First Democracy VC
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Minimum Investment: $100
First Democracy VC
Time to Invest
Signed contract with SAVOR, to install a 4-screen machine with a beer wall at Jacksonville Veterans Memorial Arena in Jacksonville, Florida
Designed to mix and pour a cocktail in as little as 3 seconds
Can be customized with up to 18 cocktail ingredients with the ability to create thousands of possible drink combinations
Designed to pour drinks in precise quantities to reduce shrinkage
Security Type: Preferred Units
Round Size: Min: $25,000 Max: $107,000
Price per Unit: $5.00
Pre-Money Valuation: $5,012,500
Liquidation Preference: 1x
Conversion Provisions: Convertible into one unit of Common (subject to proportional adjustments for unit splits) at any time at the option of the holder.
Founded in 2014, TendedBar is developing an automated bartending machine designed for high-volume venues and service bar applications. TendedBar aims to solve common problems within the bar and restaurant industry, such as long wait times and shrinkage. Machines can be tailored to work both as a back-of-the-house unit and as an autonomous customer-facing unit.
On average, bars lose around 20% of their alcohol inventory due to shrinkage (inventory that is wasted due to spills, giveaways, over-pouring, and theft).i This can have a significant impact on finances, with the average bar estimated to lose around 25% of their bottom line because of these issues.ii Large venues are also plagued with problems facing alcohol sales. A 2016 survey conducted by Oracle and Turnkey Intelligence showed that 45% of consumers have abandoned concession lines because the wait was too long. In addition, 43% of consumers claim they are likely to spend more money when wait times are cut in half.iii
TendedBar machines are capable of dispensing multiple alcoholic beverages simultaneously in precise quantities to prevent over-pouring. The system can measure inventory quantities based on weight and send alerts to supervisors if the amount logged does not match the weight of the liquid. This is an important feature when 75% of all inventory shrinkage is estimated to be the result of theft—mostly from employees—according to the National Restaurant Association.iv
A TendedBar machine can produce more than 1,000 possible drink combinations including various cocktails, beers, and wine. It is also designed to pour drinks in as little as 3 seconds. Units can hold up to 5 gallons of each liquor, 5 gallons of each mixer, 15.5 gallons of each beer, and 5 gallons of each wine. A touch screen is built into the unit, allowing customers and bartenders to view a variety of drinks and customize their selection. Users can scroll through and select from a list of alcohol options and mixers on the touch screen to create their own unique drink. The machine then aims to pour the beverage into the users’ cup with a near-exact amount of alcohol each time.
When used as a back-of-the-house unit, bartenders/servers can utilize the speed and convenience of the machine in order to more efficiently serve their customers. The TendedBar machine can be linked with a bar/restaurant’s point of sale system (POS) to maintain a single transaction on the back-end reporting.
TendedBar machines can be synced with radio frequency identification (RFID) enabled wristbands. For self-service bar units, these bands can be linked with a customer’s bar tab or sold in a prepaid format, allowing customers to purchase drinks through TendedBar by scanning their wristband.
TendedBar also offers an integrated reporting and analytics feature. Its system monitors every transaction and can capture information such as:
Specific event statistics include:
Additionally, TendedBar retains advertising rights on the machine’s hardscape and digital platform. Companies can pay to have the machines designed with promotional items or pay to be featured on the digital platform where customers order drinks. Various applications include:
Venues with high volumes of patrons.
Autonomous self-serving units, or in back-of-the-house applications.
Programmed to be controlled with a user’s room key.
TendedBar machines are designed to cater to venues with high volumes of patrons such as stadiums and arenas. Visitors start by linking their TendedBar wristband to their preferred method of payment (open tab/prepay) at the Point of Sale (POS) terminal. They can then order from any TendedBar machine in the venue just by tapping their wristband on the machine. Mobile vending units or permanent locations can be installed throughout the venue. Machines also come in larger two-screen and four-screen size units that can pour multiple drinks simultaneously.
TendedBar machines can be used in several different applications in bars and restaurants. They can be setup as autonomous self-serving units, or in back-of-the-house applications to assist servers.
Each machine can also replace mini bars in hotel rooms and can be programmed to be controlled with a user’s room key. In addition to providing easier, instant monitoring this also provides customers with more customizable options than a traditional mini bar.
