Smart Cups

Smart Cups

Growth Stage

For a Better Planet, Just Add Water

For a Better Planet, Just Add Water

Overview

Raised to Date: Raised: $1,607,739

Total Commitments ($USD)

Platform

StartEngine

Start Date

02/29/2024

Close Date

04/29/2024

Min. Goal
$14,998
Max. Goal
$3,894,502
Min. Investment

$251

Security Type

Equity - Common

Series

Seed

SEC Filing Type

RegCF    Open SEC Filing

Price Per Share

$2.95

Pre-Money Valuation

$57,786,630

Rolling Commitments ($USD)

Status
Funded
Reporting Date

04/30/2024

Days Remaining
Funded
% of Min. Goal
Funded
% of Max. Goal
Funded
Likelihood of Max
Funded
Avg. Daily Raise

$27,250

# of Investors

1,302

Momentum
Funded
Create a free account today to gain access to KingsCrowd analytics.
Year Founded

2023

Industry

Consumer Products, Goods & Services

Tech Sector

Cleantech

Distribution Model

B2B/B2C

Margin

High

Capital Intensity

Low

Location

MISSION VIEJO, California

Business Type

Growth

Smart Cups, with a valuation of $57.79 million, is raising funds on StartEngine. The company has developed a patented delivery system platform that creates sustainable consumer packaged products. Smart Cups uses its novel microencapsulation printing to eliminate liquid from consumer packaged goods and enables their liquidness transportation. The technology helps to reduce carbon emissions, packaging, and global warming and has been featured in FOX, ABC 7, Time Magazine, and Forbes. Chris Kanik founded Smart Cups in February 2023. The current crowdfunding campaign has a minimum target of $14,997.80 and a maximum target of $3.9 million. The campaign proceeds will be used for research and development, inventory, working capital, and company employment.

Summary Profit and Loss Statement

FY 2022 FY 2021

Revenue

$216,510

$391,250

COGS

$361,802

$360,506

Tax

$0

$0

 

 

Net Income

$-2,700,479

$-2,378,204

Summary Balance Sheet

FY 2022 FY 2021

Cash

$90,920

$60,750

Accounts Receivable

$0

$0

Total Assets

$7,474,446

$15,815,254

Short-Term Debt

$1,273,815

$90,007

Long-Term Debt

$1,017,908

$90,007

Total Liabilities

$2,291,723

$180,014

Financials as of: 02/29/2024
Create a free account today to gain access to KingsCrowd analytics.

Raise History

Offering Name Close Date Platform Valuation/Cap Total Raised Security Type Status Reg Type
Smart Cups 04/28/2024 StartEngine $57,786,630 $1,607,739 Equity - Common Funded RegCF
Smart Cups 10/04/2023 StartEngine $10,650,000 $1,211,031 Equity - Common Funded RegCF
Create a free account today to gain access to KingsCrowd analytics.

Price per Share History

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

Valuation History

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.

Employee History

Upgrade to gain access

Pay Monthly
Annually (Save 17%)

Edge

$25 /month
billed annually
Free portfolio tracking, data-driven ratings, AI analysis and reports
Plan Includes:
Everything in Free, plus
Company specific KingsCrowd ratings and analyst reports
Deal explorer and side-by-side comparison
Startup exit and failure tracking
Startup market filters and historical industry data
Advanced company search ( with ratings)
Get Edge Annual
Already a member? Log in here.

Ratings KingsCrowd Startup Rating Methodology Article

Blurred Ratings Bars Blurred Ratings Bars

Analyst Report

Synopsis

In the age of environmental consciousness and the pursuit of sustainability, Smart Cups stands out with a revolutionary approach to consumer packaged goods. The California-based company Smart Cups, Inc. has developed a patented delivery system platform that leverages novel microencapsulation printing technology. This innovative process allows the company to eliminate the need for liquid in various products, fundamentally changing how beverages are packaged and consumed. By adding water to Smart Cups' printed material, consumers can enjoy a range of drinks without the environmental toll of traditional liquid transportation and packaging.

Smart Cups' technology promises to transform the consumer goods industry and addresses critical environmental issues such as carbon emissions, excessive packaging waste, and the broader implications of global warming. The company's commitment to sustainability and innovation has not gone unnoticed, having been featured in prominent media outlets, including FOX, ABC 7, Time Magazine, and Forbes. Additionally, the backing by celebrity chef Gordon Ramsay, following the company's win on Ramsay's Food Stars, underscores the potential impact and market appeal of Smart Cups' technology.

