#164 Sundae: LTK for Groceries

Anastasia: My name is Anastasia and I am from Finland. I would describe myself as a hustler when I set myself a goal, I can move mountains, but it will be done 

I’m Josh Muccio and this is The Pitch. Where startup founders raise millions and listeners can invest. Today on the show, Anastasia Trofimova pitches the LTK for groceries. All those food videos on Instagram? You can finally shop them. Anastasia dropped everything in Sweden to move to Silicon Valley to start this company. But the question is… why her?

Anastasia: Why not me? I know this industry. I have firsthand experienced some of the challenges when it comes to food and health. I think building is the most exciting part of life. I mean, that is what life is about to me 

The Pitch for Sundae is coming up, after this. And whether you’re watching or listening on YouTube, Patreon or your favorite podcast player, thanks so much for subscribing and don’t forget to turn on notifications.

[break]

Welcome back to The Pitch for Sundae. Previously known as Your Beet, at the time of the pitch. Let’s meet the investors

Elizabeth Yin with Hustle Fund

 you're an A plus founder.

Charles Hudson with Precursor Ventures

I feel like I’m the lone dissenter

Ben Zises with SuperAngel

I’m not seeing anything else super revolutionary here

and Kate McAndrew with Baukunst

For those who can’t see, my jaw is currently on the floor

Charles: Fifteen minutes in. Thank you very much. 

[hellos]

Ben: Hi, nice to meet you. 

Anastasia: Anastasia. 

Ben: Great to meet you. 

Anastasia: Nice to meet you. 

Kate: Hey, I'm Kate. 

Anastasia: Nice to meet you. 

Elizabeth: Elizabeth. Nice to meet you. 

Charles: Hey, Charles. 

Anastasia: Nice to meet you, Charles. 

Charles: Nice to meet you. 

Anastasia: Well, I hope you all had lunch because I'm going to talk about food.

Elizabeth: Okay. 

Anastasia: My name is Anastasia, and together with my stellar team, we are revolutionizing grocery shopping as we know it. Our food system is broken. It accounts for 30 percent of global greenhouse emissions, and 90 percent of US population has a vitamin or mineral deficiency. But how do you fix one of the largest and most traditional industries in the world, grocery retail? Well, we figured out that 80 percent of modern consumers start their grocery shopping journey by opening social media to look for inspiration of what to cook for dinner from their favorite food creators. In fact, almost a third of all Instagram content is food and recipe content. We can connect this recipe content on social media and make it instantly shoppable at local grocery retailers. With Your Beet, next time you open, let's say Instagram and find a recipe you love, you click it and we will direct you to let's say Instacart or Whole Foods and pre fill their online e-basket with all of the ingredients in just a few seconds. This way, we also get to seamlessly pre fill the consumer carts with more healthy and sustainable food options. And the cool part is that by creating this digital layer between consumers and grocery retailers, we are collecting a lot of data. In fact, we're building the largest clean data set in a $10 trillion grocery retail market. We are the only platform that can track and improve ROI on millions, if not billions of dollars that CPG brands spend on digital marketing every year. We are live in Sweden, and we have already early revenues. Together with my experience having advised CEOs of some of the largest grocery retailers while at BCG, I joined forces with my CTO Kaku, who led startup tech teams from Seed to Series B. We are raising $1.5 million. Half a million is already secured. And we are looking for a US-based lead because US is our main market. Now we invite you to join our mission to revolutionize how millions of people worldwide shop food.

Elizabeth: Great, thank you. 

Ben: Great pitch. 

Anastasia: Thank you. 

Elizabeth: So how does this work? Like you have to have the app but then when I'm on Instagram, your app sort of in the background allows me to click something within Instagram. Like I'm just trying to understand the user experience.

Anastasia: Yeah. I actually would love to show you if you would like to see it. So we can actually do both, is the short answer to your question via the web and we have also the app. I mean, there are many companies, let's say, LTK or Like To Know. They're worth over $2 billion right now, and we see that their success is really driven by the app. So we thought, why fix something that's not broken? But essentially how it would work. All of the food influencers that we work with, they would have a link in their bio.

Elizabeth: Oh, I see what you're saying. Okay, so you need the food influencers to partner with you?

