Coffee pod supplier iCapsulate was offered $2.5 million on TV’s Shark Tank, but on Saturday it will be offered for sale by a liquidator.

ICapsulate made headlines in July 2017 when Morgan & Banks founder Andrew Banks pledged the cheque to Kane Bodiam for 22.5 per cent of his business, the biggest on-camera deal in the four-season history of Network Ten’s Shark Tank.

However, Mr Banks never followed through on the investment, after doubts were cast on Mr Bodiam’s claim that iCapsulate had a competitive advantage in biodegradable coffee pods.

Mr Bodiam now also appears to have fallen out with his business partner Peter Draper, one of the trio who bought Fantastic Furniture out of liquidation in 1996 and listed it on the ASX. Shark Tank’s Andrew Banks with Kane Bodiam, before their $2.5 million investment deal fell through. Mr Draper commenced litigation in the Supreme Court of NSW last week over a business dispute with Mr Bodiam, but after mediation on Monday an agreement was made to place the business in voluntary administration and appoint a liquidator.

The appointee, Andrew Barnden of Rodgers Reidy, said iCapsulate did not appear to be insolvent and would continue trading. However, he said the standard administration process would still be followed, with a marketing campaign to commence on Saturday ahead of a first creditors’ meeting next Thursday. Regulatory filings show entities associated with Mr Bodiam own 75 per cent of iCapsulate, which is backed with $500,000 of paid share capital, and Mr Draper the balance.

Mr Barnden said a management buyout of the business looked to be a possibility, but said informal expressions of interest had come from third parties.

Dropped the deal

ICapsulate is one of four major players in Australia’s coffee pod market. The founders of the other three, Mad Coffee Capsules’ Charlie Stillisano, Coffee Caps director Tony Rubenstein and PodPac’s Toby Strong, issued a statement after the Shark Tank episode aired, claiming Mr Bodiam had made “highly questionable statements” on the show.

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

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

Mr Banks told News Corp in March he had dropped the iCapsulate deal after getting industry insights from his friend, Vittoria Coffee boss Les Schirato.

“It was [a shame], because their revenues were getting close to $15 million [in 2016-17] and $21 million the next, they had a reasonable business. They still [do], they just don’t have my money,” he said.

Mr Bodiam refuted Mr Banks’ claims at the time, insisting he had dropped the Shark because he was moving too slow on the deal. He did not respond to a request for comment by The Australian Financial Review, and Mr Draper was unable to be contacted.

Mr Bodiam had praised Mr Draper as “an amazing mentor” in an interview before the Shark Tank deal went sour.

“I like that for all his amazing successes he is down to earth and we can have a beer after a hard day and make plans to make an new project,” Mr Bodiam said.

“He doesn’t tire of my ideas, and has supported me with everything I wanted to do.”

 

Article via Financial Review on 13 Sept. 2018 https://www.afr.com/leadership/entrepreneur/icapsulate-shark-tanks-biggest-deal-company-in-administration-20180913-h15b77