A Robot Barista that can dance - Café X

This is one of my most exciting investments to date. Café X has built a robotic retail hardware, software, and services platform. Initially, they are applying this technology to the $400B specialty coffee market with the Robotic Coffee Bar system, which is capable of making up to six drinks within one minute. The company currently operates these machines at San Francisco International Airport and San Jose International Airport. COVID had put a temporary halt to its progress as airports worldwide have been hit, but both the locations have now reopened and as the world opens up gradually in 2021, we will see these amazing machines everywhere.

Café X uses a robotic arm to both make and serve a variety of drinks. Although coffee tends to be one of the most popular choices, the robot barista can also make tea and other drinks. You can order gourmet coffee and have the robot add organic milk from Clover Sonoma or the Swedish oat milk Oatly. In addition, the robot will entertain you with dancing at the end. Check the video below.

Café X plans on providing this technology to established food and beverage brands. This model allows Café X to focus on building great hardware and software, while letting major coffee and food businesses do the rest. The revenue plan is to make a profit on selling the machine, providing a monthly maintenance cost and also getting a percentage of all sales.

The company has spent the last 5 years optimizing the product, developing a supply chain, establishing a manufacturing process, and creating the operational playbook to select locations and operate its own machines. It is now proven that profitable machines can be launched at high-traffic locations. As the company scales up production, the machine cost comes down significantly and will unlock a mass-market of low to medium volume locations while still being profitable with a short payback period. The scalability is immense, as work is also underway on a pastry shelf accessory module which can be fitted to existing machines to add the ability to serve pastries and retail goods.

Café X is vertically integrated company doing hardware, software, manufacturing, and machine operations, enabling them to iterate and innovate fast. Deep focus on design and quality have also established Café X as the high-end player in the automated coffee space. Café X is led by the young and talented Co-Founder and CEO Henry Hu, who moved from Hong Kong to Silicon Valley to make his robotic barista dreams come true. Market opportunity for the taking: $400B TAM - Specialty Coffee (current focus) $40B TAM - Alcoholic Drinks $2B TAM - Cannabis/CBD Supplements $10B+ TAM - Retail/Merchandise.

Café X competes with Briggo, which first started by serving fully autonomous coffee in 2011 at University of Texas. Both are backed by major VC’s and are together driving automation in F&B retail. There has also been a general sense of doom and gloom cast over the food robot industry in general as Zume shut down its pizza delivery business, and Creator was left stranded and unfunded by Softbank recently.

However, having spent a long time running a large F&B business, I understand how difficult it is to hire, train and retain manpower in this industry and I have no doubt in my mind that we will see a huge shift towards automation especially in food and retail. Café X will be at the forefront of this robotic revolution. While COVID has put a temporary halt to its progress as airports have been hit, it is only a matter of time before the world opens up, and we will see these amazing machines everywhere.

Café X is backed by marquee Silicon Valley investors including Jason’s Syndicate, Craft Ventures, Felicis Ventures, Social Capital, Khosla Ventures and The Thiel Foundation

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