Anastasia: So both. So the influencers are promoted. That's how we actually user generating, is completely organically. So they are happy to put the link in the bio. And once you click that link, will direct you through the app, where you can see all of their recipes already kind of mirrored or replicated using AI, so it's zero effort for them. And then you basically get to choose several recipe as a user, as a consumer, because that's how you shop, or at least the users that we're targeting, which is families. So you click shop with this retailer that we integrate, and we'll pre fill their carts with all of the ingredients for multiple recipes. That's the advantage of using the app. 

Kate: But you don't need to get the person to download the Your Beet app? It just works through link in bio.

Anastasia: We can do both. So, so we are incentivizing the users to download the app. 

Kate: Okay. 

Anastasia: Because that's the way we're collecting a lot of data. But also it is a more user friendly experience. It allows you to plan for several recipes, it allows you to see nutritional profile, it allows you to save it, like let's say in your favorite collections, it allows you to share it with your partner or with your kids so that it's a whole family experience and everyone gets to pitch in and plan. And then you, once you've done planning, you can click in with one click, you shop the entire week's worth of groceries. 

Ben: I just want to come out and say, yeah, really impressive. But just transparently, I'm invested in a competitive company and so for that reason I'm going to be out. 

Anastasia: Can I double click? What is the competitor? It's - 

Ben: Grocer's List. 

Anastasia: Yes. So their business model is a little bit different from ours. So we're not competing directly, but we're playing in the same kind of field. Food creators.

Ben: Yep. It's a huge space. But certainly, you know, close enough for me. It wouldn't be right to either of you to be stretched between both. 

Kate: Well, I’m super curious to learn more. I grew up in a grocery house. My mom like worked her way up the ladder at Safeway. And so every night over dinner, we would talk about grocery shopping.

Ben: What's more fun - what's more fun than that? Come on.

Kate: And every dinner party, people would be like complaining to my mom, oh, at the Safeway parking lot, you know, the da da da. My mom's like, I'm not in charge of the parking lot. Anyway, I've always been fascinated by grocery and we have a number of investments in the food space. I would really love to just really dive into the monetization and hear more about that. 

Anastasia: So we actually monetize in three ways today. We monetize with the commission to retailer. So we are much more efficient way for them to acquire users. So we're, we're saving them cost. But we also, because we're able to prefill the basket with more profitable item, we're actually increasing the bottom line as well. And they're paying us a cut. So the second stream is actually - because we are pre filling the basket, we actually can pre fill it with our partner brands, right? So then we also charge or take a cut from the brands, right? Now, how it breaks down, just to give you an idea of the numbers, I would put it like this: that for every basket that gets shopped, we make between 10 to $20. Right. On average. So. 

Kate: My jaw - for those who can't see, my jaw is currently on the floor. 

Anastasia: Yeah, And then there is a third revenue stream, which is the subscription model that we monetize or charge CPG brands. Today they have no idea, absolutely zero clue what is actually generating them sales. But with our platform, we can, because we're connecting the influencer world with the world of point of sale, which is the retailers. To put it in perspective, how big this industry is, if you take just one brand, let's say Nestle, they're spending over, just in the US and just on digital marketing, over a billion dollars every year. It's like they're throwing that money in there, closing their eyes and hoping something will convert to sales. 

Elizabeth: And you are already selling that data, or what - what is sort of the minimum amount of data you need to be interesting?

Anastasia: Yeah, We did a pilot with a, with a Swedish brand. They were paying us $4000 a month and in the end of the pilot, we increased their conversion rates by 22 times. So they were happy to pay us double. And that was a small brand. For majority of brands, they actually go through agencies to commission influencers and then pay 30 percent to the agency. We can so streamline this, right? So they were already working with this influencer and said, Hey guys, let us actually connect the dots to the sales channel. And then we can show you which influencer is actually performing how, right? And then you can put your money into the influencers that are performing. So that's the data that we ran with them. 

Elizabeth: So when you ran this pilot with them, you basically gave out your link to all the influencers they were working with.

Anastasia: Yes. Correct. 

Elizabeth: And then that helped them see, Oh, this influencer was great. That one was not so great or whatever. 

Anastasia: Correct. Correct. 

