Brief: Founded in 2015, Blendid is a food automation company that currently develops autonomous smoothie kiosks, with plans to offer an array of foods with robotics. The company uses artificial intelligence and a mobile ordering app to track customers' taste and preferences. Blendid already has kiosks deployed at select Walmart locations and plans to expand aggressively.
Key People: Co-founder and CEO Vipin Jain (CEO of Retrevo before acquired by Barns & Noble), Co-founder and CTO Venki Ayalur (Barnes & Noble Nook and Motorola Mobile), Co-founder & VP of Engineering Vijay Dodd (28 years in hardware and software, AT&T, Palm and Barnes & Noble Nook)
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Security Type: Equity - Preferred
Amount Raised: $753,980
Minimum Investment: $999
Here's what I like: Look, this is easy as pie. Food automation being a key part of every fast-casual model over the next 10 years is 1,000% inevitable.
Actually, it’s already a $4bn market, with a 13% CAGR (compound annual growth rate).
When McDonald’s intro’d kiosks people freaked out — then, immediately forgot they cared. For a hot minute people complained that robots were stealing jobs. But, when the pandemic hit and countless restaurants closed because they couldn’t find decent help (or afford it), the idea became novel.
This is the future, and it’s completely OK. In fact, I’d argue for the right space and place, it’s preferred! The market is poised to grow exponentially over the next decade and I would argue it will actually push the restaurant industry forward in a way it desperately needs.
Additionally, as our population grows and environmental issues soar, food tech can play a massive role in controlling food waste and making healthy’ish meals more accessible by controlling portions, reducing labor costs and required real estate.
Remember the term “food factory” for later 😉
Lastly, while the founding team is not overly experienced in food, they are tremendously successful at building hardware and scaling a business to exit — which in the case of Blendid, is what I care about most.
Here's what I don't love: I have only two nits to pick here: a) the price is steep given it generated less than $300k in 2021 revenue (up from $65k the year prior). b) how the market matures.
First, I understand the price must factor into the cost of getting hardware into production, testing and approval (more on this later). It’s a big multiple that requires a $1 billion exit to pay out anything meaningful — which is why we’re all here.
Secondly, the food robotics business reminds me of medical sales. There’s near-constant R&D costs, testing, repairs and regulatory approval requirements, to say nothing of the fact that only a few major players (like Stryker in the medical industry) will dominate the space. Needless to say, there’s a lot of politics involved. So, unless the company has accounted for heavy lobbying and sales, they’re in for a rude awakening. I wish it was as simple as the best product wins, but it just isn’t.
Overall, I can mostly overlook the price given the potential TAM, but I do worry about the competitive nature of selling into established brands.
That said, the stickiness is like Gorilla Glue! First-movers benefit from the install cost/pain-in-the-ass factor, and that’s a significant moat (just ask Miso Robotics).
Who should invest and why: If you like emerging markets, this should be on your radar! Also (and it probably should’ve been mentioned above), there’s a bunch of high-margin revenue opportunites in tacking on software, maintenance and equipment leasing add-ons that enables companies like Blendid to capture an additional 20-30% in topline revenue over time.
Also, keep in mind, Blendid’s entry point is smoothies, but it plans to move into numerous other food categories.
Overall, this is a business that checks a few of my most important boxes:
What’s missing however, is an unfair advantage and a price that rewards the bold 😏
Also important to note, minimum investment is about $1k. But, it is preferred equity rather than a note — which, as you know, I much prefer.
In the end, this is a more attractive deal for those that typically invest a few thousand vs a few hundred. It may take a while to see ROI, but there is no question several of these food automation companies are going to score big!!
The question is, will Blendid be one of them?
As always, startup investing is super high-risk, and anything can happen. Don't invest anything you can't afford to lose.
Invest in Blendid here 👉 Term Sheet
DM’s open on Twitter & IG 🤳 @kitun.