This Healthy Capsule Machine Could Disrupt the Food Tech Market | CUBO
Considered the "Nespresso of Healthy Beverages", CUBO aims to provide affordable, high quality, hot and cold drinks worldwide.
What Is Cubo?
Cubo built a revolutionary machine that uses frozen pods to create healthy hot and cold beverages. From soups, mushroom coffee, and matcha lattes to protein smoothies and juices, We believe Cubo delivers an incredible product at an affordable price with clean ingredients.
My Cubo Experience
I met Grishka, the CEO, at an investor poker event in LA.
I was skeptical of how they could engineer a delicious product from a frozen pod in a machine. But after a quick demo, I was hooked. It's fast, affordable, healthy and tastes great.
Check out my experience testing CUBO in person!
The Problem
The modern, health-conscious professional struggles to find options on the go, at work, or their favorite hotel. Restaurants and service businesses need time, labor, and specialized knowledge to produce a myriad of healthy products.
At the same time, food service operators are struggling with:
Rising Labor Costs
Tightening Profits
Rising Food and Beverage Costs
Recruiting new employees
The Solution
CUBO delivers by providing fast, affordable, and great-tasting beverages with clean ingredients.
In Phase 1, CUBO will focus on businesses.
Restaurants, for example, benefit immensely from CUBOs soup selection alone. A great-tasting and healthy frozen pod of pumpkin soup costs the restaurant $3.50, but they can turn around and sell it for up to $12.
This comes with no labor costs, time required for prepping or cleaning (CUBO has a self-cleaning mechanism), or risk of food expiration.
Gyms and hotel spas can now offer their guests a wide range of healthy options for any time of the day, without the risk, of time, staff, or hassle.
Businesses can impress their employees and customers with luxury health perks from CUBO by simply having a machine and a few pods in the kitchen.
In Phase 2, CUBO will go directly to consumers. Nicolas, the founder, invented CUBO as a solution for his children to eat healthy options for breakfast, which could be easily made, and required no cleanup.
People can use CUBO several times per day: in the morning for coffee, after a workout for a smoothie, in the afternoon for juice, and in the evening for soup.
The Market Opportunity
In 2022, the food service industry in the United States generated sales exceeding $900 billion.
Within this industry, the juice and smoothie market presents a substantial opportunity, with the potential to capture over $650 million in revenue by achieving just a 1% market penetration.
Beyond juice and smoothies, the global functional beverages market exhibited impressive growth in 2022, reaching an estimated value of approximately $140.87 billion.
Projections indicate that this market is set to expand even further, doubling to $279.4 billion by 2030.
This growth is expected to occur at a steady Compound Annual Growth Rate (CAGR) of 8.94% from 2022 to 2030.
CUBO Business Model and Traction
Cubo uses the 'razor blade' model, creating multiple sources of profit. First, it sells the machine and then benefits from a lifetime reoccurring revenue stream through the frozen pods.
CUBO prides itself on “experiential marketing” and the feedback has been overwhelmingly positive once people taste it for themselves.
CUBO is already testing its testing it’s products in major SoCal hotels such as Hilton, Ritz Carlton, and Marriott, as well as a diverse range of businesses including a dance studio, co-working space, restaurant, coffee bar, spa, golf club, and more.
The current limiting factor to their scaling is the limited number of machines. Their first small batch of 40 prototypes was a successful "Proof of Concept" phase. They are now ready to expand.
Contracts are already pending with several partners totaling a potential of over 100,000 CUBO machines in a diverse range of businesses, from hotels and coffee shops to restaurants and gyms.
The list of potential partners includes Foodness (40,000 locations in Italy), Luckin Coffee (14,000 locations, with 1,000+ openings every month in China), and Fagor Professional (50,000+ hotel clients).
Healthy Beverage Competition
Their IP is protected due to their patents.
Examples of partial competition include F’real which produces cold milkshakes and Smoodie for smoothies.
However, these competitors have problems that can't be solved due to their technology, including:
Cannot cover multiple uses per day (they cannot produce both hot and cold beverages).
Very expensive tech, meaning it takes years for a buyer to recover their investment.
For example, a Smoodie machine costs $14,000 vs. CUBO's which is $500.
No focus on Wellness. For example, F'real sells comfort food, like “Snickers Milkshakes”.
Founders & Team
Nicholas Blatt, the Founder & President is a serial entrepreneur with $1B in revenues across his businesses. He's a mechanical engineer by trade with a passion for solving big problems.
Grichka Frachisse, the CEO, possesses extensive expertise in go-to-market strategy, spanning the domains of food, technology, and finance. Originally from France, he has lived in Spain and Canada and now resides in Los Angeles, CA.
Denis Fonseca, the Co-Founder & COO, is an electrical engineer and C-level executive with a fervent drive to transform concepts into prosperous products and services. He spent three years in China supervising machine development and currently lives in the U.S., where he established pod manufacturing and distribution.
Their board of advisors includes the former President of Illy Caffé, former head of Global Nestle R&D, a food scientist with 35+ years of experience, and a neuroscientist who formulates their recipes.
Note: The valuation cap of the convertible note is $30M or a 20% discount on the next funding round, whichever is lower. The interest on the convertible note is 9.5% per annum.
How to Invest in CUBO
I am syndicating this deal on AngelList through my syndicate, WHealthier. To participate, you must be an accredited investor. Setting up an account is a quick process, and they take care of all the paperwork for us.
Once you join the syndicate, you can download the deck which has more information about CUBO’s marketing efforts, use of funds, growth projections, and more.
To get started, create an account, provide your accreditation documents, connect your bank account, and you're set to go with just a few clicks.
Join the syndicate here. Once you do, reach out with any questions.
Alec