Kanga Koozie Cooler For Cases
DEAL
EPISODE SUMMARY
đź•“ Air Date: April 7, 2019
Asking For:
$100,000 for 10%
Investor:
Mark Cuban
Deal:
$100,000 for 20%
PRODUCT SUMMARY
Kase Mate, a patent-pending insulating sleeve for cold cases of beer or soda, keeping them cold for up to seven hours without ice.
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Background Story
Kanga, a dynamic company hailing from Clemson, South Carolina, was founded by a trio of enthusiastic entrepreneurs—Logan, Austin, and Teddy, affectionately known as Hops. These entrepreneurs didn’t just stumble upon their business idea; it was born out of a genuine need during their time at Clemson University. The spark for Kanga ignited during a class project where the founders were tasked with finding a solution to a personal problem. This particular inconvenience became apparent during spirited tailgating sessions in Clemson, where warm beer from a case was a recurring issue.
The trio, not content with conventional coolers and unwilling to sacrifice the convenience of carrying a bulky cooler for the mile-and-a-half trek to the tailgate, recognized the need for a novel solution. The breakthrough came when one of the founders observed someone using a can insulator for a single beer at a neighboring tailgate. This observation triggered a brilliant idea—why not have a similar insulator but for the entire case of beer? Thus, Kase Mate was conceived, a patent-pending insulating sleeve designed to envelop a cold case of beer or soda, ensuring it stayed refreshingly cold for up to seven hours, all without the hassle of ice.
The founders, driven by their shared entrepreneurial spirit and a determination to solve a common problem, embarked on this venture. Despite being college students facing financial constraints, they invested not only their time and energy but also $833 each into Kanga. Fast forward six months, and Kanga has achieved remarkable success, securing $103,000 in sales and gaining attention from industry giants like Anheuser-Busch. The journey of Kanga exemplifies the power of innovation born from practical challenges and the tenacity of founders dedicated to making a mark in the business world.
The Product
Kase Mate, the flagship product from Kanga, is a revolutionary solution for keeping your favorite beverages refreshingly cold without the need for ice or bulky coolers. This patent-pending insulating sleeve is ingeniously designed to wrap around a cold case of beer or soda, ensuring it stays chilled for an impressive seven hours.
The functionality of Kase Mate is elegantly simple. Users can effortlessly slip their cold case into the insulating sleeve, zip it up, and enjoy the luxury of consistently cold drinks during any outdoor activity, be it tailgating, camping, or simply a day at the beach. The product’s effectiveness lies in its unique combination of elements—a cardboard casing providing insulation, a watertight barrier liner preventing air exchange, and a foam layer adding an additional air gap.
Kase Mate is available for purchase through various channels. For individual consumers, the product can be bought directly from the company’s e-commerce platform, where a 12-pack is priced at $29.95, and larger 24- and 30-packs are offered at $34.95. Additionally, Kanga caters to custom wholesale orders, allowing businesses to feature their logos on the product at an average cost of $20 per unit. The affordability, convenience, and innovative design of Kase Mate make it a game-changer in the world of beverage cooling solutions.
How It Went
The company’s position before Shark Tank
In just six months since its inception, Kanga has exhibited remarkable health and positioning within the market. With $103,000 in sales, the company has showcased strong initial traction, emphasizing the appeal and utility of their flagship product, Kase Mate. Their strategic dual distribution approach has proven effective, with 30% of sales originating from their e-commerce platform and the remaining 70% generated through custom wholesale partnerships. Kanga’s key partners include a significant collaboration with Anheuser-Busch, the largest brewery globally.
This partnership has not only validated the product but has also resulted in a notable purchase order of $16,000, indicating industry recognition and potential for significant future orders if the initial test market proves successful. The company’s primary distribution channels include their e-commerce platform, which gained traction through a successful Kickstarter campaign, and a custom wholesale (B-to-B) route. Through the latter, Kanga collaborates with companies eager to feature their logos on the product, demonstrating a diversification strategy beyond direct-to-consumer sales.
Kanga’s customers span both individual consumers purchasing through their online platform and businesses seeking custom-branded solutions. The versatility of Kase Mate, suitable for various events and outdoor activities, has contributed to a broad customer base. In terms of funding, the founders, as broke college students, initially invested $833 each into the business. The company’s successful Kickstarter campaign and a recent purchase order from Anheuser-Busch have injected capital into the business, helping sustain its growth. Kanga’s current structure involves a collaborative effort from the founding trio—Logan, Austin, and Teddy—each contributing their skills and dedication.
The Negotiations:
In the high-energy Shark Tank negotiation, the Kanga team, comprised of Logan, Austin, and Teddy (Hops), entered seeking a $100,000 investment for a 10% equity stake in their innovative product, Kase Mate. The Sharks were quick to point out the competitiveness of the beverage cooling market, expressing concerns about the abundance of alternatives.
As the founders presented their case, highlighting the product’s success with $103,000 in sales within a short six-month period and a strategic collaboration with Anheuser-Busch, Mark Cuban saw potential and made a bold offer. Cuban proposed a $100,000 investment but requested a higher equity stake of 20%. The founders, recognizing the value that Cuban brought to the table, were swift in accepting the offer with genuine enthusiasm, exclaiming, “You got a deal! Let’s do it!” The deal was sealed with a handshake, and Cuban welcomed them to the Shark Tank family.
Mark Cuban’s offer marked a departure from the initially sought-after 10% equity, but the founders deemed the partnership and expertise he brought to be worth the increased equity share. The negotiation showcased the founders’ adaptability and their keen understanding of the value each Shark could provide. It also underscored Cuban’s strategic move to secure a more substantial stake in a business he believed had significant potential, given the founders’ impressive achievements and the product’s wide-ranging applications. The Kanga team’s journey from pitching their product to striking a deal with one of the Sharks exemplified the essence of entrepreneurial success on the Shark Tank stage.
