Wunderground Coffee

Wunderground Coffee

Growth Stage

Great tasting coffee that adds wellness to your ritual

Great tasting coffee that adds wellness to your ritual

Overview

Raised to Date: Raised: $600,480

Total Commitments ($USD)

Platform

Rise Up

Start Date

11/16/2023

Close Date

04/29/2024

Min. Goal
$10,000
Max. Goal
$750,000
Min. Investment

$250

Security Type

Equity - Common

Series

Seed

SEC Filing Type

RegCF    Open SEC Filing

Price Per Share

$10.00

Pre-Money Valuation

$79,270,833

Rolling Commitments ($USD)

Status
Funded
Reporting Date

05/04/2024

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

$3,661

# of Investors

314

Momentum
Funded
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Year Founded

2019

Industry

Food, Beverage, & Restaurants

Tech Sector

Non-Tech

Distribution Model

B2B/B2C

Margin

Low

Capital Intensity

Low

Location

Seattle, Washington

Business Type

Growth

Wunderground Coffee, with a valuation of $750,000, is raising funds on Rise Up. The company makes great-tasting coffee that adds wellness to the rituals. Wunderground Coffee roasts coffee beans and enhances them using adaptogenic mushroom extracts to increase the health benefits without compromising on the taste. The products of Wunderground Coffee include Brainchild, Hocus Pocus, Dream Supply, and Brain Wash. Jody Hall founded Wunderground Coffee in October 2019. The current crowdfunding campaign has a minimum target of $10,000 and a maximum target of $750,000. The campaign proceeds will be used for hiring, inventory fulfillment, and operational expenses.

Summary Profit and Loss Statement

FY 2022 FY 2021

Revenue

$888,705

$208,855

COGS

$610,194

$210,313

Tax

$0

$0

 

 

Net Income

$-1,299,363

$-1,836,057

Summary Balance Sheet

FY 2022 FY 2021

Cash

$235,172

$1,103,508

Accounts Receivable

$11,052

$0

Total Assets

$1,337,308

$2,142,469

Short-Term Debt

$0

$51,801

Long-Term Debt

$4,381,645

$3,883,081

Total Liabilities

$4,381,645

$3,934,882

Financials as of: 11/16/2023
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Analyst Report

Synopsis

Coffee is one of the most widely consumed beverages worldwide, with the global coffee market valued at $102.15 billion in 2019 and expected to grow at a compound annual growth rate (CAGR) of 4.2% from 2020 to 2027, according to Grand View Research. However, with the rise of health-conscious consumers, there is an increasing demand for wellness-oriented coffee products that offer additional health benefits.

Wunderground Coffee is tapping into this trend by producing coffee enhanced with adaptogenic mushroom extracts. Adaptogens are natural substances considered to help the body adapt to stress and exert a normalizing effect upon bodily processes. By adding these extracts to coffee, Wunderground Coffee aims to provide a great beverage that contributes to the consumer's well-being.

The company's product offerings include Brainchild, a coffee designed to support cognitive function, focus, and energy, and Hocus Pocus, a coffee formulated to boost mood and immunity. These specialty coffees are available in ground or instant form, with Brainchild also available as whole bean-infused coffee.

Next Section: Price

Price

Wunderground Coffee is raising funds on Rise Up without explicitly sharing the company's valuation on its raise page with investors.

However, our analysts have calculated a valuation of $79 million based on the company's outstanding shares and the $10 price per share. This valuation would be extremely overvalued and unfair to investors, providing low chances of returns.

Investors should note that they are currently offered to invest in the investment vehicle Wundergrounud CF, LLC valued at $750,000,000. This vehicle will then buy convertible notes in Better Science, LLC, the entity owning Wundergournd Coffee's brand.

Next Section: Market

Market

Wunderground Coffee operates in the rapidly growing adaptogenic mushrooms market within the larger food, beverage, and restaurant industry. According to a report by Grand View Research, the adaptogenic mushroom market in the US is valued at $15.9 billion. It is projected to grow at a compound annual growth rate (CAGR) of 11.3%, driven by increasing consumer interest in natural health remedies, rising awareness of the benefits of mushrooms, and heightened stress levels.

The adaptogenic mushroom market witnessed further growth due to the COVID-19 pandemic. Consumers sought immunity-rich foods, leading to a surge in demand for adaptogenic mushrooms. Adaptogenic mushrooms have gained popularity over recent years as a functional food providing health benefits beyond basic nutrition. They are a natural and safe way to support the body's immune system and reduce stress levels.

Wunderground Coffee's unique offering, enhancing coffee beans with powerful adaptogenic mushroom extracts, positions it well to tap into the growing demand for wellness-infused beverages. However, it operates in a highly competitive landscape with established competitors such as Rasa, RYZE, and Four Sigmatic. As the sector becomes more crowded, differentiating the product and ensuring market acceptance will be crucial to Wunderground Coffee's success.

