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March 21, 2019
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Bottomless has a solution for lazy coffee addicts

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If you’re like me, you let out a heavy sigh every month or so when you reach out and unexpectedly find an empty bag of coffee. Bottomless, one of the 200-plus startups in Y Combinator’s latest batch, has a solution for us caffeine addicts.

For a $36 annual membership fee, a cost which co-founder Michael Mayer says isn’t set in stone, plus $11.29 per order depending on the blend, Bottomless will automatically restock your coffee supply before you run out. How? The startup sends its members an internet-connected scale free of charge, which members place under their bag of coffee grounds. Tracking the weight of the bag, Bottomless’ scales determine when customers are low on grounds and ensure a new bag of previously selected freshly roasted coffee is on their doorstep before they run out.

Voilà, no more coffee-less mornings.

Founded by Seattle-based husband and wife duo Mayer and Liana Herrera in 2016, Bottomless began as a passion project for Mayer, a former developer at Nike.com. Herrera kept working as a systems implementations specialist until Bottomless secured enough customers to justify the pair working on the project full-time. That was in 2018; months later, after their second attempt at applying, they were admitted into the Y Combinator accelerator program.

Bottomless’ smart scale

Bottomless today counts around 400 customers and has inked distribution deals with Four Barrel and Philz Coffee, among other roasters. Including the $150,000 investment YC provides each of its startups, Bottomless previously raised a pre-seed round from San Francisco and Seattle-area angel investors.

Before relocating to San Francisco for YC, the Bottomless founders were working feverishly out of their Seattle home.

“This whole time we’ve been 3D-printing prototypes out of our apartment and soldering them together out of our apartment,” Mayer told TechCrunch. “We kind of turned our place into this new manufacturing facility. There’s dust everywhere and it’s crazy. But we made 150 units ourselves by hand-soldering and lots of burned fingers.”

The long-term goal is to automate the restocking process of several household items, like pet food, soap and shampoo. Their challenge will be getting customers to keep multiple smart scales in their homes as opposed to just asking their digital assistant to order them some coffee or soap on Amazon .

Amazon recently announced it was doing away with its stick-on Dash buttons, IoT devices capable of self-ordering on Amazon. The devices launched in 2015 before Google Homes and Amazon Alexas hit the mainstream.

So why keep a smart scale in your kitchen as opposed to just asking a digital assistant to replenish your supply? Mayer says it’s coffee quality that keeps it competitive.

“Some of our most enthusiastic customers live out in like deep suburbs far away from city centers, but they really love fresh coffee,” Mayer said.And there’s no way to get fresh coffee if you live 20 or 30 minutes from a city center, right?”

“Or you might think in a city like San Francisco or Seattle, you can get freshly roasted coffee pretty easily because there are restaurants all over the place, right?” He added. “That’s certainly true, but it does take a little bit of extra thought to remember to grab it on the right day when you’re running low.”

Mayer and Herrera don’t consider themselves coffee experts, despite now running what is essentially a direct-to-consumer coffee marketplace out of Seattle, the coffee capital.

“I’m originally from Portland and Portlanders know a lot about coffee,” Mayer said. “I never really considered myself to be a coffee aficionado or a coffee snob in my head, but I guess compared to like the average American from anywhere in the country, I would be just a regular coffee drinker in Portland. All I really knew about coffee going into this was that it’s better fresh. That’s it.”

Bottomless is currently accepting customers in beta. The team will pitch to investors at YC Demo Days next week.

News Source = techcrunch.com

Food delivered to the doorstep is not so cheap in China anymore

in alibaba/alibaba group/Amazon/Asia/Baidu/China/Delhi/DoorDash/driver/Ele.me/Food/food delivery/grubhub/India/JD.com/meitu/Meituan/Meituan-Dianping/ofo/online food ordering/Politics/Tencent/Uber/Uber Eats by

A big selling point of ordering food to the doorstep in China is price, which, in the early years, could be much cheaper than eating in-house. That’s arguably indulged a demographic of lazy, indoorsy eaters, but that may not last for much longer.

Over the past few months, users in China have noticed incremental price increases on their meals ordered via Ele.me and Meituan, the country’s largest food delivery apps. The trigger? China’s food heavyweights have gone about taking a bigger cut of each order — over 20 percent in some cases — as their priorities shifted following a major upheaval.

