Mark Cuban hops onto a deal with Kanga Kase Mate
As the season of warmer weather approaches, many begin to anticipate days filled with traveling to the beach and soaking up the sun. Spending a lot of time in the heat causes many to purchase coolers and fill them with drinks to keep themselves hydrated on sunny days.
Episode 18 of Season 10 showcases a product that offers a simple solution to this scenario that causes viewers to ask themselves, “Why didn't I think of that?”
Clemson students Logan LaMance, Austin Maxwell and Teddy Giard hopped into the tank asking for $100,000 in exchange for 10% of their product which they hope will be the go-to solution for those that have struggled through the absolute tragedy of their drinks getting warm.
The trio pitched their company, Kanga as a solution to a problem that they faced while walking to tailgates at Clemson home games. The pitch began by pointing out that traditionally, drinks have been kept in either large, heavy coolers that cost hundreds of dollars or Styrofoam coolers that are likely to break.
This is when the group introduced their flagship product, the Kase Mate, an insulating sleeve made to wrap around the case of your favorite beverage. The Kase Mate provides the user with a lightweight case that gives you easy access to your beverages and keep them cold for 7 hours without ice. The Kase Mate utilizes a patent-pending, three-layer insulation system that acts as a watertight barrier and keeps air from entering or leaving. All the customer has to do is keep the Kase Mate in the refrigerator, place it over the case of their drink of choice, zip it up and carry it to their destination.
The group then handed custom Kase Mates to the sharks which allowed Kevin O'Leary to point out the Velcro pouch at the top that gives the user easy access to their drinks. After toasting to 10 years of Shark Tank, Mr. Wonderful also pointed out the popularity of products that are designed to keep beer cold and asked about the company’s sales. The entrepreneurs were proud to boast their $103,000 in sales over 6 months of operations.
This caused Mark Cuban to ask about where the company has been selling this product. Austin, the company’s head of sales, explained their two main distribution channels. E-commerce which serves as 30% of sales and the remaining 70% in B2B or as they call it, “custom wholesale,” where businesses pay to have their logo on their Kase.
When Lori asks about how this product came to be, Founder and CEO Logan, explained that he thought of the idea in a business class at Clemson that tasked the students to create a solution to a problem they were facing. Logan stated that on game day, him and his friends were drinking warm beer even after taking it out of an expensive cooler. He then illustrated that students usually walk 1.5 miles to get to tailgates and that people have to either haul large, bulky coolers or stop at a convenience store on the way and drink the beer as it gets warm. After noticing someone at a separate tailgate take a beer from a cooler and put it into an insulated sleeve, Logan began to wonder why there isn't a similar option for the entire case and thus, the Kase Mate was born.
After explaining that he's made a deal with every beer and alcohol company that has come into the tank, Mark Cuban showed his interest in the company almost immediately. He offers the group a non-negotiable $100,000 investment for a 20% stake. The trio accepted Cuban's offer and flipped their way out of the tank with funding to take their product to new heights.
The potential that Kase Mate has is very clear with the combination of great margins and a product that can appeal to a vast population. Landed costs equate to $9.60 altogether with a selling point of $29.95-35.95 which allows Kanga to achieve profit with every sale. In addition, the risk for this company is minimal as the founders only put in $830 each to get the company going along with a Kickstarter campaign that reached $35,000 in 60 days.
The group seemed to appeal to the Sharks more after diving deeper into the B2B side of their business model. They stated that they have received a purchase order from Anheuser-Busch, the largest brewery in the world, for $16,000 worth of product as a test run with the potential of buying 10,000 units if the trial goes well.
The customization side of their model seems to be the best avenue for Kanga as many companies could use the Kase Mate as gifts or promotional material. Especially with the backing of Mark Cuban, we could potentially see sports teams putting their logos onto Kase Mates and using them at games.
Currently, Kanga only offers customization for orders of 300 units minimum, so if they can continue this for businesses and offer customized units that can be bought individually for gifts, the group can expect to achieve significant growth quickly.
The guys at Kanga serve as inspiration for many entrepreneurs that seek to solve a common problem.