Despite its innovative approach and environmental benefits, Smart Cups faces challenges in demonstrating strong product-market fit through new contracts and justifying its valuation. The company's fundraising campaign on StartEngine, with a pre-money valuation of $57.79 million, aims to raise funds for research and development, inventory, working capital, and employment. This capital injection is critical for Smart Cups to expand its product offerings, refine its technology, and ultimately achieve its vision of reducing the environmental footprint of consumer packaged goods.

With a tagline "For a Better Planet, Just Add Water," Smart Cups encapsulates its mission to provide sustainable solutions for everyday products. As the company moves forward, its ability to scale its technology, secure new partnerships, and effectively communicate its value proposition will be key to realizing its ambitious goals for a more sustainable future.

Next Section: Price

Price

Smart Cups, Inc. is currently valued at $57.79 million, a significantly high valuation given its recent revenue of $216,510 and a revenue multiple of 266.90x. This high multiple suggests that the company's valuation is not primarily driven by its current financial performance but rather by the potential of its patented technology and the associated hype. The company has made notable progress, including launching a new product line with an enterprise customer, securing a portfolio of patents, and achieving recognition through awards and media features. However, the company's revenue has declined by 45% recently, which raises concerns about its current growth trajectory.

Despite limited financial progress, the valuation increase since the last funding round indicates that Smart Cups is leveraging its popularity and investor enthusiasm to increase its valuation and limit the founder and early investor's dilution. 

Given the high valuation and the risks associated with the company's current stage of development, investors should be prepared for the possibility of a longer-term horizon before seeing substantial returns.

Next Section: Market

Market

Smart Cups operates in the vast and evolving US soft drinks market, valued at $132.6 billion. This market is characterized by a slow growth rate of 3.8%, reflecting a stable demand for soft drinks among consumers. However, the industry is also undergoing significant shifts as sustainability and environmental concerns become increasingly paramount among consumers and regulators. These shifts present both challenges and opportunities for Smart Cups, particularly given its innovative approach to consumer packaged goods (CPGs).

Smart Cups' patented delivery system platform differentiates itself through its sustainability angle—eliminating the need for transporting liquid beverages and subsequently reducing carbon emissions and packaging waste. This technology aligns with the growing consumer preference for environmentally friendly products, which has been proliferating across consumer segments. However, despite this alignment with market trends, Smart Cups faces challenges in market acceptance and penetration, attributed to its relatively low visibility and the novelty of its technology compared to established competitors like ULINE, Zuko, and SALTT.

Furthermore, while vast, the soft drinks market is also highly competitive, with a mix of long-standing giants and emerging innovators vying for consumer attention. For Smart Cups, standing out in this crowded space requires showcasing its environmental benefits and demonstrating convenience, cost-effectiveness, and product quality. The company's past features in prominent media outlets such as FOX, ABC 7, Time Magazine, and Forbes suggest an initial successful push in gaining visibility.

Given the current market dynamics, Smart Cups' potential for growth hinges on its ability to leverage its unique value proposition of sustainability and innovation to capture the attention of both the B2B and B2C segments. The B2B segment, in particular, offers a significant opportunity for Smart Cups to partner with corporations looking to improve their environmental footprint. In contrast, the B2C segment allows the company to tap into the growing consumer demand for eco-friendly products. As environmental concerns continue to influence purchasing decisions, Smart Cups’ patented technology positions it well to significantly impact the soft drinks market, provided it can effectively communicate its benefits and scale its operations to meet potential demand.

Next Section: Team

Team

Smart Cups is spearheaded by its innovative founder and CEO, Chris Kanik. Kanik's entrepreneurial journey is marked by a significant achievement that has brought considerable attention to Smart Cups: winning Gordon Ramsay's Food Stars show on Fox. This victory spotlighted the company and secured a $250,000 investment from the renowned chef Gordon Ramsay, marking a notable endorsement from a high-profile investor. Kanik's background, with 12.5 years of relevant industry experience and a degree from a top 100 university, positions him as a capable leader with a blend of technical knowledge and business acumen.