Kate: I'm curious about prior companies and or competitors. Like I think - it's amazing to me that grocery shopping is something that happens again, again and again. And like list management and inventory management continues to be, I don't know, like harder than rocket science, apparently. Like we're on the moon, but we can't figure out how to run a grocery list. It's mind blowing. 

Anastasia: Yes. 

Kate: And I feel like many have tried and still I have like a pad of paper on my refrigerator. So I would love to hear like what you think some of the predecessor companies did well? What did they fail at? Why hasn't there been one to rule them all? Like, and who are you coming up against? There's more of the -

Anastasia: I would love to deep dive on this because obviously, I mean, that's the world I come from, is the grocery retail world. But I would summarize into three things. Right. It's quite complex to plug in to retailer. It's quite complex to create the right matching. And the timing wasn't there before. Like now is really boomed after the pandemic.

Kate: Because of delivery.

Anastasia: Yes. So I can tell you that in 2019, just in the US, online grocery shopping was two or three percent of the total market. Now it's almost 20 percent and it's growing. 

Kate: Yeah. 

Anastasia: It's growing fast. So the pandemic has really enabled online to become mass market. And the same with the social commerce. I think it grew 3x in the last three years. And it's going to 14x in the next five years. The timing is now. So there have been some companies before that have attempted this, but the market wasn't there. Online grocery shopping wasn't there, right? Social commerce was not as booming as it is today. 

Elizabeth: It sounds like you've had some good success in Sweden, and especially per your background and connections. When you come to the US, how are you thinking about approaching brands, retailers, etc? Do you have a strong network here? 

Anastasia: Yeah. So just for record, I actually did most of my career in Australia. 

Elizabeth: Oh okay. 

Anastasia: So I had zero connections when, when I came to Sweden because of the pandemic. So I moved because of that. And then managed to start a startup not knowing anyone, close that first angel round, and close some of the large retailers. 

Elizabeth: So mostly cold - 

Kate: Just going to snap for you for a second.

Elizabeth: Yeah, that's impressive.

Kate: That's amazing.

Anastasia: So we are hoping to replicate the same success in the US, but we are much better geared, I have to say. It's actually easier for us to approach influencers in the US because they all understand this model. This model of social commerce exists in fashion and is so mass market that everyone immediately understands how it works, how it benefits to them. 

Elizabeth: They're waiting for it. 

Anastasia: Yes. And the amount of times I can tell you that the influencer said, you have no idea how long I've waited for this on the calls. And we are not charging them. That's the beauty, right? We're not charging the influencer and we're not charging the followers. So it's a win win. An average household spends $15,000 a year on food. We were creating a cut from that money, from the retailer back to the influencer, right? So it's really a win, win, win, win, flywheel effect. 

Charles: Will the model be the same in the US? 

Anastasia: Very much similar. Yes. I mean, we already secured two local partners, which will be more than enough for a go to market. But we're really gunning for that retail CPG B2B space. And just to put things in perspective, so we project that we actually need about 4000 monthly shops to generate one million in ARR. 4000 is nothing. I mean, we already have this incredible food influencer with over 2 million followers and now she's connecting us to her friends and bringing them on board. So we plan to have over 10 million combined follower base by the end of February. I mean even if we convert - let's be super conservative. I mean, an average good conversion is 2 percent. Let's say we convert 0.5 percent, right? That's already, out of 10 million followers, that's already 50k followers that will, let's say, download our app. We only need 4000 to make 1 million in ARR. 

Kate: The scale of grocery is so crazy that I have no doubt - Like, I have no doubt that about getting the shops. I, I am really interested about the friction of getting onboarded. Like if you can get Safeway and Safeway has a national footprint and they're on Instacart, you're golden. But selling into Safeway, integrating with Safeway. I'd love to better understand, how many grocery stores do you actually need? Like, is one biggie enough? 

Anastasia: Yes. So we are very lucky that one of our partners that we integrate is a national, so it's a national-wide retailer that operates US and Canada. So what I'm trying to say is that it's more than enough for us to hit really high revenue numbers. 

Kate: So you have that retailer? 

Anastasia: We have that retailer. 

Kate: Are you integrated with them yet? 

Anastasia: We're integrated and we are receiving the commission from them. So it's not an if. It's not a when, it's happening. 

