Smart Cups

Smart Cups

Early Stage

For a Better Planet, Just Add Water

For a Better Planet, Just Add Water

Overview

Raised this Round: Raised: $1,211,031

Total Commitments ($USD)

Platform

StartEngine

Start Date

07/09/2023

Close Date

10/05/2023

Min. Goal
$14,999
Max. Goal
$1,234,999
Min. Investment

$250

Security Type

Equity - Common

Series

Seed

SEC Filing Type

RegCF    Open SEC Filing

Price Per Share

$0.65

Pre-Money Valuation

$10,650,000

Year Founded

2023

Industry

Consumer Products, Goods & Services

Tech Sector

Cleantech

Distribution Model

B2B

Margin

High

Capital Intensity

Low

Location

MISSION VIEJO, California

Business Type

Growth

Smart Cups, with a valuation of $10.65 million, is raising funds on StartEngine. The company has developed a patented delivery system platform to create sustainable consumer packaged products. The Smart Cups technology uses novel microencapsulation printing and enables liquidless transportation of consumer packaged goods. Smart Cups has collaborated with UCLA and has been featured in Time Magazine, Gordon Ramsay’s Food Stars, Forbes, and ABC 7. Chris Kanik founded Smart Cups in February 2023. The current crowdfunding campaign has a minimum target of $14,999.40 and a maximum target of $1.23 million. The campaign proceeds will be used for research and development, inventory, company employment, and working capital.

Summary Profit and Loss Statement

FY 2022 FY 2021

Revenue

$216,510

$391,250

COGS

$361,802

$360,506

Tax

$0

$0

 

 

Net Income

$7,287,553

$-2,259,404

Summary Balance Sheet

FY 2022 FY 2021

Cash

$90,920

$60,750

Accounts Receivable

$0

$0

Total Assets

$7,100,877

$15,815,254

Short-Term Debt

$330,747

$90,007

Long-Term Debt

$1,291,300

$0

Total Liabilities

$1,622,047

$90,007

Financials as of: 07/09/2023
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Raise History

Offering Name Close Date Platform Valuation/Cap Total Raised Security Type Status Reg Type
Smart Cups 09/15/2024 StartEngine $59,145,650 $210,445 Equity - Common Active RegCF
Smart Cups 04/28/2024 StartEngine $57,786,630 $1,602,564 Equity - Common Funded RegCF
Smart Cups 10/04/2023 StartEngine $10,650,000 $1,211,031 Equity - Common Funded RegCF
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Revenue History

Note: Revenue data points reflect the latest of either the most recent fiscal year's financials, or updated revenues directly from the founder, at each raise's close date.

Valuation History

Price per Share History

Note: Share prices shown in earlier rounds may not be indicative of any stock splits.

Employee History

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Synopsis

Smart Cups is a company leveraging innovative technology to disrupt the consumer packaged goods industry. Its patented delivery system uses microencapsulation printing to create sustainable products by eliminating the need for liquid transportation. This technology allows Smart Cups to print the ingredients of a beverage inside a cup. When water is added to the cup, the printed ingredients activate and create a drink. This approach significantly reduces the weight and volume of products during transportation, reducing carbon emissions and costs.

Smart Cups' technology has been recognized and praised in various media outlets, including Time Magazine, Forbes, and ABC 7. The company has also collaborated with UCLA, further validating its innovative approach.

SmartCups started by selling energy drinks through its D2C channel. It signed a white-label contract to print pet supplements in recyclable pet bowls for Compana Pet brands. The deal should bring a couple of million of dollars in revenues to Smart Cups.

Smart Cups' current crowdfunding campaign on StartEngine has a minimum target of $14,999.40 and a maximum target of $1.23 million. The funds raised will be used for research and development, inventory, company employment, and working capital. This funding will help Smart Cups continue to innovate and disrupt the consumer packaged goods industry.

Next Section: Price

Price

Smart Cups is raising funds at a valuation of $10.65 million. The valuation seems relatively high, given the company's current revenue of $216,510, a revenue multiple of 49.19. However, per Chris Kanik, founder and CEO, Smart Cups set up its valuation before signing its contract with Company Pet Brands. This deal could bring a couple of million dollars in revenue to Smart Cups, making its valuation feel like a discount.

Next Section: Market

Market

Smart Cups currently operates in the soft drinks market. It is a massive and mature industry that's expected to reach $132.6 billion in the US by 2025. Despite this size and maturity, the market is gradually growing at 3.8% annually. This continued growth is likely due to the rise of healthier, alternative beverages satisfying consumer demand for variety and nutritional value.