Under Kanik's leadership, Smart Cups has developed a patented delivery system platform that leverages novel microencapsulation printing technology. This innovation aims to revolutionize the consumer packaged goods industry by eliminating the need for liquid products, thereby promising significant reductions in carbon emissions, packaging waste, and global warming impact. The technology has not only garnered attention from major media outlets such as FOX, ABC 7, Time Magazine, and Forbes but has also been validated by the grant of a patent, underscoring its novelty and potential for disruption.

The team at Smart Cups, though small with only five members, has demonstrated its capacity to drive the company's growth and navigate the pre-profit phase effectively. The lack of team growth since the last funding round suggests a lean operation focusing on leveraging its current capabilities and resources to scale. The involvement of a notable investor like Gordon Ramsay, coupled with Kanik's leadership and the team's innovative technology, positions Smart Cups as a promising venture in the consumer products, goods, and services industry, particularly within the US soft drinks market.

Overall, the leadership and vision of Chris Kanik, combined with the strategic backing of Gordon Ramsay and the innovative technology at its core, set Smart Cups apart as a company with significant potential. As Smart Cups continues to grow and expand its market presence, the strength and experience of its team will be crucial in overcoming the challenges of the growth phase and achieving long-term success.

Next Section: Differentiation

Differentiation

Smart Cups stands out in the consumer products, goods, and services industry with its innovative approach to sustainability and packaging. The company's patented delivery system platform leverages novel microencapsulation printing technology to eliminate the need for liquid in consumer packaged goods. This not only reduces the product's weight and volume, significantly cutting down on shipping and storage costs, but it also substantially reduces carbon emissions associated with the transportation of goods. Such advancements position Smart Cups as a pioneer in addressing environmental concerns within the industry, particularly in the context of global warming and excessive packaging waste.

While the market has established competitors such as ULINE, Zuko, and SALTT, Smart Cups differentiates itself through its unique sustainability and innovation value proposition. Unlike these competitors, which primarily focus on traditional packaging solutions, Smart Cups introduces a disruptive technology that transforms how products are delivered and consumed. By enabling products to activate their "liquidness" upon use, Smart Cups not only enhances convenience for the end consumer but also aligns with the growing consumer demand for eco-friendly products.

The traction Smart Cups has gained, including launching a printed pet product line with an enterprise customer, securing a portfolio of patents, and raising over $11 million in funds, underscores the market's recognition of its unique offering. Additionally, accolades such as Time Magazine’s Best 100 Innovations of 2021 and being named California Small Business of the Year in 2020 further validate the company's innovative approach and potential for impact. The company's features in prominent media outlets like Forbes and ABC 7, alongside its CEO's appearance on Gordon Ramsay’s Food Stars, amplify its visibility and credibility in the market.

Next Section: Performance

Performance

With its patented delivery system platform, smart Cups has demonstrated considerable innovation and traction in the consumer products sector. The company's technology, which eliminates the need for liquid in consumer packaged goods through microencapsulation printing, has garnered attention and has been recognized with multiple awards. Smart Cups was listed among Time Magazine’s Best 100 Innovations of 2021 and was named California Small Business of the Year in 2020. These accolades underscore the company's innovative approach and potential impact on sustainability by reducing carbon emissions and packaging waste.

Financially, Smart Cups has raised over $11 million in previous funding rounds, showcasing strong investor confidence in its business model and technology. The company has also successfully partnered with the DEVCOM Soldier Center, indicating its ability to attract enterprise-level customers and expand its market reach. A noteworthy upcoming launch is the printed pet product line with an enterprise customer in Q2, which is expected to diversify Smart Cups' revenue streams further and enhance its market presence.

Despite these positive developments, Smart Cups is still in the pre-profit phase, with an annual revenue of $216,510, representing a 45% decline from the previous year. The company's monthly burn rate of approximately $83,000 against a cash reserve of $300,000 suggests a need for careful financial management and successful execution of its upcoming product launches to achieve sustainable growth. The introduction of new products and expansion into new market segments could serve as critical catalysts for revenue growth and moving toward profitability.

Next Section: Risk

Risk

Smart Cups presents several unique risks that potential investors should consider. Firstly, while innovative, the company's technology is still proving its market acceptance. Despite having users and partnerships, Smart Cups faces a challenge in changing consumer behavior and convincing potential customers of the benefits of traditional beverages. This risk is highlighted by the company's -45.00% annual revenue growth, indicating that gaining market traction may be more challenging than anticipated.

