Record Shark Tank investment sparks Australian coffee pod wars

KANE Bodiam won a record $2.5 million dollar investment but his competitors aren’t happy. They say something smells fishy.

THE biggest investment secured by a contestant on Australia’s Shark Tank program on Channel Ten has sparked a war of words among the country’s coffee pod makers.

On Tuesday night’s episode Kane Bodiam, 36, scored a $2.5 million deal for a 22.5 per cent stake of his iCapsulate coffee company.

One of the show’s judges and “shark” entrepreneur Andrew Banks agreed to the deal after listening to a two-hour presentation about the company that claims to produce Australia’s first biodegradable coffee pods.

But the rest of the Australian coffee pod industry has come out against the iCapsulate boss, effectively saying Mr Bodiam has jumped the shark.

In a joint letter, the heads of the three largest manufacturers of Nespresso compatible capsules in Australia questioned the statements made by Mr Bodiam on the show.

The director of Mad Coffee Capsules, Charlie Stillisano, the director of CoffeeCaps, Tony Rubenstein and the director of Podpac, Toby Strong, also suggested Network Ten failed to do the appropriate due diligence on Mr Bodiam’s business.

“We think that Kane made some highly questionable statements during Episode 3, and Andrew Banks, Shark Tank Australia and Network Ten deserve to know the facts,” they said.

Their main concern centred on the claim by Mr Bodiam during the episode that he has contracts with “Australia and New Zealand’s largest coffee companies”.

When asked by potential investor Naomi Simson whether that included “all the big coffee brands that we would know?”, Mr Bodiam replied “yes”.

“Our industry is small here in Australia, with only four manufacturers of significant size; Mad Coffee Capsules, CoffeeCaps, Podpac and iCapsulate. All four of us have made significant capital investments in the millions of dollars, but only three of us have been successful in winning significant contracts,” the letter said.

“The odd one out is Kane Bodiam of iCapsulate.”

The Nespresso compatible brands currently available from Coles and Woolworths include Woolworths private label, Coles private label, Vittoria, Grinders, Republica, Pod-a-licious, L’OR, Lavazza, Cafe Royal.

However, according to the letter, none of these are manufactured by iCapsulate.

“In fact, we are not aware of a single major retail store in Australia from which a customer can purchase coffee capsules packed by iCapsulate,” they wrote.

“What is most concerning to us, is the seeming lack of due diligence conducted by Shark Tank Australia prior to Andrew Banks striking the biggest deal in Shark Tank Australia history. We are led to believe these are Australia’s top entrepreneurs, so we are stunned that they could be so easily persuaded.

“In our opinion, Andrew Banks was taken hook, line and sinker.”

The heads of the three companies — in direct competition with iCapsulate — said the letter was motivated by a desire to ensure “our industry is represented in the most professional way.”

A spokesperson from Endemol Shine Australia, the production company which produces Shark Tank, told news.com.au that it “conducts thorough checks before our entrepreneurs enter the tank, and, after the program airs our Sharks manage full due diligence checks prior to deals being finalised.”

The spokesperson was unable to comment on whether the deal between Andrew Banks with Kane Bodiam was finalised.

News.com.au has sought comment from Mr Bodiam.

Investor Andrew Banks with Kane Bodiam from iCapsulate.

While the Shark Tank success has the potential to make Mr Bodiam a household name and take his business to the next level, it remains to be seen how iCapsulate will benefit from Mr Banks’ $2.5 million capital and business acumen, provided the deal goes through.

On Friday it was reported that Mr Bodiam had previously been found by a court to have misrepresented his position at former employer Mad Coffee Capsules, one of the companies featured in the letter against the iCapsulate boss.

A Sydney court ruled in 2015 that he’d made false claims about his role at his former workplace, Mad Coffee Capsules.

Mr Bodiam claimed on his Facebook and LinkedIn pages that he established and ran Mad Coffee Capsules, which Justice Richard White found was misleading conduct.

“Kane Ronald Vasudevan Bodiam engaged in misleading and deceptive conduct by publishing the messages,” according the judgement issued on October 2, 2015.

Mr Bodiam told The Daily Telegraph he had been victim of a “smear” campaign.

He told the paper he filed no defence in the case because it would have been a waste of money.

“It comes down to it was a simple waste of money arguing this in court, which I realised they wanted me to do. There was nothing false and misleading about the statements.”