Dylan’s Candy Bar: Say the secret password, “National Ice Cream Day,” at the register for a free scoop from 2-4 p.m.
Dylan’s Candy Bar: Say the secret password, “National Ice Cream Day,” at the register for a free scoop from 2-4 p.m.
Hello and welcome back to Startups Weekly, a newsletter published every Saturday that dives into the week’s most noteworthy venture deals, fundraises, M&A transactions and trends. Let’s take a quick moment to catch up. Last week, I wrote about an alternative to venture capital called revenue-based financing and before that, I jotted down some notes on one of VCs’ favorite spaces: cannabis tech. Remember, you can send me tips, suggestions and feedback to email@example.com or on Twitter @KateClarkTweets.
This week, I want to share some thoughts — questions, rather — on beverages. Just as my inbox has been full of cannabis-related pitches, it’s also been packed with descriptions of new…drinks. Perhaps the most noted so far is Liquid Death, canned water for the punk rock crowd, because why not? Liquid Death has attracted nearly $2 million in funding from angel investors like Away co-founder Jen Rubio and Twitter co-founder Biz Stone. Before I tell you about a few other up-and-coming beverage makers, I must beg the question: Does the beverage industry need disrupting?
Founders say yes. Why? For one, because millennials, according to various studies, are consuming less alcohol than previous generations and are therefore seeking non-alcoholic beverage alternatives. Enter Seedlip, a non-alcoholic spirits company, for example. Or Haus, launching this summer, an all-natural apéritif distilled from grapes that has a lower alcohol content than most hard liquors. Haus, like any good consumer startup in 2019, is shipped directly to your door.
Bev, a canned wine business that recently raised $7 million in seed funding from Founders Fund, thinks marketing in the alcohol industry is the problem. Founder Alix Peabody designed a line of female-focused canned rosé. If you’re wondering why alcohol needs to be gendered in such a way, you’re not alone. Peabody explained most alcohol brands cater to men, and that’s a problem.
“The joke I like to make is there’s a go-to type of alcohol for every type of bro and we just don’t have that for women,” Peabody told TechCrunch earlier this year.
Finally, the wellness movement is taking over, driving VCs toward some odd upstarts. From wellness chat and journaling apps to therapy substitutes to fitness companies, stick wellness in a pitch and investors will take a second look. More Labs, for example, is backed with $8 million in VC funding. The company is readying the launch of Liquid Focus, a biohacking-beverage that claims to “solve modern-day stressors without the negative side effects.” Finally, Elements, “an elevated functional wellness beverage formulated with clinical levels of adaptogens to give your body exactly what it needs in four categories (focus, vitality, calm, and rest) for specific cognitive functions” (damn, what copy), recently launched. It doesn’t appear to be funded yet, but let’s just give it a few months.
There’s more where that came from, but I’m done for now. On to other news.
I almost skipped IPO corner this week because no big-name companies dropped or amended their S-1s or completed a highly anticipated IPO, as has been the case basically every week of 2019. But I decided I better give a quick update on Luckin Coffee’s tough second week on the stock market. Luckin Coffee, if you aren’t familiar, is Starbucks’ Chinese rival. The company raised more than $550 millionafter pricing at $17 per share a little over a week ago. Immediately the stock skyrocketed 20 percent to a roughly $5 billion market cap; then came concerns of the company’s lofty valuation, major cash burn and uncertain path to profitability. Luckin has dropped around 25 percent since closing its debut trading day. It closed Friday down 3 percent.
Y Combinator, the popular accelerator program and investment firm announced this week that it has promoted longtime partner Geoff Ralston to president. This comes two months after former president Sam Altman stepped down to focus his efforts full-time on OpenAI. The promotion of Ralston is an unsurprising choice for YC, an organization that employs roughly 60 people, many of whom have been affiliated with it in one way or another for years.
