New Investment Opportunity: Flash Coffee
Hyper-scalable, tech-enabled, specialty coffee chain
- Grab-and-go booths serving quality Arabica coffee with heavily optimized real estate and staffing model and >70% gross margin
- Fastest-growing coffee company in APAC region, serving $340B market in 7 countries; ~250 stores since 2020 launch; currently opening 1 new outlet per day on average; plans to expand to US, Europe, LATAM and MENA
- ~18X YOY net revenue hypergrowth in 2021, forecasting ~20X growth in next 24 months with positive EBITDA in Q3 2023
- Already profitable on a store EBITDA level across APAC despite heavy Covid impact
- App-based automation technology optimizes customer acquisition, operations, supply chain, location selection, delivery, menu management to cut costs, increase margins, grow revenue
- Exceptional team led by Founder & CEO David Brunier (ex-Delivery Hero, ex-foodpanda, ex-Foodora), and Founder, COO & CFO Sebastian Hannecker (ex-Bain & Company)
- $50M Series B1 at ~$150M pre-money valuation; co-investors include White Star Capital and Delivery Hero
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Dear Josb,
Coffee drinkers in Asia represent a fast-growing $340B market who return for their favorite quality beverage each day. Flash Coffee is the fastest-growing coffee company in the APAC region and has opened ~250 revolutionary low-cost, high-margin, tech-driven and profitable kiosks since it launched in 2020 and is poised for exponential growth.
OurCrowd is investing in Flash Coffee. The details in this email are based on information received from, and verified solely by, the company.
The problem
Quality coffee is traded at premium prices across Asia, making frequent consumption unattainable for the majority of the population. While ~80% of Starbucks purchases are grab-and-go, customers still have to pay for large and expensive retail spaces which are only used by a minority of the customer base.
Traditional coffee brands are mostly outdated and irrelevant for the up-and-coming Asian youth – they often serve low-quality coffee at expensive prices and their tech-enablement rarely exceeds the sophistication of digitized stamp cards, leaving convenience-seeking customers unsatisfied.
The solution
Flash Coffee is a fully tech-enabled coffee chain serving high quality Arabica coffee at extremely affordable prices – 40% lower than Starbucks on average. The products are sold in space-optimized grab-and-go stores with industry-leading unit economics, lean staffing, low capex-requirements and only ~3 months capex paybacks at full potential. The majority of orders are triggered via digital channels – through the in-house Flash Coffee app and all major food delivery platforms.
The revenue
Flash Coffee's low physical footprint and minimal staffing enables the company to achieve attractive gross margins of more than 70% with significant additional margins approaching ~80% at scale.
Flash Coffee increased its net revenues by ~18X YOY to January 2022, continuously outperforming its business plan. The company is on track to reach ~$90M net annual revenue run rate by the end of 2022 and expects to achieve ~$270M net annual revenue run rate by the end of 2023 with positive EBITDA from Q3 2023.
The technology
The company uses digital and data-driven e-commerce strategies to acquire customers proactively and to generate additional revenue from customers who are not in proximity to the stores. In addition, Flash Coffee leverages advanced CRM models to drive frequency and optimize cohort performance.
The company's app-based technology enables data-driven decision making, exponential growth via digital channels and operational excellence. It reduces costs, increases margins and optimizes efficiency from customer acquisition through operations, supply-chain management, location selection, delivery, and menu optimization.
The traction
Since its launch in 2020, the company has opened ~250 coffee shops in Singapore, Thailand, Indonesia, Hong Kong, Taiwan, South Korea and Japan. It is currently opening one new outlet per day. Flash Coffee looks to further accelerate the rollout to reach its projected total of ~1,100 stores across 9 markets and 36 cities by April 2024.
The team
Flash Coffee's exceptional team is led by CEO David Brunier (ex-Foodora, foodpanda, Delivery Hero), and COO & CFO Sebastian Hannecker (ex-Bain & Company), with other senior executives previously at WeWork, Grab, Deliveroo, foodpanda, Delivery Hero, Paypal, Ebay, HSBC, Lululemon, Rocket Internet, and JP Morgan.
The round
This $50M Series B1 round at ~$150M pre-money valuation will be used to accelerate the opening of new stores and its technology development. Existing investors include White Star Capital, Delivery Hero, Rocket Internet, Global Founders Capital, and Conny & Co.
Meet the CEO
We're hosting a webinar/conference call on Tuesday, April 5th, at 2PM Israel / 7AM New York / 7PM Singapore for investors to meet Founder & CEO David Brunier and learn more about Flash Coffee.
Can't make the webinar? Register and we will send you a recording of the call.
The Flash Coffee solution
The Flash Coffee mobile app allows customers to order, customize and pay for their coffee online before they collect it at one of the company's iconic yellow storefronts without any waiting time or have it conveniently delivered to their doorsteps. Flash Coffee offers 100 percent Arabica coffee beans in fully space-optimized grab-and-go locations. Low rental costs and lean staffing enable Flash Coffee to cut costs and keep prices for its premium products at extremely affordable levels while maintaining very attractive margin profiles.
Next steps:
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