Each massive release of the technological ecosystem usually follows the same cycle: an upstart becomes a gigantic enterprise, it becomes public or sells for a huge amount of money, many of the best people who they have built take off and then they use their newfound wealth to create businesses.
But in addition to technology, the adventure community has its own favorite project: coffee. With investors pouring money into companies like Blue Bottle Coffee, La Colombe and Philz, you probably think it's still a favorite project. Then, earlier this year, Nestlé acquired a majority stake in Blue Bottle at a valuation of $ 700 million north. And with this kind of release for a start-up we will test the ecosystem to see if a diaspora of a class of coffee graduates will launch itself into the world. ecosystem of startups.
"If you consider the ecosystem of startups as a garden, it's a very good thing," said Craig Shapiro, the founder of the Collaborative Fund. "Now there will be a lot of new seeds put in the ground, there is liquidity for all these employees and the founders who will each be active to start something new and try something new. that in five years you and I could talk about the Blue Bottle Mafia. "
There have been a number of startups looking to make veggie burgers like Impossible Foods, which raised $ 75 million earlier this year under Temasek's leadership. There are also synthetic meat startups like Memphis Meats, which raised $ 17 million in funding from people like Bill Gates (whose name seems to be coming here a lot) and Richard Branson, as well as DFJ. The food ecosystem is therefore not necessarily new. But despite the influx of venture capital funds in this area, there does not seem to have been a spectacular exit in the Silicon Valley company project.
Although it is a favorite project, coffee may have seemed the most logical for many funds like those who invest in coffee to test the waters. Operating margins are not bad, it's a bit of a fashionable choice and coffee can be a bit of a habit in addition to a consumer experience. Whether it's selling and delivering baked beans or having a store on the way to work, coffee is a recurring experience, and there are probably some internal indicators somewhere in the world. weekly active re-roasters or something like that. Silicon Valley loves this kind of recurring revenue model, should it ever take off.
Here is an overview of Starbucks' operating margins for the last fiscal year, for example:
So, not really bad. But if you look at the price of the company's stock, he had an average year. Despite this, Starbucks still has a market capitalization of more than $ 80 billion:
I made the suggestion of a little less joke that Amazon should buy a coffee startup. The company has spent more than $ 13.7 billion for the acquisition of Whole Foods, and there is an opportunity for a brand match with Amazon and a real fashionable coffee brand like Philz. And the market opportunity, as we've seen with the Starbucks case, is actually pretty big. Was a startup (or Amazon) to open a coffee shop across a fraction of each Starbucks store and try to sell a better coffee experience than the consumer's behavior of get-in-get-out-with-your-latte, then sell at a light premium, this already offers a rather important opportunity. And if you've ever been to a blue bottle, you'll see that attempting anything from an Apple Store experience in the form of coffee is apparently the goal.
Consumer goods companies, or GICs for short, are already looking for ways to acquire brands that have a strong affinity with consumers. Coca-Cola, for example, has bought the Topo Chico – a superb sparkling water boot that's very popular in Texas – earlier this year (thanks for spoiling it, NYT ). These types of product-oriented companies with strong brands of consumer products are clearly of great value to major food and beverage companies, and all this mergers and acquisitions activity will surely attract the attention of investors.
Shapiro argues that there will be a lot of interest in the movements of clean ingredients beyond the noise that occurs around herbal foods. According to Shapiro, large food and beverage companies are struggling to change their supply strategies. It is therefore logical that one can choose a start-up or a small business that is already an autonomous operating unit. He pointed out RXBar, which Kellogg acquired for $ 600 million earlier this year.
"I think that between new funds focused on this and the existing funds that pay attention to it, I think we will see significant investments and orders of magnitude greater than most people anticipate."
Such a flashy exit will probably attract the attention of potential investors and entrepreneurs with experience in the field of GICs. CircleUp, for example, raised a $ 125 million fund to invest in consumer products earlier this year. What we will have to see is that if an exit like the one from Blue Bottle provided liquidity, the investors and the founders or the first employees had to start their own business – but at the very least, it looks like the spark could soon evolve into a flame.
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