The Los Angeles ecosystem is $76 million stronger this week as Fika Ventures, a seed-stage venture capital firm, announced its sophomore investment fund. Fika invests roughly half of its capital exclusively in startups headquartered in LA, with a particular fondness for B2B, enterprise and fintech companies. The firm was launched in 2017 by general partners Eva Ho and TX Zhuo, formerly of Susa Ventures and Karlin Ventures, respectively. The pair raised $41 million for the debut effort, opting to nearly double that number the second time around as a means to participate in more follow-on fundings.
DoorDash raises $600M at a $12.7B valuation
TransferWise completes $292M secondary round at a $3.5B valuation
Auth0 raises $103M, pushes its valuation over $1B
Canva gets $70M at a $2.5B valuation
Payment card startup Marqeta confirms $260M round at close to $2B valuation
Modsy scores $37M to virtually design your home
Sun Basket whips up $30M Series E
Zero raises $20M from NEA for a credit card that works like debit
Nigeria’s Gokada raises $5.3M for its motorcycle ride-hail biz
Our premium subscription service had another great week of interesting deep dives. This week, TechCrunch’s Lucas Matney went deep on Getaround’s acquisition of Drivy for his latest installment of The Exit, a new series at TechCrunch where we chat with VCs who were in the right place at the right time and made the right call on an investment that paid off. Here are some of the other Extra Crunch pieces that stood out this week:
If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase News editor-in-chief Alex Wilhelm and I discuss how startups are avoiding IPOs and VC’s insatiable interest in food delivery startups.
In the past five years, Elvie and Willow have transformed the breast pump market, raising a combined total of nearly $90 million and wooing moms with technological updates to make breastfeeding while working a less intimidating prospect.
But even a Silicon Valley breast pump can’t make breastfeeding work for everyone. For reasons ranging from health of the mother or baby to milk supply and blocked milk ducts to work schedules, many mothers find breastfeeding out of reach. Founders and investors are on to the next logical category: infant formula.
“We are not accepting the realities of feeding your child in today’s world,” says Laura Modi, co-founder of a new infant formula startup, Bobbie. “Fifteen to 20% of women physically cannot produce enough breast milk to exclusively breastfeed.”
Bobbie, launching this Sunday on Mothers’ Day, raised $2.4 million to debut an infant formula formulated to resemble the more stringently regulated formulas sold in Europe. Made without corn syrup or soy—ingredients in the most widely available U.S. brands—the formula will be sold through a subscription service at $23 a box, with most families using four boxes a month. It’s a concept Modi, former director of hospitality at Airbnb, developed when she found she couldn’t breastfeed and felt embarrassed buying formula at the drugstore.
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While Modi and co-founder Sarah Hardy aren’t necessarily trying to eat into the smart breast pump market, they are taking a cue from its success, and cited that success when pitching to investors. “We learned a lot from their approach in this market,” Modi says. “I don’t think we’ve come across any parent whose story or feeding journey looks like anyone else’s.”
Instead, Bobbie is going after a separate category: mothers who can’t breastfeed and have so far either gone with mass-market products or tried to import better-quality formula from abroad. It’s a market that’s quickly catching the eye of investors, with competitor Nara Organics set to debut soon, and with both companies joining the 10-year-old Medolac, which makes donor milk-based products.
The product falls squarely into two popular investor categories of the moment: millennial parenthood and changing food supply, says Greg McAdoo, partner at Bobbie’s lead investor, Bolt Capital. “Consumers read labels now. Until millennials started having kids, it didn’t matter much in the world of food for babies and food for kids. Now that millennials are having kids, they’re applying the same sensibility to the food that they buy for their kids,” McAdoo says.
Indeed, startups have already dived into baby food, from Little Spoon to Jennifer Garner’s Once Upon a Farm. Formula is a more complicated product—one that comes with both stigma and regulation. “We are entering a space we know is stigmatized,” Modi says. “It’s really important for people to understand where we’re coming from. We’re not trying to get people at the hospital bed.”
Bobbie’s subscription service will only be available in the San Francisco Bay Area for now, but the founders hope to go national in the fall. The company will have “milkmen” who deliver the product to first-time subscribers. And the typical Silicon Valley model of content alongside a subscription makes sense for a product often surrounded by misinformation and lobbying groups, says Vanessa Larco, an investor with NEA who hasn’t invested in Bobbie but has spent time researching the formula space
The early backer of Facebook, Airbnb, Lyft and Spotify wants to cash in on rosé all day.