Elizabeth: So you're saying that, let's say, one of your influencers launches something, and let's say that people are like, oh yeah, I want that recipe. There is a grocery retailer you're already integrated with who could plausibly serve that order. 

Anastasia: Correct. So you can go and try it for yourself. You can try the recipe, you can shop it. And we will get a cut from that when you shop.

Kate: This is wildly exciting! I feel. 

Elizabeth: So let me, well, okay, so let's, let's rewind the clock. 

Back to Sweden, after this.

Anastasia: So you can go and try it for yourself. You can try the recipe, you can shop it. And we will get a cut from that when you shop. 

Kate: This is wildly exciting! I feel. 

Elizabeth: So let me, well, okay, so let's, let's rewind the clock. Tell us about in, you know, you've been doing this in Sweden. How much revenue have you done in Sweden? 

Anastasia: Yeah, so we have done 25k in GMV and about 10k in brand revenue In just a few months. I mean it's fantastic or exceptional, I mean, Swedish market is so far behind the US market. Only 2 percent of population shop their food online compared to almost 20 in the US. And it's not even available everywhere in the country. But I'm so happy that we didn't get lured into growing Sweden further because we got that retail partner here in the US, and we pivoted to the US. 

Kate: Will you move here? 

Anastasia: I already have. Three months ago, I moved to San - I sold everything I have and I moved to San Francisco. Yeah, so I'm already local. 

Kate: Amazing. 

Charles: How often do people take the order? I'd imagine you get to the cart and you have to decide, I want to order this or, Oh, I already have these ingredients at home. Or I have half of that. Like, I'm just curious, like, how should we think about the, that conversion? 

Anastasia: So we see that from people who could shop in Sweden, about 10 percent actually checkout, which is quite high. Because we start to learn what you like, what you have at home. So we can also see every time you order our recipes, we can actually see if you cooked it or not. Because we see if you spend time on the recipe or not. So we can see that, okay, you, you bought this bag of rice, but you haven't used it. So we can prompt you in a smart way. Okay. You've, you've still have the rice left. Would you like to cook this recipe with it instead? Right. So we're also tackling sustainability in food by reducing waste. And the other exciting part we are finally, finally able to actually introduce a concept of dynamic pricing in grocery retail, which doesn't exist today. Grocery retailers, they, they waste about 30 percent of all their produce. Just goes to the bins, right? So, but what we can do is to say, okay, Hey guys, you have a, too much supply of, let's say pumpkins. We can reduce the price dynamically and nudge users through a pumpkin based recipes to generate more demand, right? 

Kate: Can you say more about the financing history? you're raising, I think I heard, 1.5 and there's 500k committed, so there's a million open? 

Anastasia: Yes, yes, yes, exactly. So there's 1 million open, and we're really looking for a US-based lead because all the future rounds are going to be US based. That's how we see it. We can actually close it already in Europe, but we really want a US-based lead. 

Elizabeth: Have terms been set on this round? 

Anastasia: Uh, yes. But of course, we have to discuss with the US-based lead. We are looking at a $10 million valuation. 

Kate: Well, I'm very interested. We typically lead rounds like this with somewhere between 750k and 1.5 million. That’s really in the sweet spot for us. 

Anastasia: Fantastic. 

Kate: I work in a partnership, so I have three partners. But I would be very excited to jump into diligence and my investment would be - I would say at least a million. I would rather do 1.25 if you'd be open to taking more. I'd even go 1.5, um, if you'd be willing to go up to two. For us, we go all in at pre seed. Right. So I'm excited to do due diligence. 

Anastasia: Sounds great. 

Kate: My grocery mom would be very happy. 

Anastasia: Fantastic. Sounds like a good match. 

Charles: I have one other question for you just, at scale, how do you think about the balance between the sort of commissions and the brand deal from - like what does that look like at scale?

Anastasia: Yes. So I think actually, majority, I would say two thirds, so quite aggressive, of revenue will come from the CPG brand space. 

Elizabeth: Yeah. That's my hypothesis. 

Kate: Agree. 

Anastasia: Yes. But the cool part is that it's so scalable. I mean, you can automate it with a dashboard, basically give them access to that dashboard. It's $2 trillion globally is what they spend on marketing, completely in the blind with no traceability. So of course there's so much low hanging fruits that we can go for. 