However, Smart Cups' white labeling system opens the doors to enter various markets like the mouthwash, medicine, or pet supplement markets. While all these industries are mature, Smart Cups' innovation has already triggered large corporations' interest. The company could enter these markets by helping these corporations renew their offerings.

Smart Cups' innovative technology uses novel microencapsulation printing, eliminating the need for liquid in transporting consumer packaged goods. This technology reduces transportation costs and carbon footprint and increases shelf life, offering a significant advantage for businesses. Large corporations' current pledges of carbon neutrality could increase their interest in Smart Cups to lower their transportation emissions.

Despite these potential advantages, market acceptance is currently low, suggesting that significant work may still be needed to gain traction and increase consumer awareness and acceptance of Smart Cups' products. Customers will be surprised by this different offering. Some could be bothered by the additional waste generated and may not understand the fossil fuel savings during the transportation of Smart Cups' products. Also, many customers could simply not be interested in changing their habits from using bottles to cups. While Smart Cups has growth opportunities through white labeling in various drinks and liquid products markets, it faces a big adoption risk.

Next Section: Team

Team

The founder and CEO of Smart Cups is Chris Kanik. Kanik has a strong background in science and chemistry, which has been instrumental in developing Smart Cups' patented delivery system platform. Kanik's passion for innovation and sustainability has driven the company's mission to create sustainable consumer packaged products.

Smart Cups also benefits from the expertise of key team members. Matt Bottomly, an IP attorney with extensive experience at the US Patent and Trademark Office (USPTO), is crucial in protecting the company's innovative technologies and intellectual property. Bill Davidson, an aerospace industry veteran, and fellow Cornell University alumnus, oversees engineering efforts to ensure the precision and reliability of Smart Cups' groundbreaking processes. With nearly two decades of experience in the medical industry, Owen Dolan brings expertise in engineering and logistics to develop efficient manufacturing processes and ensure seamless product distribution.

Next Section: Differentiation

Differentiation

Smart Cups stands out in the consumer packaged goods industry with its unique, innovative, and disruptive technology. The company has developed a patented delivery system platform that utilizes microencapsulation printing to create sustainable consumer packaged products. This groundbreaking technology allows Smart Cups to eliminate the need for traditional liquid-filled containers, significantly reducing waste and environmental impact. Smart Cups has pioneered innovative, precise ingredient dosing through printing by leveraging its proprietary printing process.

Smart Cups' technology has broad applications across multiple industries, including pharmaceuticals, nutraceuticals, cosmetics, and even humanitarian aid. This versatility sets the company apart from competitors that focus solely on beverages. Smart Cups' vision extends beyond just a single product, aiming to revolutionize how various products are delivered and consumed.

One of the key differentiators of Smart Cups is its commitment to sustainability. The company utilizes plant-based PLA materials for its cups and continuously explores even more eco-friendly options. Smart Cups takes pride in reducing environmental impact and is actively pursuing innovative solutions to enhance its sustainability practices further.

Next Section: Performance

Performance

Smart Cups has made significant progress since its inception. The company has sold $3 million of products directly to consumers, proving the market's acceptance and demand for its unique technology. This initial success has validated Smart Cups' viability and attracted the attention of Fortune 500 companies, showcasing the potential of its groundbreaking technology across various industries.

Smart Cups' marketing efforts have significantly built customer awareness and adoption. Being recognized on Time Magazine's prestigious Best Inventions of list and featured on Gordon Ramsay's Food Stars has brought valuable visibility and credibility to the company.

Smart Cups is in white-labeling and licensing discussions with larger companies. It signed a contract to supply pet supplement bowls to Compana Pet Brands. This deal could quickly generate a few million dollars in revenue for Smart Cups. These partnerships will also allow Smart Cups to leverage the infrastructure and marketing resources of these companies to gain wider consumer adoption, creating a mutually beneficial relationship.

Smart Cups' patented delivery system platform, utilizing microencapsulation printing, has garnered attention and accolades. The company's collaboration with UCLA further validates its technology. Smart Cups has raised $10 million in funding and has a valuation of $10.65 million.

Despite its promising progress, Smart Cups has not yet achieved profitability and only generated $216,510 in revenues in 2022, a decrease compared to its 2021 $391,250 revenue.

Next Section: Risk

Risk

Smart Cups is a relatively high-risk investment that should be carefully considered. The most important risk is the adoption risk. While Smart Cups has developed innovative technology, the market's response to its D2C energy drinks didn't grow considerably over the last few years. This indicates that consumer adoption and demand may not be as strong as anticipated. Customers might be skeptical and reluctant to adopt a new way of transporting drinks. Some may find it unpractical. Additionally, Smart Cups is still in the early stages of development, and scaling production to meet demand may present challenges. The company must invest significant time and resources to ensure efficient production and maintain product quality control.

