Month: April 2018

While taking some time off to travel before his next gig, Sisun Lee spent a lot of time in Korea — where he found himself drinking alcohol pretty much every night and then getting rolling the next morning, regardless of hangover status.

He also found that there were popular local herbal hangover drinks that everyone kept raving about. So he brought a bunch of them back to the U.S., handed them out to friends, and generally got interested in the drink as a thought experiment. After reaching out to scientists in academia about the herbal drinks and finding no one had really commercialized it into a product in the U.S. — and that there might actually be something behind the idea — he decided to start 82Labs and roll out the Morning Recovery drink. The startup has also raised $8 million in new financing from Altos Ventures, Slow Ventures, Strong Ventures and Thunder Road Capital.

“My friends would go to work the next day and they would swear by these hangover drinks with an herbal base,” Lee said. “In many ways that was almost when I was first inspired by it. That was at the back of my head. It turned out it was a massive market, it wasn’t one major brand — all the CPG companies had their own brand. It’s like the energy drink market. I did some research, and [people in academia] might be really passionate about something, and give you this conviction that this is the next big thing, but they wouldn’t commercialize it. They didn’t know how to get going.”

The drink is based on a flavonoid component of popular herbal medicines called DHM. The original concept for the drink was also based on research on DHM from USC, where Lee had gotten in touch with the scientists working on it to see if the idea was actually worth pursuing. That’s then bottled with other components like vitamins, electrolytes, milk thistle and some others which are known to have some detoxifying components. 82Labs initially launched in August, but at the time was literally handing out white powder in little bags — something Lee wasn’t particularly thrilled about. But as more and more interest came in after handing it out to area friends (and product managers) throughout the course of an unscientific experiment, they decided to roll with it and try to turn it into the kind of market you’d find abroad.

Lee and his friends decided to create a website to start sending it out for free for anyone who was interested in signing up. They made a few hundred bottles, gave it a flavor, and put a sign-up sheet online where they would ship it to you. Naturally, however, this is Silicon Valley, so the site ended up going viral and they got so many requests that they needed to figure out what to do next because larger bottling orders came in the tens of thousands. After some work figuring out how they could actually get it to market abiding by rules and regulations by the FDA, the team ended up making an Indiegogo campaign, which raised more than $250,000

“Because of our margins, every user we onboard is profit we generate,” Lee. “But we’ve had to learn a lot really quickly. The big thing for us last year was a big production mistake and we were always supply constraint every order. Sometimes we had compliance issues, quality issues, or mistakes on timeline. everything has been around putting out fires and making sure customers are happy, or giving them refunds December was the first month we had inventory and started to sell during holiday season when people are drinking a lot. We really never had time to think and go, “holy crap, what are we actually doing, what’s the goal here, what’s the mission here.”

Lee said that while Morning Recovery, which costs $30 for a six-pack of the 3.4-ounce drink, is their first drink they don’t want to just stop there. After all, getting a successful beverage to market — even if it turns out there’s plenty of work to do on the science side — requires getting into retail outlets and into the hands of consumers. But if that’s successful, that could easily build a brand and help the company start thinking about the next product that they should make. That direct-to-consumer approach has been increasingly popular amid the success fo companies like Dollar Shave Club and others.

But that also means that 82Labs will likely face a lot of challenges, especially if it starts to get traction and larger companies start to take notice of it. Since the market is popular internationally — Lee says it’s a few hundred million dollars annually in countries like Korea — it wouldn’t take much for a consumer packaged goods company with beverage experience to try to produce something similar. So the goal will be to build up enough traction before that happens in order to continue growing.

“If big companies take notice, while they can’t make the exact same product as us, I’m sure they can figure something out,”  Lee said. “We have the advantage of a couple months — once we get to at a threshold in revenue companies will probably notice us. We thought we could keep growing slowly, but if any of these pharmaceutical companies or CPG companies do something, we’re gonna be crushed. Or, we thought we would raise money to front-load expansion purely on growth.”

from TechCrunch

As expected since February, Alibaba will buy all outstanding shares of Ele.me that it doesn’t already own. Best-known for food deliveries, Ele.me claims to be China’s biggest online delivery and local services platform. In an announcement, Alibaba said the deal values Ele.me at $9.5 billion. Alibaba, which first invested in Ele.me two years ago, and its affiliate Ant Small and Micro Financial Services Group currently hold about 43% of the company’s outstanding voting shares.

This is the latest in a string of investments and acquisitions by Alibaba to expand its physical retail presence as part of its so-called “new retail” strategy to combine e-commerce and offline retail. The company’s goal is to make it easier for users to move (and spend money) between brick-and-mortar stores and Alibaba businesses like Tmall and Taobao. For example, they may view products at pop-up stores and then order them on their smartphones for almost-immediate home delivery.

Ele.me, which will continue to operate under its own brand, is at its heart a logistics technology company. Founded in 2008, it utilizes its logistics system to provide services like Fengniao, an express courier for local deliveries. After the deal is finalized, Alibaba said that founder and chief executive officer Zhang Zhuhao (also known as Mark Zhang) will become chairman of Ele.me and special advisor to Alibaba Group CEO Daniel Zhang on its new retail strategy. Wang Lei, currently vice president of Alibaba Group, will take over as Ele.me’s CEO.

In a press release, Zhang said “Under the leadership of its founder and management team, Ele.me has achieved leading market share in China’s online food delivery and local services sector. Our shared belief that New Retail will create more value for customers and merchants has brought us together. Looking forward, Ele.me can leverage Alibaba’s infrastructure in commerce and
find new synergies with Alibaba’s diverse businesses to add further momentum to the New Retail initiative.”

Bloomberg reported at the end of February that Alibaba planned to buy the rest of Ele.me’s shares from its other investors, including Baidu.

The deal deepens Alibaba’s competition with Tencent, in particular its own local services and delivery platform, Meituan Dianping, which was formed by a merger in 2015. Alibaba previously owned shares in Meituan Dianping, thanks to its investment in Meituan, but began offloading them soon after the merger with Dianping.

In a statement, Alibaba said Ele.me complements its affiliate Koubei, a platform that gives restaurants and stores a way to go online and reach more local customers.

“By combining Ele.me’s online home delivery services with Koubei’s consumer acquisition and engagement capability for a range of restaurants and service establishments, Alibaba will be able to offer an integrated experiences to customers both online and offline,” said the company.

from TechCrunch