Elizabeth: So I really love your hustle. I think it's amazing you've been able to get these partnerships cold. And you're very clear, you're very dynamic, you know your stuff, et cetera. I think the sort of two things that I'm trying to work through in my head is, one, like, there's a lot of components that need to come together to make this work. Ultimately, your money is with the CPG brands, but they're not going to buy until you have data. So, to get the data, you need the influencers, and in order for the influencers to make money, you need the retail partners. So, it's like, they're all very interconnected, and I can see why you have to build all these things. But, it is a lot just to get to the core of the business. So there's a lot that can go wrong. And the funnel also drop off, like just because someone has 2 million influencers, we all know it's not like 2 million people are looking at every single thing, right? So, so there is drop off at sort of every step of the way. That being said, that doesn't scare me, but I think what this factors into is the valuation. And I, I unfortunately can't get behind the 10. But I would put out my offer at 150 at 7 post on a SAFE. 

Anastasia: Thank you so much Elizabeth. I mean, I would love to deep dive more on that, because, of course, that's one of the things that is both the beauty and the challenge of what we're building, right? This end to end complexity. But we do have a really strong plan around how we prioritize. I mean, that is basically my background. Management consulting is how do you prioritize and identify where, you know, the bulk of what you need comes from, right? So what to focus on? But let's take it offline. Let's deep dive in it, and uh, see what we can come up with.

Elizabeth: Yeah.

Anastasia: Sounds good. 

Charles: So I'm in for 25. But one big diligence -

Ben: Let's go!

Charles: We sold, we sold a company to Instacart -

Anastasia: Right.

Charles: - a while ago and I have a bunch of friends who are executives of the company. And I do want to better understand this model from their point of view. That would be the one big diligence item, but I would be in for 25k at a minimum, but the potential to do slightly more. 

Anastasia: Sounds fantastic. I mean, thank you so much.

Kate: I mean, one conflicted. And three people excited. That's a pretty great score. 

Anastasia: That's fantastic. I really appreciate it. 

Ben: Really well done. 

[applause] 

Josh: And Anastasia just so all the cards are on the table. The Pitch Fund would also like to follow on in this deal, alongside either Elizabeth or Charles or Kate, depending on where the terms land. 

Anastasia: This is fantastic. Thank you so much. I'm so happy for this warm reception. I mean, we just moved to the US. We're starting to launch. So -

Kate: Good start girl!

Anastasia: This could not be better. Thank you so much. I really appreciate it.

[applause]

Anastasia: Amazing. Well, have a great rest of the day. Don't get too hungry. 

Kate: I'm glad it wasn't a beet chip company. 

Elizabeth: Yeah. Yeah, it's not a beet chip company. 

Josh: Are you like, leaning more favorably into beets now that you heard that pitch? 

Elizabeth: No. 

Charles: Same

Kate: I'm pro beet. Always was.

Josh: Oh gosh. What'd you guys think of that founder?

Kate: She's fabulous. 

Elizabeth: Yeah. 

Kate: I mean, I thought she was incredibly articulate. she made something that's very complex sound simple, right? She just has, uh, kind of a gravitas to her that really landed for me. And I'm always dubious about management consultants. You know, that's like, I, I definitely have an anti-management consultant stance, and she won me over anyway, which is impressive. And we have another company in the grocery space in our portfolio. The scale of grocery is insane. And the scale of companies that monetize doing things in grocery, couponing companies with billions of dollars in revenue who are just putting a coupon in someone's hand when they leave the store. Like, there's so much money to be made in and around this space. 

Josh: Handing out coupons? 

Kate: Yes. Absolutely. But it's actually, it's an advertising play because you put Skinny Cow in front of this person who bought this thing, you know, at the register. 

Josh: Okay. 

Kate: There's so much money to be made in that space because of the, the scale.

Josh: Why do you think no one's built this? It feels like an obvious opportunity -

Elizabeth: I think she's right about timing. 

Kate: She has the why now. 

Elizabeth: But this, I mean, I think to your point about management consultants, in general I prefer operators. But I would say this is entirely a partnerships and sales game. And at the higher levels of management consulting, it's all sales, right? And so, she seems to knock that out of the park. And that's what we're looking for, just like do partners and sales on steroids and we're good. 

