Pizza vending machine company Basil Street announced this week that it is raising its Regulation A+ round of financing through equity crowdfunding. The company is looking to raise $20 million on the SeedInvest platform, where reservations to invest in Basil St. are currently open.
Basil Street makes what it calls Automated Pizza Kitchens (APK), which are standalone vending machines that serve up hot pizza. The APKs are roughly 20 sq. ft. and hold 150 frozen 10-inch, thin-crust pizzas. When a customer places an order via the touchscreen or mobile app, the APK heats the pizza up using a non-microwave oven that cooks the pies in about three minutes.
That Basil Street is choosing the crowdfunding route isn’t too surprising since the company has yet to take traditional VC funding. According to the prospectus on SeedInvest, Basil Street raised $3.5 million in a convertible note in 2018, followed by three tranches of a Series A round from private investors between Feb. 2020 and Jan. 2021, totaling $8.99 million.
In a video chat this week, I asked Basil Street Chairman and CEO Deglin Kenealy why he’s turning to the crowd for funding instead hitting up VCs. “When you have someone come along and write a big check. It’s too far an advantage for the check writer,” he replied.
But Kenealy also echoed a more intangible sentiment that we hear from other startups like Piestro and Blendid about going the equity crowdfunding route. “We’ll get 7,000 or so investors. Those people will become cheerleaders,” he said, “I’ve got people who are invested in the business and helping us drive it forward.”
Like others in the vending machine space, Basil Street is looking to place its machines in high-traffic areas such as military bases, hospitals, universities, and factories. Basil Street has been running pilot programs and Kenealy said the company is signing deals right now that will put 50 machines in the field this Fall.
During its pilot program, Kenealy said that the company has learned a bunch of information from actual customer interaction. One thing the company learned in particular was about menus. Kenealy said that when the machine is placed in a closed location like a factory, where the same people use the machine every day, menu rotation and adding new items (like a breakfast pizza) is important. But when a machine is in an open location like an airport, where lots of people come and go, menu items can pretty much stay the same.
While Basil Street is turning to the crowd to finance its future, the market itself is getting crowded with competitors. There are a number of pizza vending machines already at market or on their way including API Tech, PizzaForno, Bake Xpress and Piestro. But, given how many locations just in the U.S. alone where a pizza vending machine could work, there’s actually room for plenty of players.
Any investment carries with it risk, but for those interested in plunking down money to own a piece of Basil Street’s pie business, the share price will be $2.82, and the minimum investment is $998.
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