Bellwether Coffee, which makes electric, ventless internet connected coffee roasting machines, today announced that it has closed a $40 million Series B round of funding. The round was led by DBL Partners and brothers Lyndon and Peter Rive, with additional participation from FusionX, Congruent Ventures, Coffee Bell, Tandem Capital, Spindrift Equities, XN Ventures, Balius Partners and Hardware Club. This brings the total amount of funding raised by Bellwether to $56 million.
As we’ve written before, Bellwether is basically a coffee roaster in a box. Because the machine is electric and ventless, just about any business can install one without needing to go through major physical retrofits to deal with the harmful gasses emitted during traditional coffee roasting. Bellwether’s internet connection means that users can download roast profiles from Bellwether’s cloud and re-create them on-site with precision.
The result of all this makes Bellwether emblematic of a broader trend we are seeing in food tech: pushing food production to the edge. Coffee production at the edge creates new possibilities for coffee sellers, coffee roasters and consumers.
For retailers, having their own roaster means stores like small cafés and supermarkets can create their own custom roast coffees specific to tastes in a particular region, opening up new lines of revenue. For independent roasters, a machine like the Bellwether allows them to expand geographically without having to ship coffee around the country or globe, which is expensive. Instead, smaller roasters can just upload their roast profile instructions to Bellwether’s cloud marketplace and make it available to anyone with a Bellwether. For consumers, on-site roasting means fresher coffee because it is roasted closer to the time of purchase and with less transit.
Nathan Gilliland, CEO of Bellwether, told me by phone yesterday that his company will soon have installed 100 units so far this year, and anticipates installing another 500 units next year. Gilliland said that 40 percent of his customers are independent cafes with one or two locations. Another 40 percent have multiple locations and may already do their own roasting, but use Bellwether to expand geographically. The remainder is a mix that includes a number of grocery stores roasting either their own brand or leveraging profiles from local roasters.
Bellwether generates revenue is a few different ways. It sells the roasting machine for $75,000 or leases it for $1,000 a month. There is a software subscription to run the machine which costs anywhere from $10 – $200 a month. Finally, Bellwether also sells green coffee beans from different farms for $3 – $5 per pound, though you don’t have to purchase them through Bellwether (though Gilliland said that 75 percent of Bellwether customers do).
Customers who do purchase a Bellwether are putting them on display in their stores, according to Gilliland. This theatricality and transparency echoes what we’ve heard elsewhere as food production goes to the edge. One of the reasons supermarkets are looking at Breadbot, which is a mini bread making factory — is that it can engage and delight shoppers.
Bellwether isn’t the only company in the coffee-roasting-on-the-edge space. Roastery, which debuted around the same time as Bellwether, also makes an electric ventless coffee roaster. Though at this point, Roastery has only raised an undisclosed round of seed funding.
Gilliland said Bellwether will use the new funds to scale up operations across sales and manufacturing to meet demand.
*An earlier version of this post stated that Bellwether had already installed 100 units this year.