Founders Fund, the San Francisco-based venture capital firm founded by billionaire Peter Thiel, announced Tuesday that it has led a $7 million investment round in Bev, a woman-run canned rosé startup based in Los Angeles. Other private investors include DJ duo The Chainsmokers and Facebook’s vice president of social good.
It’s the firm’s first investment in an alcohol company. But partner Lauren Gross says it’s really a bet on Alix Peabody, Bev’s 28-year-old founder and CEO. “We’re founder-driven,” Gross recently told Forbes. “While we’re often rooted in hard tech, we truly are a generalist firm. It’s really about investing in any founder that can build in any sector.” Gross says Peabody stands out for being particularly “bright and authentic.”
Peabody’s story started four years ago, after a stint at hedge fund Bridgewater and later a San Francisco tech recruiting company. Then, at 24 years old, she suddenly went into organ failure.
As her health stabilized, she decided to freeze her eggs. But since the lengthy process can cost tens of thousands of dollars and is rarely covered by health insurance, Peabody needed to make money quickly. She started hosting ticketed parties aimed at women looking for a safe space to unwind and made enough to cover her medical bills.
She realized she could be onto something: “There are so few products that are emotionally branded and speak to women in an authentic way. It’s an industry that is so male-dominated. Whether I wanted to or not, I decided I had to go into this space.”
When it came time to start making a product in 2017, Peabody found out about a long-forgotten $30,000 retirement account Bridgewater had set up for her. After discovering it, she cashed it out, taking a tax penalty and using the remaining $20,000 to fund her first production run.
Today, Bev sells just one kind of canned rosé, although Peabody plans to launch more drinks soon. Eventually, that could mean ones that are either low-alcohol or completely free of it. “I want to build a product for any type of woman who wants to have fun anytime she wants to,” she says.
While Bev is currently sold online and also has distribution throughout Southern California, Peabody will use much of the recent funding round to build out sales teams in Nashville, Austin and New York, as she further pushes Bev into retail.
But Founders Fund, she says, has signed on for far more than just a direct-to-consumer alcohol company. She envisions Bev eventually opening up permanent social spaces like The Wing, a female-only social club.
“What I’m really trying to build is a company that could fight with the likes of Budweiser,” Peabody says. “We’re trying to build the foundation that over time can be of that scale and can build out a voice for women in the space where there hasn’t been one.”
A Los Angeles cliche: everyone eats healthily. And while this stereotype might ring true, who cares! Healthy snacking is something to be proud of. It is no surprise that some of the most innovative and delicious new health food brands are born out of LA. Of course, in part, this is due to the wellness focus of the city. But California has always been a pioneering state so it makes sense that Angelenos are putting their enterprising brains to work on making healthy, clean food absolutely delicious, (and really pretty, too)! Here are some of the best and brightest in LA-based snack foods.
Aiming to be the Willy Wonka of plant-based indulgences, Dream Pops is the first superfood ice cream on the market to leverage proprietary technology, design, a three-star Michelin chef, and plant-based ingredients to rethink the notion of traditional ice cream. All Dream Pops are vegan, less than 100 calories per pop, less than seven grams of total sugar per pop, only use coconut blossom sugar, have zero artificial flavors, dyes, gum, or corn syrup, and are dairy, gluten, and soy free. (And they also taste really good.) Blending innovative design with endless imagination, Dream Pops harnesses unique proprietary technology capable of 3D printing any shape.
Pulp Pantry is creating nutritional abundance from what would otherwise be wasted ingredients, like organic juice pulp. The company is on a mission to build a better food system: one that’s healthy, sustainable and accessible to all. Juice pulp is their “hero” ingredient and contains all of the fiber of whole fresh fruits and vegetables, and is currently what goes into making the company’s signature, plant-based Granola Bites. Another added bonus: with each pound of pulp they upcycle, they save 38 gallons of water from going to waste.
