Investing in Daily Blends
At Looking Glass Capital, we invest across the themes of health, climate, and empowerment / access. It’s not often that a company straddles all three of these categories, but Daily Blends most definitely does. It’s also not often that we invest in companies with a hardware element, but when a team is as talented, ambitious, and tenacious as sisters Shriya and Purva Gupta, it is important to make exceptions.
And so, I’m excited to share more details about our investment in Daily Blends and the amazing progress that the company has made. As mentioned, Daily Blends aligns with the themes that Looking Glass invests in. The company makes healthy food options accessible at reasonable price points in a way that traditional four-wall restaurants are not able to. This is enabled by Daily Blends’ extensive network of AI and ML-optimized smart refrigerated vending machines. The software layer that the company has built analyzes real-time sales, inventory, and user data from each vending machine, generating multi-level user, location, and network insights, which powers a highly optimized end-to-end supply chain that produces a balance of product availability and minimal food wastage to be environmentally conscious and promote sustainability. The company’s algorithms generate insights on accurate demand forecasts, most optimum assortments, share of shelf, promotions, and product recommendations, fueling high customer retention, while optimizing delivery schedules and minimizing out of stocks to result in the best possible customer experience. Additionally, the data that the company captures enables it to recommend specific machine locations to customers based on the item they are searching for as well as provide meal specific discounts based on its “best by” date.
What makes the company’s solution even more compelling and why I was eager to invest is that although hardware is core to how the business scales, the software layer is simply built on top of third-party machines with increasingly favorable lease terms, making Daily Blends much more asset light than meets the eye and highly scalable. Moreover, the company is more of a decentralized retail distribution platform than a vertically integrated network of vending machines. As Daily Blends has increasingly started to fill its machines with food and beverage items from other brands, the company keeps its costs down, maintains strong margins, and generates incremental revenue opportunities through being able to monetize the data it captures stemming from user preferences. The company’s go-to-market strategy related to machine distribution is centered around partnering with locations that are interested in “hosting” Daily Blends’ machines. Few partners could be more significant for a Toronto-based company than Metrolinx, the largest public transit network in Canada, and Daily Blends recently signed a multi-year contract to deploy its machines at 60 train and bus stations serving over 70 million passengers annually. In addition to transit stations, Daily Blends is deploying these vending machines at universities, hospitals and factories, all places where there is a need for fresh, healthy, affordable food.
In short, from the outset of our investment, Daily Blends has demonstrated an ability to grow its business and evolve its model in an iterative and capital efficient way while partnering with organizations that typically are reluctant to work with small startups. The agreement with Metrolinx is an early source of validation and a clear indication of demand for the company’s product at both the enterprise / distribution channel level as well as the individual consumer level.