Kate: If you can control what's in someone's grocery cart. Yeah. Like.

Elizabeth: You cannot eat this today.

Ben: Yeah. It's a goldmine. 

Kate: Yeah, it's wild. 

Josh: You've hit your limit on sugar for the week. 

Elizabeth: Yeah. 

Kate: Yeah. I'm gonna hire your sourcing team. Dang. They've found some interesting people I hadn't met yet. 

Josh: Peter. Yeah. Peter and John and Lisa. 

Kate: Amazing. Peter, John and John Lisa. 

Josh: All right, let's reset the room.

Anastasia walked out of the pitch room with THREE offers. Kate could lead the round and invest between 1 and 2 million, Elizabeth offered $150,000, but only at a $7 million valuation cap, and then Charles committed 25k. Classic Charles. 

Anastasia has a cart full of deals, but will they sour in diligence? That’s coming up.

BREAK

Welcome back. After the show, Anastasia immediately went into diligence with Baukunst.

Like you heard in the Jungle episode, Kate likes to move fast. So they met up right away and Kate and Axel fired off some questions. 

Kate: Does that include the affiliate spend? 

Axel: Can you monetize me if I don't use Instacart? 

Kate: I would love to maybe dive into the Sweden example. 

Axel: The percentage of online shopping in Sweden is not that low. 

Kate: If you had to flash forward five years from now or seven years from now, like where do you think the majority of the monetization will be coming from? 

Axel: So 250 users per influencer. What's the definition of a user? 

Kate: So remind me. I think I wanted you to raise 1.5? 2?

Anastasia: Yes.

Kate: Well, we're excited, right? Like we've like cleared the calendars and we want to get to a yes or a no by the end of next week.

It actually only took the weekend.

On Monday, Anastasia got an email from Kate saying “We dug out compelling competitors in this space, and based on diligence calls made over the weekend, we don't feel like we can make a high conviction pre-seed bet here.”

That’s kind of how Kate’s fund works. Baukunst doesn’t really do small checks. They’re either leading your entire round and investing millions, or they’re out.

Meanwhile, Anastasia still had an offer from Elizabeth Yin. After Elizabeth got sick on her trip to Miami, sorry about that, they connected a week later.

Elizabeth: Hey, Anastasia. 

Anastasia: Hello, hello. How are you, Elizabeth? Are you feeling better? 

Elizabeth: Getting there. Thank you.

Anastasia: Oh, sorry to hear. 

Elizabeth: So, so pardon me, my, my brain is a little bit foggy. So I don't really remember too much about what happened last week, but I did take a bunch of notes. 

Anastasia: Okay. 

Elizabeth: What I wanted to get a clearer understanding though is, I made you an offer. I know that there are probably other looming offers out there. We are fairly valuation sensitive, and I think frankly speaking, just kind of per where you are, like, this is fairly early, and so you obviously can take your time in thinking about it. 

Anastasia: Yeah, what is your offer? Or, yeah, could you just recap that one so we have clarity on that? 

Elizabeth: Yeah, so like I said, I actually am kind of fuzzy myself. Lisa, do you know? 

Lisa: I have 150 at a 7M post is what is in the notes.

Elizabeth: Yeah, that's what I seem to recall. 

Anastasia: Um, but Elizabeth, is that kind of the, your final offer? Because 7 million is a little bit lower, uh, valuation than, um, than what we will probably close this round at. Um, so is there some room to make it a little bit closer to, to 10 million? Or is it, is this your kind of final offer?

Elizabeth: Yeah, that is our final offer. I think, you know, unfortunately just kind of where we play in the sphere. I think valuation is really important to us. We write small checks, so we have to kind of make it count, you know, as an investor. I understand that there are probably a lot of other investors looming with much larger funds who can write you bigger checks at a higher valuation. But that is where we are. 

Anastasia: Right. Understood. Let me take this to my team. Think about it. Calculate things. But really appreciate the speed of the process at HustleFund. Sure. This is the fastest decision making I've ever seen. So really appreciate it Elizabeth. 

Elizabeth: Yeah, yeah. No, thank you.

After taking some time to think it over, Anastasia asked Elizabeth if she could at least come up to an $8 million post. But Elizabeth held firm at 7.

