This blog introduces our current co-investment opportunity, Slurp Ltd, and was written by Co-founder and CEO, Tero Rehula. Interested in co-investing with us? Visit our platform and download the investor material.
Who are you and What is Slurp?
Slurp is a Helsinki based tech company that has developed a dropship marketplace for specialty coffee. Our coffee subscription service delivers the most delicious artisan coffees straight to your home or workplace. Our selection already covers 20 artisan roasters, who ship the freshly roasted coffee straight from their roasteries to our customers.
It all started in 2014 when the three of us founders; Manuel, Rafael and myself, found a mutual vision for a coffee company of the future. We realized that coffee contains more flavour components than wine and can actually taste insanely good. But that’s not the coffee you can find in supermarkets. Back then, there were already a dozen independent artisan roasters in Finland, but acquiring their coffee was difficult.
We believed that anyone who drinks coffee would most definitely fall in love with the high quality artisan coffees, if only they had easy access and could taste it themselves.
It made a lot of sense to start Slurp in Finland in 2015, because we Finns consume more coffee per person than any other nation in the world. However, the core competence of our company is in tech, that’s what makes it possible to scale the business worldwide. In our big picture, Finland is only a small test market for the coffee-as-a-service concept.
What is the current market situation and your competitive advantage?
Technology has ultimately changed our daily life. If we think about companies like Uber, Spotify and AirBnb, they’ve changed their respective industries completely in the past few years due to their technology driven platforms. The same is already true with food delivery services and the market disruption is coming to grocery shopping as well. In regards to the coffee market, there is eventually going to be a global dominant marketplace, connecting the best roasters straight to consumers who love great coffee. That’s Slurp.
The global coffee market is worth more than $200 billion, of which the specialty coffee segment accounts already for more than $10 billion. The specialty coffee industry is a relatively new market, but it’s growing fast. During the past five years, the number of specialty coffee roastery companies has exploded in all relevant markets like in the US, the UK, Germany, Japan and the Nordics.
We are not alone in having recognized this huge market opportunity. In Europe, other coffee delivery companies are targeting mainly domestic markets and unlike us, they lack advanced technology. They are more like local clubs founded by coffee geeks. In the US, a few competitors are utilizing more advanced technologies by providing better user experience. But currently, there’s no single dominant market player. Instead there are several smaller companies competing with each other within the US and they haven’t expanded to Europe. As a conclusion, Slurp is a frontrunner in a very attractive and fast developing specialty coffee market.
The key benefits Slurp’s service provides users:
» Individual experiences and personalization
» Wide and varying selection of roasters and coffees
» Both beans and pre-ground option available
» Convenient envelope shipping to the mailbox
» Coffees are delivered as fresh as possible, directly from the supplier
» All inclusive service experience to B2B clients
» Learning with Slurp, access to additional information and expertise
Due to these unique features and our outstanding customer service, our customers simply love us. Our net promoter score (NPS) is extremely high 78 (8/2018) and we have full 5.0 / 5.0 reviews from +100 people on Facebook. This customer satisfaction is also reflected on our average monthly churn rate which is as low as 4%. That’s the best part of the business.
From a roaster’s point of view, our platform is a no-brainer. We provide them ever increasing order volumes with no marketing or sales efforts needed from their side. Through us, they are able to increase their brand awareness amongst their important target audience: people who love great coffee. What’s even more, Slurp takes care of packing materials, logistics and customer service. The only thing roasters have to do is roast and package the coffee on a regular basis. We take care of the rest.
Why are you raising funding?
Since launching Slurp in 2015, we’ve been able to more than double our revenue each year, reaching near EUR 900 000 in 2018. We’ve also developed our own proprietary platform that fully automated all deliveries, and ultimately enables us to scale at an exceptional speed. We’ve also found a solid formula for our customer acquisition that gives us 3,8 times back for every euro we invest in marketing.
The global coffee market size is enormous and we have a realistic plan to become the number one online coffee marketplace within a few years. We are aiming high because for us, it’s both possible and realistic. Continuing our steady growth rate is essential for increasing our possibility of achieving the global first mover advantage. That’s why we have decided to raise funding for supporting our growth and product development.
We raised our first financing round in 2017 after building and proving that our business model works. Completing that investment proved to be easier than expected and it all happened very quickly. Through securing our first experienced investor, Mika Mäkeläinen, we were able to bring on other investors quickly. Everyone we met, invested in us. And they will also back us again on this new round with an additional EUR 200 000 investment.
When we started planning this round, we knew that this is possibly the last round where we have the opportunity to bring on private investors. Additionally, it was very important for us to have a strong lead investor who has experience taking companies to the next level and helping them with later financing rounds. Since the first meeting with Innovestor, it’s felt like a perfect match.
This is only the beginning of our journey. Visit Innovestor’s co-investment platform and download our investor material.
CEO & Co-founder, Slurp