TendedBar anticipates using a majority of the funds from this raise to help streamline manufacturing, incorporate new features into the machines, and implement the machines into venues. Most of the remaining funds are expected to be used for marketing and general working capital. The company has discretion to alter the use of proceeds mentioned based upon variances in manufacturing costs or any unforeseen expenses.
Following a successful implementation of the TendedBar unit at Jacksonville Veterans Memorial Arena, TendedBar intends to expand its service to other high-volume venues in Jacksonville, Florida in collaboration with SAVOR.
TendedBar is currently focused on supplying machines to customers and then splitting a percentage of sales from each drink sold. Their current contract with SMG is structured so TendedBar receives 20% of gross sales and retains advertising/ data rights to the machines. The company also plans to sell individual back-of-the-house machines to customers. In the future, TendedBar anticipates generating additional revenue by selling advertising rights on their unit’s touch screen platform and by offering data collected on purchases to vendors and suppliers.
In July 2018, TendedBar signed a contract with SAVOR—a division of international public facility manager SMG World—to install a 4-Screen TendedBar machine with a beer wall in Jacksonville Veterans Memorial Arena in Jacksonville, Florida. The contract is structured so TendedBar will receive 20% of gross sales on the machine for a period of one year, that automatically renews every year until either party decides to opt out. TendedBar will also retain advertising and data rights to the machine. SMG currently manages seven different venues in Jacksonville, Florida, including the following:
Globally, SMG manages 243 facilities across eight countries that are visited by 65 million guests annually.v
Since inception, TendedBar has generated $12,011 in revenue. Revenue was primarily from the sale of a machine to a potential independent sales representative in 2016.
Year-to-date through June 2018, TendedBar has incurred $2,300 in total expenses. Interest, followed by legal and professional fees, were the largest expenses. In 2017, TendedBar incurred $5,100 in total expenses, a 69% decrease compared to 2016. Interest, legal and professional fees, and software and subscription fees were the largest expenses in 2017. In 2016, TendedBar incurred $16,500 in total expenses. Expenses peaked in June 2016 due to costs associated with the sale of a TendedBar unit to a pilot customer.
Year-to-date through June 2018, TendedBar has generated a net loss of $2,200. In 2017, TendedBar generated a net loss of $5,100. In 2016, TendedBar generated a net loss of $5,500.
According to a report by IBIS World, the bar and nightclub industry generated $26 billion in 2017 revenue and grew at an annual growth rate of 2.1% over the previous five years. The market size and recent changes in consumer trends has resulted in new players entering the industry. Incumbents have responded by attempting to diversify with new concepts such as wine bars, cocktail lounges, and brewpubs to attract new demographics. The industry is highly fragmented with more than 65,000 different businesses. In its report, IBIS World noted several factors that may be key to future success in the industry, including:
Food and beverage sales are a significant source of revenue for stadiums. To grow those revenue streams, many stadiums have begun offering higher-quality concession items, in addition to upgrading equipment to make services more efficient.vii As more offerings become available to visitors, venues also need to deal with greater staffing demands. However, it is often difficult to hire experienced staff to manage concession services given the short-term nature of various sporting seasons.viii
Surveys have shown that sales from concessions are one of the most influential factors on a fan’s experience. A 2016 survey released by Oracle Hospitality showed that 45% of sports fans have abandoned concession lines at least once in the last year because of long wait times. On average, U.S. fans said they would spend an additional $20 on concessions if wait times were cut in half, representing a 42% increase in the typical amount spent per person per game. According to the study, the average concession wait time in the U.S. is 30 minutes and the average amount spent on concessions per person per game was $47.ix
Jay founded TendedBar in 2014 while still enrolled at Purdue University. Since graduating from Purdue with a degree in Electrical and Computer Engineering Technology, Jay has worked as President and CEO of TendedBar. Recently, he also began working as a sales engineer for Irby Electrical Distribution, based in Nashville. Jay has previous experience working as a sales engineer for companies such as Rockwell Automation, Ingersroll Rand, and EESCO.
Justin co-founded TendedBar in 2014 after several years of working in interior design. He graduated from Florida State University with a bachelor’s degree in Housing and a has a master’s degree in Interior Architecture/Design. In addition to currently serving as COO and VP of TendedBar, Justin also serves as Director of Construction at LYNK Capital. Justin has also run his own consulting and design firm in Jacksonville, Florida for the past five years.
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