MAGIcDATES founder Diana Jarrar grew up eating dates—aka nature’s candy—and wanted to create a clean snack that utilized the nutrient-dense and sustainably-grown fruit in all its glory. Plant-based and gluten-free with no added sugar, these bites are perfect as a treat but also satiating throughout the day—and you’ll never get a sugar crash or surge because of the way date sugar is slowly absorbed into the body.
Launched in 2018, Split is the first-of-its-kind, side-by-side PB&J pack made with the best plant-based, simple, non-GMO ingredients for pure energy. Combining the amazing flavors of nut butter (peanut or almond) and fresh jam, the complete on-the-go food provides a quick meal of balanced proteins and carbohydrates for pre- or post-workout, travel, work, or school. From LA-based award-winning chef (Stella Barra and M Street Kitchen) and cycling enthusiast Jeff Mahin, restaurateur Christopher Meers, and elite performance nutritionist Dr. Philip Goglia, Split is made with only four to six ingredients and empowers everyone to honor the craving for something sweet and rich while making the most of their food.
Bright Foods is a SoCal-based health food company that specializes in new-to-market, refrigerated whole food bars. They’re the first of their kind to combine fresh produce, nuts, and superfoods into a handheld snack bar that’s kept chilled—and can be eaten up to 24 hours out of the fridge. Certified organic, gluten-free, vegan, and non-GMO, each is made with whole vegetables and fruits (except for peels and pith)—never from the leftover pulp from juice—maximizing the amount of fiber contained in each bite. Chia, coconut, and dried oranges hold the bars together (rendering the need for stabilizers, gelling agents or gums obsolete) and added superfoods provide an extra dose of nutrition. Lookout for their fourth and newest flavor, sweet potato blueberry orange with ashwagandha, to hit shelves this Spring.
“I’ll be totally honest; I didn’t think it would be as hard as it was. Being an entrepreneur is the hardest job. It’s 24/7 grunt work,” says Sarah Michelle Gellar of the journey she’s taken beyond the big screen and into the business world. Having built a successful career portraying some of the biggest cultural icons of the 90s, the Emmy award winner and Golden Globe nominee made her foray into the startup arena in 2015 as co-founder of the baking kit and mix company, Foodstirs. While her celebrity status opened doors and helped put the brand on the map in its early days, carving out a successful second act came with big challenges for the A-list actress, despite her fame.
Often dismissed by potential investors and industry insiders who questioned her credibility, the former Buffy the Vampire Slayer star needed to first convince skeptics that she brought more than a bold-faced name to the venture. “I probably got meetings with big VCs that other people wouldn’t get right off the bat. But it was a novelty. It was, ‘Let’s see what Buffy has to say.’ But there was no real interest, and it was really about us having to sell once in that meeting,” she says. Gellar credits the hard-won lessons learned in building a successful Hollywood career as her greatest entrepreneurial advantage in rising above rejection and proving those critics wrong. “ You’re always going to get the ‘no’s, no matter what job you’re in. That was the one thing that the entertainment industry prepared me for,” she says.
Gellar’s entrepreneurial ambitions were inspired by a desire to channel her creativity and leverage her platform outside of Tinseltown. “I’ve always wanted to do something else, but I didn’t know what that space was. I didn’t know where my talents were, because I had only ever worked in one industry,” she says. Seeing a mass-market void in baking brands dedicated to modern, health-minded consumers, she teamed up with fellow co-founders Galit Laibow and Greg Fleishman to transform the traditional grocery store aisle. Foodstirs was their organic, non-GMO solve that offered a reimagined baking process and a family-friendly kitchen experience that motherhood had made her crave.
As Foodstirs continues to expand its retail footprint and build a loyal following, Gellar has navigated a steep learning curve in cultivating her entrepreneurial know-how and business savvy. Her most powerful lesson to date? “Surround yourself with people that are smarter than you. For every person that doesn’t want to help you out, there are so many people that just want to offer advice and who have been through it ,” Gellar counsels. “Make sure you have people around you that can talk you off the ledge and who can also pick you back up.”