Three-way war

Ele.me and Meituan work just like their American counterparts Uber Eats, GrubHub, DoorDash and the likes. The apps list menu items from an assortment of local restaurants. When a user places an order, they pass it along to the restaurant and dispatch a driver — in China’s case, a scooter driver — to pick up the food. The customer can then see when their meal will arrive through a live map tracking the driver’s movement.

This new habit of ordering food via a marketplace app rather than calling a restaurant caught on rapidly in China, in part thanks to vast sums of subsidies from companies like Ele.me and Meituan to bring costs down for restaurants and users. The market was on course to reach 240 billion yuan ($35.8 billion) in transactions in 2018 with an 18 percent year-over-year growth rate, estimates research firm iiMedia. Total users would reach 355 million, which means a quarter of Chinese are now ordering food from their phones.

Meituan’s delivery driver pictured in an ad / Image: Meituan via Weibo

Food delivery startups willingly undertook the cash-intensive fight because they had deep-pocketed backers. For a few years, the sector was a three-way proxy war between China’s tech mammoths Baidu, Alibaba and Tencent, which are collectively known as the “BAT”. Baidu effectively quit the scene after selling its food delivery business to rival Ele.me in 2017. Last year saw more shakeup as Alibaba took over Ele.me, which subsequently merged with the parent’s local services unit Koubei, while Meituan went public with Tencent being a major shareholder.

Meituan led the game in 2018 with a 61.3 percent market share according to research firm TrustData, giving it a meaningful edge over Ele.me, which alongside its newly acquired Baidu Waimai commanded a total of 36.5 percent share.

Subsidies were helpful in enlisting restaurants and consumers early on, but as the market consolidates, investors will likely become more attuned to monetization. It’s thus unsurprising to see both major players scaling back from subsidy-powered growth. It’s too soon to know how the faceoff between Ele.me and Meituan will play out in the next few years, as the duo is now dealing with a fresh set of challenges and goals.

New adventures

It’s hard to nail down how much Ele.me and Meituan are charging restaurants from each transaction since fees vary on the location, type and size of a restaurant. What’s widely acknowledged is that both have been raising commission rates once every few months, forcing restaurants to rethink their strategy for ferrying food around.

“We’ve raised all our items by at least two yuan [$0.30]. We aren’t worried because we’ve built a loyal customer base over the years. For those who just started and focus on delivery, they may have a harder time,” a restaurant owner who operates a take-out kitchen in Hefei, the capital of China’s Anhui Province, told TechCrunch.

ELEME ALIBABA meituan

Ele.me’s delivery driver pictured in an ad / Image: Ele.me via Weibo

The subsidy-fuelled period cultivated a clan of “virtual restaurants” that operate only out of a kitchen. As subsidies shrink, those reliant on delivery as a lifeline are left with three options: close down, absorb the new costs to keep customers happy, or in some cases where the kitchen is well-functioning, shift the costs to customers.

TechCrunch spoke to more than a dozen restaurants and take-out kitchens in China’s major cities and found most are paying at least 20 percent of each order — a considerable bite to the low-margin business — to Meituan and slightly less to Ele.me. The discrepancy may speak to Meituan’s mounting operating losses — which tripled year-over-year to 3.45 billion yuan ($510 million) in the third quarter of 2018 — a soft spot that its rival poignantly pointed out.

“Ele.me promises it won’t further raise fees [on restaurants] and its rate will always be lower than that of Meituan,” Ele.me vice president Wang Jingfeng told news portal Sina in an interview in January. “Meituan is under financial pressure. But Ele.me understands the food delivery market is still in the phase of being educated. Reaping rewards from merchants too early can do great harm to the market.”

Meituan said it had no comment on its increased fees for restaurants. But the Hong Kong-listed company, driven with the vision to become the “Amazon for services,” already showed signs of stress when it ceased expansions on its costly new ventures — car-hailing and bike-rental. Food delivery accounts for the majority of Meituan’s revenues, while hotel booking is its second-most significant revenue source. The company, however, assured investors that it’s in no rush to turn a profit.

