Rarebird
Contact: AD Andracchio
Address: 500 West 5th St, Winston-Salem, NC 27107, 4th Floor
Phone: +1 (252) 903-5881
Email: [email protected]
Website: https://rarebird.coffee
Management
Jeffrey Deitrich, PhD; CEO, Co-Founder & Chairman; 2x Y Combinator Founder (formerly founded Lygos)
AD Andracchio, CBO, Co-Founder & Director; ex-Restaurant Brands International & Searchlight Capital
Sam Lilley, Marketing Director; Ex-Restaurant Brands International
Evan Eichstaedt, Chief of Staff; Ex-Searchlight Capital & Barclays
Key Advisors/Board Members
Major Cohen; Lead Coffee Advisor; Starbucks veteran; author of Coffee for Dummies
Bruce Maxwell; Fractional CFO; Ex- Portfolio Company CEO for Kleiner Perkins, Sequoia, et al.
Taylor Foxman; Advisor; Founder & CEO of The Industry Collective; Partner, Alethia Ventures & MacArther Capital
Industry
Year Founded
2020
Number of Employees
FT: 5
Contractors: 5
Bank
Brex
Law Firm
Current Investors
AgFunder (~$2.0Mn, lead by Rob LeClerc); First Round Capital (~$1.5Mn, led by Josh Kopelman); Management (~$150K); National Science Foundation ($275K, non-dilutive); and others
Monthly Burn Rate
Financing Sought
Use of Funds
N/A: not actively fundraising. Majority of any funds raised opportunistically will go towards scaling operations, sales & marketing.
Business Description
By taking inspiration from our body’s natural processes, Rarebird makes improved versions of $100Bn+products. We’re starting with coffee.
Company Background
Rarebird was founded in 2020 by two caffeine-sensitive entrepreneurs looking for a fix for their morning fix. Jeffrey Dietrich received his PhD at UC Berkeley (where he collaborated with Frances Arnold of Nobel Prize fame), before going on to start another successful startup, Lygos. NC native AD Andracchio worked at Searchlight Capital as a value investor and then went on to Restaurant Brands International, where she led the Impossible Whopper program.
AD and Jeffrey were introduced by Rarebird investor Josh Kopelman of First Round Capital. Bonding over their shared caffeine sensitivity and passion for food tech, Jeffrey and AD decided to find a solution to caffeine’s downsides, a quest that ultimately led them to Px Coffee.
Problem/Solution
Products/Services
Rarebird makes Px coffee. It’s coffee, but a whole lot better. Instead of caffeine, our patented coffee contains Px, the world’s first caffeine replacement that doesn’t interrupt your morning ritual. The coffee tastes and is brewed like any coffee; the difference is in how you feel afterwards. Compared to regular, caffeinated coffee people who’ve switched to Px feel better during the day and sleep better at night. That’s because unlike caffeine, Px doesn’t make you feel jittery, anxious, or over-caffeinated. Px is also metabolized faster than caffeine so you can drink Px coffee later in the afternoon without it affecting your sleep quality.
Technologies/Special Know-how
Markets
Two-thirds of American adults drink coffee daily, making coffee the second most consumed beverage in America, trailing only water. The US Coffee market size stood at >$80Bn in 2021, with an expected compound annual growth rate of 6% through 2025, when it is estimated to generate >$100Bn in total revenues.
Customers can feel the difference when they switch to Px Coffee, with ~85% responding that they feel better when they drink Px Coffee vs. caffeine. Assuming Px coffee can capture just 10% of a ~$100Bn US coffee market, Rarebird would generate ~$10Bn in annual sales.
Competition
~50% of people are caffeine-sensitive and many of those have tried to quit drinking caffeinated coffee. In this regard, Rarebird may at times compete with other self-proclaimed “caffeine alternatives” (e.g., MUD\WTR). These “alternatives,” differ from Rarebird’s Px Coffee in three main ways: (1) they do not feature any real caffeine substitute and thus lack the uplift effect the consumer expects from caffeine; (2) they are not coffee (i.e. they are made of mushrooms, spices etc.) and thus are not made like coffee and do not taste like coffee; and (3) their unit economics impede their ability to reach the mass market (e.g. a 12 Oz. bag of coffee contains ~30 servings; 30 servings of MUD\WTR costs ~$55).
Rarebird is differentiated because Px coffee features the first caffeine replacement that doesn’t interrupt your morning ritual. The coffee tastes and is brewed like any coffee; the difference is in how you feel afterwards. Further, in 1Q24, Rarebird’s Px COGS will decrease to the equivalent of an added $0.82 per 12 Oz bag of coffee, which gives us the long-term ability to price competitively in the mass market.
Px coffee features the first caffeine replacement that doesn’t interrupt your morning ritual. The coffee tastes and is brewed like any coffee; the difference is in how you feel afterwards.
Business Model and Distribution Channels
Today Rarebird sells direct-to-consumer on our website and via Amazon. Rarebird launched $18 subscriptions in 4Q23. Subscriber retention to-date is ~65%. Given the high lifetime value of coffee drinkers, the habitual nature of coffee consumption, and the high value to weight ratio of coffee, we plan to grow the DTC business to >$1Mn in ARR in 2024.
Rarebird also has strong B2B potential. Because Px Coffee has less negative impact on sleep than caffeinated coffee. Px Coffee could be a good solution to the afternoon sales slump many major food chains see today. ~50% of customers say that they drink more Px Coffee in the afternoon vs. caffeinated coffee. Rarebird will begin B2B testing with a multi-unit regional brand in 2024.
Long-term, we expect Px Coffee to be sold everywhere caffeinated coffee is sold.