The company targets a niche market of consumers looking for wellness benefits in their daily coffee. This blend of coffee and wellness is a growing trend, particularly among millennials and Gen Z consumers. While the competition is tough, Wunderground Coffee's unique product proposition and the growing trend toward wellness beverages indicate promising potential for the company in the adaptogenic mushroom market.

Next Section: Team

Team

Wunderground Coffee is led by founder and CEO Jody Hall. With an impressive 33 years of relevant industry experience, Hall brings a wealth of knowledge and expertise to the company. Hall has a strong background in operations and marketing, having worked at Starbucks during its growth stage. Her experience and leadership have been instrumental in building Wunderground Coffee into a promising player in the coffee industry.

Hall has assembled a team of passionate experts with decades of experience in the coffee industry. This team includes individuals who have honed their skills at renowned coffee companies such as Starbucks, Stumptown, and Verve. Their expertise in sourcing, roasting, and flavor development sets Wunderground Coffee apart in the market.

One notable member of the team is advisor and Head Formulator Hannah Su, who brings years of research and development experience from Starbucks Coffee. Su played a key role in developing the Bottled Frappuccino product and commercializing Starbucks Via Instant Coffee. Additionally, Jason Sawiki, Head of Operations, brings a strong background in building roasteries, managing supply chains, and driving innovation.

Wunderground Coffee has also attracted notable investors and advisors, including Howard Behar (former COO of Starbucks), Mary Wagner (former Chief of R&D at Starbucks), Craig Russell (former SVP of supply chain and quality at Starbucks), Jim Alling (former President of Starbucks North America), and Eric Hoest (former Vice President of Stumptown).

Overall, the Wunderground Coffee team, led by founder and CEO Jody Hall, possesses a deep understanding of the coffee industry and a strong commitment to delivering great-tasting coffee with added wellness benefits. Their expertise and dedication position Wunderground Coffee for growth and success in the food, beverage, and restaurant industry.

Next Section: Differentiation

Differentiation

Wunderground Coffee sets itself apart in the crowded coffee market by offering a unique product combining great taste and wellness benefits. The company roasts coffee beans and enhances them using adaptogenic mushroom extracts, creating coffee products that promote cognitive function, focus, energy, mood uplift, and immunity.

While other startups in the market, such as Rasa, provide adaptogenic drinks, Wunderground Coffee differentiates itself by focusing specifically on whole coffee beans. This allows them to cater to coffee lovers who want to incorporate wellness into their daily rituals without compromising taste. The company has successfully gained traction in the market, with its products receiving a warm welcome from coffee enthusiasts who appreciate the health benefits provided by mushrooms.

Wunderground Coffee's unique offering positions them well in the market as they tap into the growing demand for functional beverages that provide enjoyment and wellness. With a range of products like Brainchild, Hocus Pocus, Dream Supply, and Brain Wash, Wunderground Coffee offers a variety of options to cater to different consumer preferences.

Although the coffee industry is extremely competitive, Wunderground Coffee's focus on wellness and its ability to deliver a high-quality product sets it apart. With paying customers already in place, the company has demonstrated the potential for growth and success in the market.

Next Section: Performance

Performance

Wunderground Coffee offers a range of specialty coffee products, including Brainchild, Hocus Pocus, Dream Supply, and Brain Wash. These products are designed to provide various wellness benefits, such as cognitive function support, focus, energy, mood uplift, and immunity. The company has received positive feedback and popularity for its products, particularly Brainchild Whole Bean Infused coffee, which allows customers to control the grind of their beans while enjoying the health benefits of mushrooms.

In terms of market traction, Wunderground Coffee has achieved several notable milestones. The company was selected to have a retail space at Seattle-Tacoma International Airport, one of the largest airports in North America. Additionally, six tech companies have expressed interest in bringing Wunderground Coffee to their campuses as part of return-to-work initiatives. Moreover, Wunderground Coffee's Brain Wash product has gained significant popularity at its Seattle cafe and is featured in esteemed roasters' cafes and distributed to their roaster accounts.

Financially, Wunderground Coffee has demonstrated strong revenue growth, with annual revenue reaching $888,705. This represents a remarkable growth rate of 325% since the last round. The company's cash and cash equivalents were reported at $235,172, indicating a solid financial position to support its growth and operations.

Next Section: Risk

Risk

Investing in Wunderground Coffee carries certain risks, primarily due to the low defensibility of its product and the highly competitive market it operates.

One of the key risks for Wunderground Coffee is its low defensibility in the market. The company's product, which combines coffee with adaptogenic mushroom extracts, may face challenges in establishing a unique and sustainable market position. Competitors such as Rasa, RYZE, and Four Sigmatic also offer similar products in the adaptogenic mushroom coffee space, increasing competition and reducing Wunderground Coffee's ability to differentiate itself.