“We are not focused on the short-term profitability, even though we have been proven that we are able to do so, to make it — continue improvement in our unit economics. We would rather focus on growth and improve the overall user and merchant experience and to continue to strengthen our leadership in this market,” said Chen Shaohui Chen, Meituan’s vice president of corporate development, during the company’s Q3 earnings call. 

Despite enjoying support from consistently profitable Alibaba, Ele.me will also face pressure soon as parent company Alibaba copes with slowing revenue growth. For Ele.me, opportunities lie outside China’s megacities where eating via an app is not yet a norm. All told, Alibaba plans to hire 5,000 new employees in 2019 for Ele.me and Koubei to infiltrate the largely untapped Tier 3 and 4 cities, a source close to the matter told TechCrunch, and the team will focus not just on delivery but also work to digitally power up conventional restaurants.

Food delivery is just one way to generate income. Both Ele.me and Meituan are aiming to upgrade restaurants the way Alibaba and JD.com have transformed brick-and-mortar stores: from how data analytics can beef up sourcing efficiency to implementing scan-to-order for in-house diners. The hope is a data-centric practice will convert to cost-saving for restaurants, which will eventually boost their loyalty and willingness to pay for the tech giants’ tools.

News Source = techcrunch.com

Failed meal-kit service Munchery owes $6M to gift card holders, vendors

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Several weeks after a sudden shutdown left customers and vendors in the lurch, meal-kit service Munchery has filed for bankruptcy. In the Chapter 11 filing, Munchery chief executive officer James Beriker cites increased competition, over-funding, aggressive expansion efforts and Blue Apron’s failed IPO as reasons for its demise.

Munchery owes $3 million in unfulfilled customer gift cards and another $3 million to its vendors, suppliers and various counterparties, the filing reveals. The company’s remaining debt includes $5.3 million in senior secured debt and convertible debt of approximately $23 million. Munchery says its scrounged up $5 million from a buyer of its equipment, machinery and San Francisco headquarters.

The business had raised more than $100 million in venture capital funding, reaching a valuation of $300 million in 2015 before ceasing operations on January 22 and laying off 257 employees in the process. Munchery was backed by Menlo Ventures, Sherpa Capital, e.Ventures, Cota Capital and others.

The company, which failed to notify its vendors it was going out of business, has been scrutinized for failing to pay those vendors in the wake of its shutdown. To make matters worse, emails viewed by TechCrunch show Munchery continued aggressively marketing its gift cards in emails sent to customers in December, weeks before a final email to those very same customers announced it was ceasing operations, effectively immediately.

An email advertising Munchery gift cards sent to a customer weeks before the startup went out of business.

The latest court filings shed light on Beriker’s decision-making process in those final months, touching on Munchery’s frequent pivots, the company’s 2017 layoffs, its plans to scale sales of Munchery products in Amazon Go stores and failed attempts at a sale. Beriker is the sole remaining Munchery board member. He has not responded to several requests for comment from TechCrunch.

In the third quarter of 2018, Munchery, at the recommendation of its board, hired an investment bank to find a buyer for the startup, to no avail. Beriker suggests the lack of a buyer, coupled with industry trends like larger-than-necessary venture capital rounds and inflated valuations, were cause for the startup’s failure to deliver.

“The company expanded too aggressively in its early years,” the filing states. “The access to significant amounts of capital from leading Silicon Valley venture capital firms at high valuations and low-cost debt from banks and venture debt firms, combined with the perception that the on-demand food delivery market was expanding quickly and would be dominated by one or two brands– as Uber had dominated the ridesharing market– drove the company to aggressively invest in its business ahead of having a well-established and scalable business model.”

Increased competition from well-funded competitors drove the startup off course, too, and the epic failure that was Blue Apron’s IPO, which had a “material negative impact on access to financing for startups in the online food delivery business,” was just the cherry on top, according to Beriker’s statements.

Munchery’s vendors, who were not notified or paid following Munchery’s announcement, have provided outspoken criticism to the company and venture capital’s lack of accountability in the weeks following Munchery’s shutdown. Lenore Estrada of Three Babes Bakeshop, among several vendors owed thousands of dollars in unpaid invoices, orchestrated a protest outside of Munchery investor Sherpa Capital’s offices in January. She said she has spoken with Beriker and founding Munchery CTO Conrad Chu in an attempt to pick up the pieces of the failed startup puzzle.