Moreover, Smart Cups' financial health poses potential concerns. With a monthly burn rate of $80,000 and most recent cash on hand at $300,000, the company's current financial runway is short, necessitating an additional capital infusion soon to continue operations. Substantial short- and long-term debt, totaling approximately $2.3 million, further complicates this situation, which could strain future financials and limit operational flexibility.

Additionally, the high revenue multiple of 266.90x suggests that Smart Cups is significantly overvalued relative to its current financial performance. This valuation, coupled with a reported net income loss of -$2,700,479 in the most recent fiscal year, indicates that investors are betting heavily on future growth and market adoption that is not yet evident from current financials.

Smart Cups' innovative approach to reducing carbon emissions and packaging waste through microencapsulation printing technology presents a compelling environmental value proposition. However, the company's ability to scale production and overcome the technological challenges associated with its novel production and quality control processes remains to be seen. The success of these efforts is critical to achieving cost efficiencies and fulfilling customer orders at scale, essential components for sustaining growth and profitability.

Next Section: Bullish Outlook

Bullish Outlook

Smart Cups stands at the forefront of innovation within the consumer products industry, particularly in the US soft drinks market, by introducing a novel microencapsulation printing technology. This patented delivery system platform revolutionizes our thinking about beverage consumption, sustainability, and packaging waste. Despite the company's current pre-profit status and a challenging financial situation with a net income of -2,700,479.00 as of the most recent fiscal year-end, several reasons remain optimistic about Smart Cups' future.

The environmental impact of Smart Cups' technology cannot be understated. The company significantly reduces carbon emissions and packaging waste by eliminating the need to transport liquid beverages, aligning perfectly with the growing consumer demand for sustainable and eco-friendly products. This innovation has garnered media attention from reputable outlets such as FOX, ABC 7, Time Magazine, and Forbes and positions Smart Cups as a leader in environmental stewardship within the consumer goods sector.

The backing of notable investors, including celebrity chef Gordon Ramsay, who has a keen eye for groundbreaking and sustainable culinary solutions, adds a layer of credibility and marketability to Smart Cups. Ramsay's involvement could attract further attention and investment and open doors to strategic partnerships in the food and beverage industry.

Furthermore, Smart Cups' dual distribution model, targeting both B2B and B2C sectors, allows for multiple revenue streams and market penetration strategies. The versatility of its technology offers potential applications beyond the soft drinks industry, including in sectors where reducing liquid transport can significantly cut costs and environmental impact.

Next Section: Bearish Outlook

Bearish Outlook

Smart Cups presents a novel concept in sustainability and consumer convenience, but potential investors have several key concerns. First, the valuation of $57.79 million seems highly optimistic for a company reporting annual revenue of only $216,510, especially considering a dramatic 45% decline in annual revenue growth. This revenue figure, juxtaposed with the company's valuation, suggests that Smart Cups might be significantly overvalued, raising questions about the investment's return potential.

Furthermore, the company's monthly burn rate of $225,039.92, against its most recent cash of $300,000, indicates a precarious financial position. Smart Cups may face sustainability issues soon without significant and immediate revenue growth or additional funding. The negative net income of -$2,700,479 also underscores the company's current struggle to achieve profitability, which is a significant concern for potential investors.

While Smart Cups has secured patents for its innovative technology and has been featured in major media outlets, the lack of transparency regarding new contracts or concrete evidence of strong product-market fit is troubling. Rather than demonstrating substantive business progress, the company's reliance on publicity from winning Ramsay's Food Stars may suggest that Smart Cups is not yet on a solid path to widespread market adoption and profitability.

In addition, the consumer products, goods, and services industry is notoriously challenging, with high competition and customer acquisition costs. Smart Cups operates in a slightly competitive landscape but still faces the challenge of convincing consumers and businesses to adopt its novel product over more traditional alternatives. This adoption challenge and the company's current financial health and high valuation might make the investment less attractive to potential investors.