Financially, Smart Cups has experienced negative revenue growth and has only four months of runway - without including the money raised in this current round. This may pose financial risks if the company's pet supplement deals don't bring millions of dollars in revenue as Chris Kanik expects.

Overall, investing in Smart Cups presents an opportunity to support an innovative company in the consumer products industry. However, prospective investors should consider the risks associated with market acceptance, production scalability, competition, financial performance, and regulatory compliance.

Next Section: Bullish Outlook

Bullish Outlook

Smart Cups has developed an innovative and environmentally sustainable solution for consumer packaged products. The company's patented delivery system platform, utilizing microencapsulation printing, eliminates the need for liquid in its products. This promotes sustainability by reducing waste and offers unique advantages in transportation and storage.

The company's collaboration with UCLA further solidifies its credibility and potential for future growth. By leveraging the expertise and resources of a renowned institution, Smart Cups can continue to advance its technology and expand its product offerings. Smart Cups' contract with Company Pet Brands could bring millions of dollars in revenue in the next few months if the product interests customers. If the deal were a success, Smart Cups' current valuation of $10.65 million would appear like a discount.

While Smart Cups is evolving in mature markets, it is important to note that the company has the potential to offer a new product that may trigger consumers' interest. This approach allows Smart Cups to differentiate itself and capture a specific audience that values sustainability and innovation.

The market entry barriers are high due to Smart Cups' patented technology and partnerships with reputable institutions. This gives the company a competitive edge and positions it well for future growth and market dominance.

In conclusion, Smart Cups' innovative technology, focus on sustainability, and strategic collaborations position it as a promising player in the consumer packaged products industry. With its unique offerings and strong potential for profitability, Smart Cups has the opportunity to disrupt the market and capture a loyal customer base.

Next Section: Bearish Outlook

Bearish Outlook

While Smart Cups has an intriguing concept with its patented delivery system platform, investors should consider several red flags. Firstly, the company has experienced negative revenue growth of -45% in its most recent fiscal year. This decline in revenue raises concerns about the demand for Smart Cups' products in the market. Additionally, the company's annual revenue of $216,510 is relatively low, especially considering its valuation of $10.65 million. This suggests that the company may be overvalued, making it difficult for investors to realize significant returns.

Furthermore, Smart Cups' burn rate is a cause for concern. The company is burning $40,000 monthly, a significant amount considering its limited cash. With only $150,000 available, Smart Cups may struggle to sustain its operations and meet its financial obligations depending on the amount it raises on StartEngine. If the company cannot generate sufficient revenue or secure additional funding, it may face liquidity challenges and potential insolvency.

Next Section: Executive Summary

Executive Summary

Smart Cups is a consumer goods company that has developed a patented delivery system for creating single-use sustainable consumer packaged products. It sells both through a direct-to-consumer channel and white labeling. Its unique technology uses microencapsulation printing to eliminate the need for liquid transporting consumer goods. This innovative approach reduces the environmental impact of product transportation and offers a novel and convenient way for consumers to engage with products.

The novelty of Smart Cups products brings adoption risks, like any new technology. Investors should be aware that Smart Cups' direct-to-consumer sales of energy drinks brought relatively low and declining revenues to the company. Therefore, whether consumers will adopt the company's white-labeling products is uncertain.

Hopefully, Smart Cups already see significant interest from various large corporations for white labeling opportunities. While most of these discussions are under confidentiality agreements, investors can know that Smart Cups signed a contract to provide pet supplements to Compana Pet Brands. If customers adopt the product, the deal could bring a couple of million dollars to Smart Cups in the next 12 months. In that case, its pre-money valuation of $10.65 million would be a good deal for investors.

Smart Cups operates in several mature markets, like the energy drinks, mouth wash, and pet supplement markets. As a unique and innovative company, it has the potential to disrupt consumer habits in these markets and gain market share.

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Founder Profile

Printing the Future: How Smart Cups is Changing the Beverage Industry

Convenience and sustainability rarely go together. Smart Cups is trying to change this paradigm. The company is “printing” the ingredients of liquids - such as energy drinks, medicine or mouthwash, at the bottom of single-use cups. The cups are made of compostable plastic or paper. Their light weight allows for fuel savings during transportation.

We reached out to Chris Kanik, founder and CEO of Smart Cups, to learn more about how the company is trying to transform the drink experience.

Note: This interview was conducted over phone and email. It has been lightly edited for clarity and length.

Read Founder Interview

Add to portfolio
Smart Cups on StartEngine 2023
Platform: StartEngine
Security Type: Equity - Common
Valuation: $10,650,000
Price per Share: $0.65

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Follow Smart Cups on StartEngine 2023

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