Editor’s note: Last month Atomo! announced its $9 million Seed round with Horizons Ventures, S2G Ventures, AgFunder, and Bessemer investing. As an encore, Rob Leclerc and Yanniv Dorone — who led AgFunder’s investment into Atomo! — have written this article to provide a more personal view on the deal.
If you’ve followed some of our other investments, you’ll know we love to find ideas that initially sound terrible. Paradoxically, these can turn out to be the best ones. If something’s obvious or intuitive, somebody somewhere is already working on it. So when our team came across a startup called Atomo! — a company making molecular coffee without coffee beans — our initial reaction was, “What’s wrong with conventional coffee?” Turns out, a lot.
Based in Seattle, where Starbucks invented the $4 cup of coffee, Atomo! was founded by Jarret Stopforth and Andy Kleitsch, and was brought to our attention by one of our limited partners (thanks Ron S.!). Jarret’s a card-carrying food scientist with a PhD from California State University, over 50 publications, and more than two decades of experience in consumer packaged goods leading teams at companies like Chobani, Campbell’s, Soylent, and Kettle & Fire. His co-founder and CEO, Andy Kleitsch, is a former Amazon product manager and serial entrepreneur who also founded the first online bridal registry, WeddingChannel.com — where he served as president — which was later acquired by The Knot.
A couple of years ago Jarret read an article from CNN about how climate change, deforestation, drought, and plant disease were putting the future of coffee at risk. And so down the rabbit hole he went, learning about coffee’s broken supply chain.
That supply chain is both enormous, and enormously unsustainable. Coffee is an $83 billion market, and each day, Americans drink 400 million cups of the stuff. However, since coffee plants are so sensitive to drought, as much as 80% yield will be lost during dry years without proper irrigation. Additionally, since coffee plants are largely native to shaded and cooler areas, climate change is set to have a devastating impact on productivity. In response, farmers are moving their crops uphill, resulting in an alarming rate of deforestation – over 100,000 hectares per year. Starbucks CEO Howard Schultz has warned: “Make no mistake. Climate change is going to play a bigger role in affecting the quality and integrity of coffee.”
As a food scientist, Jarret thought that maybe there was a way to reinvent a more sustainable coffee for the 21st century. And unlike most of us, he happens to have a DIY food science lab in his garage. While some people build cars on their evenings and weekends, Jarret builds food.
As Jarret dug into coffee science, he discovered that coffee’s chemical fingerprint is largely defined by 28 compounds, with different coffee species (for example, arabica or robusta) having variations of the same pattern. He reasoned that if he could recreate this chemical fingerprint from a variety of sustainably sourced ingredients — like upcycled seeds, nuts, and husks — and a little bit of food science, then maybe he’d get something that resembled coffee. After showing Andy an early prototype (which they say was horrible, although sufficiently on target) Atomo! was born.
Coffee’s a religion
VCs often ask themselves if a startup is creating a vitamin or a pain killer. Everyone forgets to take their vitamins, but no one forgets to take their aspirin when they have a headache. But coffee’s in a different category altogether. It’s a narcotic, a ceremony, and a religion all wrapped up into one. Unless you’re Matt Damon in Good Will Hunting, you don’t ask someone to meet up to eat a bunch of caramels; you ask them to meet for coffee.
When we first tried one of Atomo!’s prototypes back in February, it was close to bean-based coffee, but it was admittedly missing a few notes. Still, in a blind taste test, seven out of 10 people already preferred Atomo! over Starbucks’ ‘smooth and blanched’ Pike Roast blend. And so when Atomo! shipped us the latest version of their Cold Brew Classic a few weeks ago, we were only expecting a marginal improvement. It blew away all our expectations. Not only did it taste just like coffee, but it was the best cold brew we’ve ever had!
Which leads us to the next question: if Atomo! can recreate coffee, could they make it even better and healthier? Many people don’t like coffee’s bitterness, but with commercial bean-based coffee — which is heavily roasted to achieve flavor consistency — you have limited control over the end taste. To compensate, many people load their coffee with sugar and creamers. By starting from the ground up (pun intended), Atomo! sidesteps this problem because they can precisely dial up or down the bitterness, or any other other flavor compound, to create the world’s most consistent cup of coffee.
We’re excited to be working together again with our friends Chuck Templeton at S2G (co-investors in Sentera, Trace Genomics, Brightseed, and IGS), Tony at Horizons (co-investors in Brightseed), Tess Hatch and Lindsey Li at Bessemer (co-investors in Blacksheep) as well as Atomo’s two exceptional founders, Andy and Jarret on Atomo!’s journey to reinvent coffee.