“None of us who are owed money are going to get anything,” Estrada told TechCrunch earlier today. “But [Beriker], after fucking it all up, is still getting paid.”

Beriker, indeed, is still earning a salary of $18,750 per month, one-half of his pre-bankruptcy salary, as well as a “success fee based on the net proceeds recovered from the sale of the company’s assets up to a maximum of $250,000,” the filing states.

View the full bankruptcy filing here:

News Source = techcrunch.com

Go-Jek’s Get app officially launches in Thailand as Southeast Asia expansion continues

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Go-Jek is extending its reach in Southeast Asia after its Thailand-based unit made its official launch, which included the addition of a new food delivery service.

Get, which is the name for Go-Jek business in Thailand, started out last year offering motorbike taxi on-demand services to a limited part of Thai capital city Bangkok, now the company said it has expanded the bikes across the city and added food and delivery options. Get’s management team is composed of former Uber staffers while CEO Pinya Nittayakasetwat was recruited from chat app Line’s food delivery business.

Over the last two months, Get claims to have completed two million trips in the past two months. There’s no word on when Get will add four-wheeled transport options, however. On the food side, Get is claiming to have 20,000 merchants on its platform but there are some issues. Rumming through the app, I found a number of listed restaurants that didn’t include menus. In those instances, customers have to input their dish and price which makes it pretty hard to use.

Go-Jek’s Get app in Thailand doesn’t include menus for a number of restaurants, making it nearly impossible to order

Grab is the dominant player in Thailand, where it offers taxis, private cars, motorbikes, delivery and food across eight markets in Southeast Asia. Go-Jek rose to success in its native Indonesia, where it began offering motorbikes on demand but has expanded to cover taxi, cars, food, general services on-demand and fintech. Its investors include Google, Tencent, Meituan and Sequoia India.

That’s the same playbook Grab is using, but Go-Jek is taking its time with its market expansions. Thailand represents its third new market beyond Indonesia, following launches in Vietnam and Singapore. The Philippines is another market where Go-Jek has voiced a desire to be present — it has even made an acquisition there — but regulatory issues are holding up a launch.

Regional expansion doesn’t come cheap and Go-Jek is in the midst of raising $2 billion to finance these moves. It recently closed $1 billion from existing investors, and Deal Street Asia reports that it could raise as much as $3 billion for the entire Series F round. That’s likely in response to Grab’s own fundraising plans. The Singapore-based company closed $2 billion last year, but it is looking to increase that total to $5 billion with a major injection from SoftBank’s Vision Fund a key piece of that puzzle.

News Source = techcrunch.com

With $90 million in funding, the Ginkgo spinoff Motif joins the fight for the future of food

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Continuing its quest to become the Amazon Web Services for biomanufacturing, href=”http://ginkgobioworks.com/”>Ginkgo Bioworks has launched a new spinoff called Motif Ingredients with $90 million in funding to develop proteins that can serve as meat and dairy replacements.

It’s the second spinout for Ginkgo since late 2017 when the company partnered with Bayer to launch Joyn Bio, a startup researching and developing bacteria that could improve crop yields.

Now, with Motif, Ginkgo is tackling the wild world of protein replacements for the food and beverage industry through the spinoff of Motif Ingredients.

It’s a move that’s likely going to send shockwaves through several of the alternative meat and dairy companies that were using Ginkgo as their manufacturing partner in their quest to reduce the demand for animal husbandry — a leading contributor to global warming — through the development of protein replacements.

“To help feed the world and meet consumers’ evolving food preferences, traditional and complementary nutritional sources need to co-exist. As a global dairy nutrition company, we see plant- and fermentation-produced nutrition as complementary to animal protein, and in particular cows’ milk,” said Judith Swales, the Chief Operating Officer, for the Global Consumer and Foodservice Business, of Fonterra, an investor in Ginkgo’s new spinout.