Next Section: Executive Summary

Executive Summary

Smart Cups, Inc. stands at the forefront of sustainable consumer packaged goods innovation with its patented delivery system platform. The company's unique technology, which employs novel microencapsulation printing, can revolutionize the US Soft Drinks market by eliminating the need for liquid in products, thus significantly reducing carbon emissions, packaging waste, and, ultimately, global warming. Smart Cups focuses on environmental impact and aligns with the growing consumer demand for sustainable products.

Despite its groundbreaking technology and environmental benefits, Smart Cups faces revenue growth and market penetration challenges. The company reported annual revenue of $216,510, with revenue growth declining 45% since the last round. This downturn, coupled with a monthly burn rate of $83,000 and a net income loss of $2,700,479, raises concerns about the company's current financial health and ability to achieve profitability in the near term.

However, Smart Cups has demonstrated significant traction and recognition, having raised over $11 million in previous funding rounds and securing a partnership with DEVCOM Soldier Center. The company has also garnered media attention, being featured in prestigious outlets such as Forbes, ABC 7, Joe Rogan, and Time Magazine, where it was listed among the Best 100 Innovations of 2021. Additionally, Smart Cups won the California Small Business of the Year award in 2020. They were represented by CEO Chris Kanik on Gordon Ramsay's Food Stars, further validating its innovative approach and market potential.

Looking ahead, Smart Cups plans to use the proceeds from its current crowdfunding campaign for research and development, inventory, working capital, and company employment. This strategic investment in growth and operational capabilities will expand its product line and market reach. In Q2, Smart Cups launched a printed pet product line with an enterprise customer, a notable development that could open new revenue streams and market segments for Smart Cups.

In conclusion, while Smart Cups faces financial and market penetration challenges, its innovative technology, environmental impact, and strategic growth initiatives position it as a potential game-changer in the consumer packaged goods industry. Investors should closely monitor Smart Cups' ability to leverage its technological advantages, media recognition, and partnerships to drive revenue growth and achieve profitability.

Disclaimer

The AI-enhanced analyst reports ("AI reports") provided by KingsCrowd are experimental in nature and may exhibit certain limitations and uncertainties. These reports are generated in part or in whole by artificial intelligence algorithms, which have the potential to hallucinate (e.g. generate fictitious information), interpret data incorrectly, omit information, or reference sources of data that may contain inaccuracies.

While we strive to provide reliable and accurate information, it is essential to understand that the AI reports should not be solely relied upon as the basis for making investment decisions. We strongly advise all users to exercise caution, conduct thorough due diligence, and verify data and facts independently before making any investment decisions.

The AI reports are intended to serve as one of the tools in your investment research process, offering additional insights and perspectives, and exposing more of our dataset to customers by transforming that data into natural language. They should be used in conjunction with other sources of information and professional judgment. KingsCrowd does not assume any liability for the accuracy, completeness, or reliability of the AI reports or any investment decisions made based on them.

Investing in startups and early-stage companies involves inherent risks, and it is essential to consult with qualified professionals and seek independent financial advice before making any investment decisions.

By accessing and using the AI reports, you acknowledge and accept the experimental nature of this feature and agree to use it at your own risk.

Please note that this disclaimer may be subject to updates and revisions as we continue to enhance our AI algorithms and improve the accuracy and reliability of the generated reports.

Company Updates

In this company update, we look at Smart Cups announcing a new crowdfunding round on StartEngine at a $57.79M valuation, reflecting on the company’s pivoting business model and state of current collaborations with Compana and the US Army.

View Company Update

Add to portfolio
Smart Cups on StartEngine 2024
Platform: StartEngine
Security Type: Equity - Common
Valuation: $57,786,630
Price per Share: $2.95

Follow company

Follow Smart Cups on StartEngine 2024

Buy Smart Cups's Deal Report

Warning: according to the close date for this deal, Smart Cups may no longer be accepting investments.

Smart Cups Deal Report

Get KingsCrowd’s comprehensive report on Smart Cups including:

  • How our proprietary algorithm rates their current capital raise (1-5 stars)
  • Detailed price, market, team, differentiators, performance, and risk ratings
  • Whether Smart Cups is undervalued or overvalued
  • Scores on the founding team and key personnel's background and expertise
  • Our deep-dive analyst report reviewing the deal's investment potential and bullish vs. bearish outlook

Buy the Smart Cups deal report for only $10!

Email address:
Looking to buy more than one deal report? Get unlimited reports by upgrading to Edge