New funding: Bean Box, the Seattle startup that delivers premium coffee from independent roasters, has raised $2.4 million in new funding as part of a Series A round.
The company: Founded in 2014 by Matthew Berk and Ryan Fritzky, Bean Box offers coffee products from 40 top-rated, small-batch roasters, to make those items accessible to more people at home. The startup seeks to bring cafe culture to people at scale, using human and algorithmic methods to select coffees that are tailored to customers’ tastes.
Growth: Berk, the CEO, said year-over-year growth has been approaching 200% and Bean Box’s gross margin is now above 40%. The company’s subscriber count more than doubled last year and is growing even faster now, Berk said.
Bean Box, which employs 20 people, is adding about two roasters a month and has started to expand beyond the Pacific Northwest with new partners such as Los Angeles-based Klatch Coffee and Boulder, Colo.-based Dragonfly Coffee.
Bean Box also has an exclusive relationship with Cup of Excellence, a premier specialty coffee competition, and a few times a year purchases winning coffees at auction. Berk said in some cases, Bean Box has been the only coffee company in the U.S. offering those microlots.
Pandemic impact: The company’s key challenge during the past year has been adjusting to changes in the operational landscape, including limits on people and space to maintain safety, as well as supply chain issues.
“Thankfully, we’ve been investing in automation, fulfillment technology, and our supply chain over the past five years, and that really paid off for us,” Berk said. “With more people working from home, demand for great coffee has skyrocketed, and our subscriber base has grown tremendously.
“The pandemic basically flipped the switch on our investment hypothesis,” Berk added. “That demand for specialty coffee — the fastest-growing segment of the U.S. coffee market — would shift from retail to the home.”
Investors: Kirby Winfield’s Ascend.VC, a longtime supporter of Bean Box, led the round, with a number of other current investors, primarily individuals, participating. Bean Box previously raised $3.2 million in seed financing.
The startup will use the new cash for strategic growth — investing in its coffee subscription business and hiring senior leaders in marketing, engineering and operations.
“We had a profitable 2020,” Berk said. “Having been super disciplined about building the business, we came to the decision that not deploying growth capital at this point would be fiscally irresponsible. It’s a great place to be.”