulate official website isn’t showing. To our eyes, it seems like iCapsulate is closed and no more in Business.

Also Read: The ‘Hamdog’ Story – What has happened to hamdog now?

Also Read: what happened to Strange Grains after the shark tank

Collapse of iCapsulate.

Even after claiming the biggest deal in the Australian Shark Tank edition, iCapsulate went out of business just few years after the Shark Tank Appearance. As discussed earlier iCapsulate had failed to secure the investment at the end.

iCapsulate’s journey from a promising $2.5 million Shark Tank deal to its collapse into administration was marred by overstatements, internal conflicts, and a critical public and industrial response to its business practices. The company’s failure highlights the significant impacts of governance issues and the importance of accurate, transparent business representations in securing and maintaining investor confidence and market stability. This case serves as a cautionary tale for startups about the perils of rapid expansion without solid foundational support and the potential consequences of public accountability in the business world. For more detailed insights, the full article and further analysis are available here.

FAQ