Massachusetts-based coffee tech startup Cometeer raised another $35 million in their Series B funding round, following their first Venture Capital raise in April 2020. The company will use the funding to finish building its headquarters in Gloucester, Massachusetts, as well as expanding its team and roaster partnerships.
Cometeer transforms coffee beans into flash-frozen pucks. These pucks are cryogenically frozen using liquid nitrogen and are sealed in capsules, which keeps the flavours intact.
To make the coffee, pods can be brewed by melting the pucks by dropping them in either hot or cold water. The pods are able to stay fresh for up to 3 years when kept in the freezer, or up to 3 days when kept in the refrigerator.
The latest funding round is the largest investment so far, bringing the raised total to $100 million. The company declined to reveal its valuation and revenue.
Cometeer will use the funds to finish its headquarters of 70,000-square-foot in Gloucester, Massachusetts. The startup also plans to expand its team — since the previous round of funding, the number of workers went from 12 to 120.
We’re hiring folks from Apple, Tesla, Palantir and Wayfair. We are talking about real tech companies, real tech employees coming into the coffee industry because they see the opportunity to change an industry that’s really been stuck in its old ways.
Co-founder and CEO of Cometeer Matt Roberts
Cometeer sources its coffee beans from speciality roasters in the US, making sure that the roasters they are partnering with pay coffee farmers “above the fair trade minimum”. The latest funding will also focus on expanding their roaster partnerships. Roberts explained:
Our roasting partners are the backbone of Cometeer. Equally as important as superior tasting roasts, considerations amongst our roasters is their support of coffee farmers, and commitment to direct trade purchasing at equitable prices multiple times the fair trade minimum.
We are focused on building out a diverse group of roasting partners with unique backgrounds, sourcing techniques and roasting styles. Alongside these partners, we look to support the de-commoditization of the coffee industry.
Co-founder and CEO of Cometeer Matt Roberts
The coffee market is huge, but I’m sceptical that they can recoup this investment through organic growth. To prepare an IPO, they should show real traction in the market and rapid growth potential.
But I don’t see the problem they’re trying to solve. The company says it makes the perfect grind and then locks in freshness, but the cheaper end of the market won’t care enough to pay $2 a coffee when they can get one for less than half that from the competition, and the higher end of the market will likely want to continue making their own coffee.
While the startup is focused on direct-to-consumer at the moment — there are four types of roast to choose from, with a base shipment of 32 capsules for $64 as a monthly subscription — Cometeer is also piloting B2B coffee solutions, and perhaps this might hold more opportunities for them.
Don’t think a subscription service will work – I liked it but don’t want to commit to use a single product or brew method exclusively. Would buy it on an “single purchase basis” as needed, even if the price were a bit higher than a subscription.
Thanks for your thoughts Stephen. They might sell them by the box, perhaps through retailers, in the future, but not if the subscriptions are selling well. Subscription-based businesses create annuity revenue, which investors and the stock market loves. But personally, as you can tell, I’m far from convinced the world needs a frozen coffee business.