In addition, the market for adaptogenic mushroom products, specifically in the US, is highly competitive. The presence of established competitors with similar offerings poses a challenge to Wunderground Coffee's growth and market share. Building brand awareness and customer loyalty in this competitive landscape may require significant marketing and promotional efforts.

Wunderground Coffee also risks needing a long time to scale production and sales distribution. As the company grows and expands its customer base, it may face challenges in efficiently scaling up its production capabilities and establishing an effective distribution network. Delays or difficulties in scaling production and distribution could hinder the company's ability to meet customer demand and generate revenue.

Furthermore, the low barriers to entry in the market pose a risk for Wunderground Coffee. Other companies can easily enter the adaptogenic mushroom coffee market, potentially increasing competition and market saturation. This could further impact the company's market share and profitability.

Overall, while Wunderground Coffee operates in a high-demand industry, its low defensibility and the highly competitive market landscape pose risks to its long-term success and profitability.

Next Section: Bullish Outlook

Bullish Outlook

Wunderground Coffee is a company that has managed to combine great taste with wellness benefits, creating a unique value proposition in the coffee industry. By roasting coffee beans and enhancing them with adaptogenic mushroom extracts, Wunderground Coffee offers a range of products that satisfy coffee lovers' taste buds and provide additional health benefits. The company's offerings, such as Brainchild, Hocus Pocus, Dream Supply, and Brain Wash, cater to different wellness needs, including cognitive function, focus, energy, mood uplift, and immunity support.

The market potential for Wunderground Coffee is high, particularly within the US adaptogenic mushrooms market. With a growing interest in health and wellness, consumers are increasingly seeking products that offer both taste and functional benefits.

The company has already gained a user base, indicating the appeal and demand for its products. While partnerships have not been established yet, there is potential for collaborations with distributors or retailers to expand its reach further.

Wunderground Coffee has demonstrated promising revenue growth, with annual revenue reaching $888,705.00 and a remarkable annual revenue growth rate of 325.00%. This strong revenue performance showcases the market acceptance and demand for the company's unique offerings.

As a VC-backed company with investment from Veronorte, Wunderground Coffee has the financial support and backing to fuel its growth and expansion plans. The current crowdfunding campaign on Rise Up allows investors to participate in the company's journey.

Overall, Wunderground Coffee's combination of great taste, wellness benefits, and strong revenue growth positions it for future success in the food, beverage, and restaurant industry.

Next Section: Bearish Outlook

Bearish Outlook

Wunderground Coffee operates in a highly competitive food, beverage, and restaurant market. The company faces direct competition from established players like Rasa, RYZE, and Four Sigmatic, offering coffee products infused with adaptogenic mushroom extracts. These competitors have already established brand recognition and customer loyalty, making it difficult for Wunderground Coffee to capture a significant market share.

Additionally, while Wunderground Coffee claims to offer great-tasting coffee with added wellness benefits, the concept of adaptogenic mushroom extracts may not resonate with all consumers. This unique selling point could potentially limit the company's appeal to a niche market, hindering its ability to achieve widespread adoption.

Considering its revenue and financial performance, Wunderground Coffee's calculated valuation of $79 million seems overvalued. The company's low margin level and lack of significant barriers to entry further contribute to the bearish outlook. Without strong differentiation or a clear path to profitability, Wunderground Coffee may struggle to attract sufficient investment and compete effectively in the highly competitive coffee market.

Next Section: Executive Summary

Executive Summary

Wunderground Coffee is a company that specializes in enhancing coffee beans with adaptogenic mushroom extracts to provide health benefits without compromising taste. The company offers two specialty coffee offerings - Brainchild and Hocus Pocus, which aim to support cognitive function, focus, energy, mood uplift, and immunity. These products are available in various formats: ground, instant, and whole bean-infused coffee.

Despite being in the pre-profit stage, Wunderground Coffee has shown significant growth, with an annual revenue growth of 325% and an annual revenue of $888,705. The company has raised over $4 million in prior funding rounds, indicating investor confidence in the business model and the product.

However, the company operates in a highly competitive market, with competitors like Rasa, RYZE, and Four Sigmatic offering similar products. This, combined with low barriers to entry in the industry, could pose challenges to the company's growth and market share.

Additionally, the company's valuation is unclear. This is a risk to investors as they can only try to guess the company's valuation and ay invest at an unfair price. By multiplying the company's outstanding shares with the share price of $10, the company's valuation is at more than $79 million. This would be an extremely high valuation for investors, which is unjustified given that the company sells an enhanced commodity.

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Wunderground Coffee on Rise Up 2023
Platform: Rise Up
Security Type: Equity - Common
Valuation: $79,270,833
Price per Share: $10.00

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