I recently sat down with Gellar to discuss her journey from Buffy to businesswoman, the challenges presented by fame, and her best advice to aspiring founders. Edited highlights below.
On Second Acts
“If you would have told me five years ago this is where I’d be sitting, I would’ve said, ‘I highly doubt that.’ I don’t say never, but the beauty of having the success of a show like Buffy so early is that you achieve more than you ever think possible.”
“I have two young children, and I love the lesson that they’ve seen, that Mommy had a great career, Mommy could’ve been doing that forever, but Mommy had an idea, Mommy wanted to try something new, and Mommy wanted to challenge herself.”
On Proving Herself
“I would have loved to have been taken more seriously as an entrepreneur. But I also hadn’t earned that right yet. Now I hope that the headlines aren’t necessarily that, because I feel like we’ve proven ourselves, and I’ve proven myself, and we have proof of concept. But in the beginning, you know, whatever gets them to notice, right?”
On The Challenges Of Fundraising
“I was extremely shocked at how tough it was being female out there, raising capital. I would say I definitely had a false bravado, and I think I was quite shocked at the difficulty that the road ahead entailed.”
“The biggest disappointments were the female funds. I think that it’s so hard to be a female fund and they’ve worked so hard to get there, that they’re still a little standoffish. And we actually wound up having more success with the traditional route.”
On The Power Of Personal Connections When Pitching
“What are the ways that they [investors] can connect to this product, that makes it something that they see the value in, as opposed to just, is it a money making opportunity? Especially with male investors, do they have kids? Do they have grandkids? Is there a wedding band on? Is there a dog on their desk? Because at the end of the day, when you’re investing money, especially when you’re investing someone else’s money, you need that personal connection. It can’t just be about the history of the founders, or the concept. You need all of the different facets to get you all the way to the top.”
On Her Best Advice To Aspiring Entrepreneurs
“Make sure you have those people around you that can talk you off the ledge, and can also pick you back up.”
On The Value of “Smart Money”
“At the end of the day, you want smart money. I think that’s something that we were all very well aware of in the beginning, which is you don’t take the first check that comes around. Because what do they have to offer in the long run? Is it someone you can work with? Is it someone whose experience is an asset to what you’re doing? And is it someone that will support you when you need it, but also be hands off? You want to really look for not just money, but smart money.”
On Her Juggling Act
“I’m a mom, I’m an actor, I’m an entrepreneur, and I’m a juggler. That’s what I do, I juggle. I can actually juggle, and I juggle careers, and life, and family, and kids, and different jobs.”
On The Power Of Feedback
“My husband and I always say, if you’re going to believe all the good reviews, then you have to give the negative reviews the same equal amount of attention and authenticity.”
On Her Acting Legacy
“If you, as an actor, have a role that’s indelible in people’s minds, that’s an honor, and that’s what you hope for.”
(CNN Business)The rigid policies of many workplaces can be hard on families — especially those with young children. But an organic baby food company aims to change that.
Once Upon a Farm, a US-based start-up producing cold pressed baby foods, has received US$20m in financing from a group of investors led by private-equity fund CAVU Venture Partners.
As part of the transaction, CAVU co-founder and managing partner Brett Thomas and the private-equity firm’s senior associate Jared Jacobs will Once Upon a Farm’s board. The other participating investors in the B-series round of funding were S2G Ventures and Beechwood Capital, along with unnamed series A investors, according to a statement. The A financing in 2017 was led by Cambridge SPG.
Berkeley, California-based Once Upon a Farm was co-founded by John Foraker, its chief executive, and Jennifer Garner. The company, which is B-corp certified, offers baby foods, apple sauce and smoothies.
Garner said: “This latest round of funding allows us to continue to help busy parents give their children the most nutritious foods possible and make life a little bit easier for families across the country.”
Once Upon a Farm said it has expanded from 300 retail outlets to more than 8,500 and now counts Target, Whole Foods, Kroger, Publix and Walmart among its stockists.
Thomas at CAVU added: “The baby food category has lacked real product innovation for quite some time. We’re thrilled to partner with John, Jen and the rest of the Once Upon a Farm team to disrupt and lead in this space.”