Anastasia decided not to accept Elizabeth’s terms. Which left her with one lone investor, the lone dissenter, Charles Hudson.

Charles: Hello!

Anastasia: Hi Charles, how are you today? 

Charles: I'm good. Ooh, I haven't seen this fancy new background you guys have. Wow. 

Lisa: Yes, we're so professional now, look at this.

Anastasia: Yes, uh, it's not, it's not your Google Meets, let's say the least. 

Charles: [laughs] Well, tell me a little bit more just about, do you think you encounter, um, a different set of competitors here in the U.S.? 

Anastasia: Yes, like, uh, delivery kits, right? The meal kits. 

Charles: Yeah. 

Anastasia: Your Hungry Roots, your HelloFresh, Blue Apron, all of those things, but it's such a different, um, category because it's still quite an expensive product.

Charles: Yeah.

Anastasia: Cool thing of what we're doing is democratizing healthy eating, creator led eating, because we are plugging in to any retailer, you know, if your budget is Whole Foods, great.

If your budget is Walmart, you can still do this, right? So it caters to a more mass market. And of course, the fact that our profit margins are extremely much better than a delivery kit like HelloFresh. We have a much greater chance of succeeding. There are competitors now popping like grocers lists, right? They're charging influencers. So the whole model is around charging influencers, uh, to make it easier for them to promote their recipes and things via email subscription. So what we see is that there are players popping up, but there is no direct competitor that we have seen that have the same business model. 

Charles: Okay. How should I think about, like, after this round, like, future financing needs for the business? 

Anastasia: I mean, we are going through this year. We are going VC route because we want to build at the next, you know, L. T. K. But in a bigger market, which is food, so but also looking at L. T. K. example. It's quite interesting. So they closed. The first round was 5 million. The next round was, I believe, 30 million. And the round after that was 300 million. 

Charles: Yeah,

Anastasia: So they've only done three rounds. [laughs] 

Charles: Nice Okay, what can investors do to help you at this stage 

Anastasia: Yeah, I think I mean, absolutely help me connect and establish in the market. I'm so new. Like I said, I moved here like three months ago. And with that said, I mean, I actually would love to explore the idea of you leading this round. 

Charles: Okay. 

Anastasia: Because you have one of the most extensive early stage portfolios that I've seen, and you're definitely not scared of any consumer elements, also judging from your portfolio.

Charles: Cool.

Anastasia: Convinced? 

Charles: Yeah. I mean, look, I'd love to take a look and dig deeper and see if it makes sense for us to lead. And then I can spend some time on that and come back to you. 

Anastasia: That'd be fantastic, Charles. I would love that.

After that call… Crickets. Anastasia followed up over email twice, but got no response from Charles.

I’m not going to lie, this one is very disappointing. Not just because it didn’t work out, but because we invest a lot of time in helping these founders fundraise more effectively. So when our founders fail, it kind of feels like we fail.

But then again, you can’t make an investment happen. No matter how much it feels like it should work out. Sometimes it just doesn’t come together.

And the founder is left wondering, where did I go wrong? What’s the takeaway here? 

I mean Anastasia could have taken Elizabeth’s money at a $7M post. Landing her first US VC would have given her crucial momentum in her round. But she didn’t.

So where does Anastasia go from here? Keep pitching US VC’s and hope her luck will turn? Go back to her European investors and ask them to fund her expansion to the US? … We’ll ask her. In the season finale. 

RSVP to watch the season finale as it’s streamed LIVE on YouTube next week at pitch.show/party 

No offer to invest in Sundae is being made to the listening audience on today’s show. But you can join our private newsletter for LPs. Where you’ll get access to the deals we’re doing behind the scenes.

So, if you’re an accredited investor, you can apply to join at thepitch.fund.

This episode was made by me, Josh Muccio, Lisa Muccio, Anna Ladd, Enoch Kim, and Jackie Papanier. With deal sourcing by Peter Liu, John Alvarez, and Phoebe Sun.

Music in this episode is by The Muse Maker, Breakmaster Cylinder, Baleen, The Pushers, Imagined Nostalgia, The Brow, Ray Catcher, and Pastek.

The Pitch is made in partnership with the Vox Media Podcast Network.