To ensure the success of its new endeavor Ginkgo has raised $90 million in financing from industry insiders like Fonterra and the global food processing and trading firm Louis Dreyfus Co., while also tapping the pool of deep-pocketed investors behind Breakthrough Energy Ventures, the climate focused investment fund financed by a global gaggle of billionaires including Marc Benioff, Jeff Bezos, Michael Bloomberg, Richard Branson, Bill Gates, Reid Hoffman, John Doerr, Vinod Khosla, Jack Ma, Neil Shen, Masayoshi Son, and Meg Whitman.

Leading Ginkgo’s latest spinout is a longtime veteran of the food and beverage industry, Jonathan McIntyre, the former head of research and development at another biotechnology startup focused on agriculture — Indigo Ag.

McIntyre, who left Indigo just two years after being named the company’s head of research and development, previously had stints at Monsanto, Nutrasweet, and PepsiCo (in both its beverage and snack divisions).

“There’s an opportunity to produce proteins,” says McIntyre. “Right now as population grows the protein supply is going to be challenged. Motif gives the ability to create proteins and make products from low cost available genetic material.”

Photo: paylessimages/iStock

Ginkgo, which will have a minority stake in the new company, will provide engineering and design work to Motif and provide some initial research and development work on roughly six to nine product lines.

That push, with the financing, and Ginkgo’s backing as the manufacturer of new proteins for Motif Ingredients should put the company in a comfortable position to achieve McIntyre’s goals of bringing his company’s first products into the market within the next two years. All Motif has to pay is cost plus slight overhead for the Ginkgo ingredients.

“We started putting Motif together around February or March of 2018,” says Ginkgo co-founder Jason Kelly of the company’s plans. “The germination of the business had its inception earlier though, from interacting with companies in the food and beverage scene. When we talked to these companies the strong sense we got was if there had been a trusted provider of outsourced protein development they would have loved to work with us.”

The demand from consumers for alternative sources of protein and dairy — that have the same flavor profiles as traditional dairy and meats — has reached an inflection point over the past few years. Certainly venture capital interest into the industry has soared along with the appetite from traditional protein purveyors like Danone, Tyson Foods, and others to take a bite out of the market.

Some industry insiders think it was Danone’s 2016 acquisition of WhiteWave in a $12.5 billion deal that was the signal which brought venture investors and food giants alike flocking to startups that were developing meat and dairy substitutes. The success of companies like Beyond Meat and Impossible Foods has only served to prove that a growing market exists for these substitutes.

At the same time, solving the problem of protein for a growing global population is critical if the world is going to reverse course on climate change. Agriculture and animal husbandry are huge contributors to the climate crisis and ones for which no solution has made it to market.

Investors think cultured proteins — fermented in tanks like brewing beer — could be an answer.

Photograph: David Parry/EPA

“Innovative or disruptive solutions are key to responding to changing consumer demand and to addressing the challenge of feeding a growing world population sustainably,” said Kristen Eshak Weldon, Head of Food Innovation & Downstream Strategy at Louis Dreyfus Company (LDC), a leading merchant and processor of agricultural goods. “In this sense, we are excited to partner with Motif, convinced that its next-generation ingredients will play a vital role.”

Breakthrough Energy Ventures certainly thinks so.

The investment firm has been busy placing bets across a number of different biologically based solutions to reduce the emissions associated with agriculture and cultivation. Pivot Bio is a startup competing with Ginkgo’s own Joyn Bio to create nitrogen fixing techniques for agriculture. And earlier this month, the firm invested as part of a $33 million round for Sustainable Bioproducts, which is using a proprietary bacteria found in a remote corner of Yellowstone National Park to make its own protein substitute.

For all of these companies, the goal is nothing less than providing a commercially viable technology to combat some of the causes of climate change in a way that’s appealing to the average consumer.

“Sustainability and accessible nutrition are among the biggest challenges facing the food industry today. Consumers are demanding mindful food options, but there’s a reigning myth that healthy and plant-based foods must come at a higher price, or cannot taste or function like the animal-based foods they aim to replicate,” said McIntyre, in a statement. “Biotechnology and fermentation is our answer, and Motif will be key to propelling the next food revolution with affordable, sustainable and accessible ingredients that meet the standards of chefs, food developers, and visionary brands.”

News Source = techcrunch.com

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