Bloomberg debunked business model of a startup that managed to raise $120 million. American startup Juicero produces cold pressed juicer with built-in Wi-Fi that make drinks from fresh fruit and vegetable mixes. Mixes are Packed in branded bags Juicero.
To squeeze the juice, you need to fix the bag in the juicer and press the button. The machine reads the QR code on the back of the pack and checks the expiration date of formula. If the package was stored for more than six days, the juicer will refuse to work.
To make juice with hand cut vegetables and fruit juicers can not — only branded bags Juicero. Juicer costs $400, packing with mix — $5-8. Mix only sell to the owners of the juicers. Founder Juicero Doug Evans — a supporter of healthy eating.
In 2002, he became one of the founders of Organic Avenue is a chain of stores-boutiques that sell natural products. After working in business for ten years, Evans has sold a controlling stake to the investor, who ousted him from his position of Director General. The company went bankrupt. New idea Evans Juicero attracted investments.
In 2015 a group of venture capital from Google and other investors have invested in a startup of about $120 million. Entrepreneur Brian Frank, which invests in companies related to food and appliances, says. Investors are attracted to business, which combines a one-time sale of equipment and the constant need to buy supplies packaging.
Bloomberg notes that in 2016 Juicero attracted one of the largest investment rounds for startups developing device. In April 2017, Bloomberg revealed that the bag with the mixture Juicero can squeeze with your hands without using expensive equipment. The reporters of the newspaper conducted an experiment and was able to squeeze the juice out of the bag faster than a branded juicer.
The reporter pressed approximately 220 grams for fifteen minutes. Juicer — 226 grams two. “You do need a juice machine for $400?” asks Bloomberg. According to Bloomberg, two investors Juicero was stunned on hearing this.
One of the investors said. Their venture capital firm wouldnt have met Evans, if you would know that its packaging of juice is not required equipment. Four close to the company people whose names are not disclosed, Bloomberg said. In Juicero knew that the packs you can squeeze with your hands, but said nothing about it to investors. In addition, the juicer was more cumbersome than expected by Evans.
Juicero representatives refused to comment on the situation. One of the investors Juicero Doug Chertok himself noticed that the packaging can be squeezed manually. “Of course, the packs can be squeezed without the car”, he said and added that still a big fan of the company.
Chertok says that the approach is valuable Juicero for delivery of organic products. The company will become a “platform” for the new model of delivery of food, when fresh fruit and vegetables regularly delivered directly to your home. Juicero still looking for your approach. I have no doubt that they will be very successful.
According to Bloomberg, Juicero found its niche in the luxury hotels and restaurants. Workers from seven institutions, with a juicer Juicero said that they like the product, because they throw away the used packaging and they do not have to clean. What bags you can squeeze by hand, none of them knew.