If you are traveling through San Francisco International Airport (SFO) this holiday season, you can be one of the first c...
Problem
Millions of people
go through a stagnated coffee experience
that takes up to 15 minutes,
multiple times every day.
Problems for consumers
- Long and unpredictable wait time
- Expensive
- Inconsistent drink taste/quality
- Dated user experience
- Other current automated coffee solutions suck
Problems for operators
- Finding real estate, design, construction, permitting - extremely high initial investment
- High and increasing labor cost
- Challenges with training and retaining employees
- Fixed location — after renovating a café, you can't just move it somewhere else
Solution
Robotic Coffee Bar
The fastest, most advanced fully automated café system.
The only robotic coffee systems in the world that currently serve hundreds of paying customers every single day, fully autonomously and fully unattended.
Our company-operated machines at San Francisco Airport are the highest revenue-generating vending machines in the world.
Our initial B2B customers include four Fortune 100 companies.
Product
The highest revenue-generating vending machine in the world
Built for high output
Up to 600 drinks per day. Mobile ordering. Prepares up to seven drinks at a time. Dual pickup windows for up to four drinks at a time.
Massive menu, quality products
Trusted by leading specialty coffee roasters including Onyx Coffee Lab, Intelligentsia Coffee, Equator Coffees, and Ritual Coffee Roasters. Far more than just classic espresso drinks. Up to four different coffee beans with four products on nitro tap, with a modular shelf for food and retail products.
Refined hardware and software integration
Designed and built in-house by our vertically integrated team. Developed and improved through real-world testing with over 600,000 products sold to paying customers.
Traction
$6M in sales. Fortune 100 customers. Backed by All-In Podcast besties and top VCs.
Making money while developing the product
We've been field testing prototypes of our machines in high-demand environments since 2017. Over $2M in revenue has been generated as we developed and tested our machines with hundreds of thousands of paying customers, including over $700K from our two machines at the San Francisco Airport in 2022 alone. We do not just bring machines to short demo events and give away free coffee for press coverage. Our San Francisco Airport operations run at over 50% EBITDA margin.
Shipping to Fortune 100 companies and more
With $0 spent on marketing and no sales team, Cafe X has sold machines to a number of Fortune 20-100 companies and more. In 2022, Cafe X shipped our first five machines to B2B customers. As of March 2023, despite increasing our prices, we are already currently building 10 additional machines for customers who have already paid significant non-refundable down payment. Our current priority is to scale manufacturing to meet demand.
Sacks, Chamath, JCal, and more
Our early supporters are some of the most prolific investors in Silicon Valley. More below in the funding section.
Customers
Notable B2B customers
EV company (Fortune 100)
- Professional services firm (Big four)
- Major bank (top 20 most valuable companies)
- Energy company (A supermajor)
- Museum of the Future
- The most awarded specialty coffee roaster in the U.S.
Business model
Cafe X changes the café opening timescale from months to hours
Staff training and installation can be completed in just a few hours. Location examples include:
- Corporate offices
- Cafés
- Malls, retail stores
- Airports, travel stops
- Museums, parks
Pricing
- Robotic Coffee Bar system: $285,000
- Annual software and services: $15,000
- Software and services subscription required for the life of the machine (estimated 15 years)
Market
$11B market set to grow to $30B by 2024
The intelligent vending machine market was valued at $11B in 2017 and is set to grow to $30B by 2024. Coffee vending machines in office buildings make up one of the largest and most utilized segments of this market.
Cafe X is bringing much-needed innovation to the coffee vending machine market, and is providing a similar experience and quality to that of a specialty cafe. The speciality coffee shop market has grown at an 11.28% CAGR from 2019 to 2020, and is expected to grow by $80B over the next four years.
Competition
Cafe X vs...
Fully Staffed Cafés
Our machines deliver the same product quality, if not better, than fully staffed cafés. Therefore, our direct competition is fully staffed cafés, in locations where it is feasible to have both. Given compact design of the machine, a fully staffed café may still have the advantage in terms of menu variety and drink customization options. However, our machines will deliver significantly more consistent quality, and a lot faster.
Other automated self-service coffee
Our San Francisco Airport Terminal 3 machine replaced a competitor's coffee vending machine in 2021. Despite reduce airport traffic due to COVID-19, our machine generated 3-4x the sales that the competition's machine did at the exact same location.
What's the point of the robot? I can just press a button on a coffee machine
Robotic Coffee Bar is designed for a large menu of premium product offerings in high volume locations. Having a robotic arm to prepare multiple, multi-step-recipe drinks at the same time is a critical requirement.
Locations that meet the following criteria are generally better off just installing a standard commercial fully automated coffee machine, where a user puts a cup down and presses a button by themselves, as a Robotic Coffee Bar would be overkill.
- Only require a basic menu
- Daily beverage output of 30-50 drinks
- Low price point or free
Vision and strategy
Scaling production
Cafe X is poised to go viral
- Our focus over the next 18 months is ramping production of our current machine to meet demand, and reducing cost to increase margins.
- Each machine that we ship generates more "real-world virality" and results in more orders.
- Our hardware and software architecture is designed such that the machines can be updated over time with food, drink, and retail dispensing capabilities.
Volume targets
- 2022: 5 (delivered)
- 2023: 25 (10 already ordered)
- 2024: 50
- 2025: 100
Funding
$17M raised to date
Notable investors include
- David Sacks (Craft Ventures - Series A)
- Jason Calacanis (Launch)
- Chamath Palihapitiya (Social Capital - Series Seed)
- Vinod Khosla (Khosla Ventures)
- Aydin Senkut (Felicis Ventures)
- Antonio Gracias (Valor Equity Partners)
- Peter Thiel (Thiel Foundation)
Founder
Henry Hu
- Grew up in Hong Kong
- Dropped out of college to start Cafe X after spending too much time waiting in line for coffee
- Thiel Fellow
- Forbes 30 under 30
- Business Insider 30 and under tech industry rising star
- Really good at repairing coffee machines and drinking espresso
- @supergeek18 on Twitter