California-based single-serve coffee product maker Steeped Coffee has raised $5 million through the equity crowdfunding platform Republic.
In a campaign that lasted less than 48 hours, Steeped reached the $5 million limit for regulation crowdfunding, a.k.a. Reg CF, as established by the United States Securities and Exchange Commission. More than 4,500 accredited and non-accredited investors contributed to the campaign.
Following the campaign, Steeped launched an additional Regulation D fundraising campaign, for accredited investors only, also through Republic.
(Editor’s note: At the time of this writing, links to republic.com were removed due to technical issues with the republic.com website.)
A certified B Corp based in Santa Cruz, California, Steeped Coffee was part of a small wave of startups to launch about five years ago offering manual single-serve and/or tea-bag-like steeping solutions for coffee.
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These were often presented as quality-focused, specialty-coffee-market alternatives to existing products in the single-serve, single-use market — namely, machine-focused capsule and pod solutions from the likes of Keurig (now Keurig Dr Pepper) and Nespresso — that were experiencing rapid annual sales growth.
In 2019, Steeped won the Best New Product award from the Specialty Coffee Association for its core product, which involves finely ground coffee in fine mesh bags without solubles or freeze-drying processes associated with “instant” coffee. Users simply add hot water for hot coffee, or cold water for cold brew.
While maintaining direct-to-consumer sales, Steeped’s growth has been led by the business-to-business (B2B) market, where the company’s packaged coffee solution is available to coffee roasters and private-label clients.
Today, the company boasts a roster of more than 400 licensed roaster clients, including names such as Red Bay Coffee, Counter Culture Coffee, Andytown Coffee Roasters, Anodyne Coffee, Barista Parlor, Tinker Coffee, and many more.
A central component of Steeped’s pitch to investors and consumers alike is sustainability through the use of home-compostable or commercially compostable materials, plant-based and renewable materials, and “ethically sourced beans,” despite the inherent sustainability questions surrounding any single-use products.
“We strive to find new solutions to old problems, to be a light on a hill, to honor and value every relationship, and to set new standards of doing business without compromise,” Steeped Founder Josh Wilbur said in an announcement of the $5 million crowdfunding round. “At Steeped Coffee, we pay attention to every detail to bring people the most convenient, high-quality, ethically sourced, and sustainably packaged products available. Our entire company ethos is focused on how we can be good stewards of the planet and to love people.”
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Nick Brown is the editor of Daily Coffee News by Roast Magazine.