Three coffee capsule producers, including a Smart50 alumnus, have penned a joint statement about the business that recently secured a record $2.5 million Shark Tank deal, calling into question representations made in the company’s pitch on the Network Ten show.
On Friday the director of Mad Coffee Capsules Charlie Stillisano, Coffee Caps director Tony Rubenstein and Smart50 alumnus and Podpac director Toby Strong released a statement in which they express the opinion iCapsulate founder Kane Bodiam made “highly questionable statements” during episode three of the program, in which he pitched to the sharks and secured a $2.5 million investment from Andrew Banks in return for a 22.5% equity stake.
The three coffee capsule producers claim that Bodiam told the sharks he has contracts with “Australia and New Zealand’s largest coffee companies”, but allege “we are not aware of a single major retail store in Australia from which a customer can purchase coffee capsules packed by iCapsulate”.
In a statement provided to SmartCompany, Toby Strong said the brands were concerned by “vague statements” in the pitch.
“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 says.
“We would appreciate the opportunity to clarify the market status quo in relation to contracts with major brands, which we believe were not represented accurately in the show.”
In a table included in the coffee companies’ statement, the directors of the three suggest none of the Nespresso-machine compatible coffee pods that are distributed by the big two Australian supermarkets are made by iCapsulate.
The directors also raise questions in the statement about the due diligence process of Shark Tank, welcoming the opportunity to discuss the pitch with Andrew Banks, Shark Tank Australia or Network Ten.
SmartCompany has attempted to reach iCapsulate founder Kane Bodiam this morning for a response to the letter and more information on the company’s distributor customers, but has not yet received a response.
Investor Andrew Banks is currently traveling in Europe and SmartCompany reached him for comment on Friday afternoon.
He confirmed due diligence is still underway for the $2.5 million deal, and that he is awaiting confirmation on the biodegradable status of iCapsulate’s products.
He will wait for all information needed for due diligence to be completed before signing the final cheque.
SmartCompany contacted Shark Tank producer Endemol Shine Australia through Network Ten.
“Endemol Shine Australia 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,” a spokesperson for Endemol Shine Australia said.
Get SmartCompany FREE to your inbox every weekday.
On its Facebook page this morning, iCapsulate thanked customers for support after its $2.5 million deal was revealed on Shark Tank this week.
It referred customers to Black Drum Roasters and Dingo Republic Coffee, who distribute the pods and deliver Australia-wide, the company says.
* This article was updated at 1:00pm on July 9 to include comment from Andrew Banks.