Boba Tea Could Be The Best Investment Opportunity Nobody Is Talking About
/Attention Boba tea lovers. Cities around the United States are bubbling with a new boba bar to quench your thirst and with the potential to boost your bank account.
Bobacino, a colorful robot-operated kiosk designed to dispense boba tea, is campaigning for another round of equity crowdfunding (*please note that the campaign is now closed).
The Bobacino boba machine
Bobacino’s flagship product is a boba machine that is fully automated and robotically operated. The stand delivers high-quality, affordable bubble tea drinks with low overhead costs. According to the company, Bobacino cuts operating costs by 35% for traditional boba shops.
A boba machine could help food entrepreneurs and traditional boba shop owners meet the growing demand. Boba tea is a $1.9 billion global market and is projected to hit $4.3 billion by 2028.
However, despite worldwide growth and popularity, boba - also known as bubble tea - has not reached all parts of the United States. Boba tea is highly concentrated on the coasts, due primarily to the high costs associated with building and operating a physical store. Bobacino’s bubble tea station solves the affordability problem and gives businesses an opportunity to increase their revenue potential.
Affordability and staffing challenges are plaguing businesses across the food service industry. Bobacino is an example of how technology - specifically food robotics - may be the future of food.
Rise of food robotics
The food industry is going through a shift. Restaurants around the United States are faced with the current challenge of not having enough staff to meet the demand levels. According to the 2022 State of the Restaurant Industry report produced by the National Restaurant Association, 7 in 10 operators say they don’t have enough staff to support their current service demand.
As the cost of food continues to rise and staffing shortages are crippling some restaurants’ ability to meet consumer demand. In order to solve the dilemma, restaurants are turning to robots like Bobacino to augment their human staff. In fact, 50% of U.S. restaurant operators are planning to deploy automation technology in the next two to three years.
Bobacino’s patented technology reduces overhead costs of producing bubble tea, giving small food businesses the opportunity to significantly boost their revenues.
The history of Boba tea
Bubble tea was born in the 1980s in Taiwan. While the exact origins of boba tea are debated, most believe it began in 1986 at a small tea shop in Taiwan. The shop created a new product to attract customers, a product that combined four ingredients - tea, milk, syrup, and tapioca balls – into a brand new drink. The sweet, milky yet chewy concoction was an instant success and boba tea was officially born.
Starting in the 1990s, boba tea rose in popularity in the United States. No one is quite sure of the tipping point, but Food & Wine theorizes it was a combination of the rise in cafe culture due to the emergence of Starbucks along with the rise in the acceptance of aloe juice and coconut water as beverage options. Starbucks justified a midday pick-me-up, and aloe juice and coconut water made it ok to drink beverages with chewy bits.
Today, boba tea is a cult favorite, especially amongst the college-aged and the twenty-somethings crowd. Bubble tea drinkers are connoisseurs of the product and have very specific requirements. Namely, around the chew density of the balls; the balls can’t be too hard or too soft otherwise the tea’s drinkability is in question.
Bobacino has found a way to perfect this simple, yet delicate, process for making boba tea using a robot.
About Bobacino
Bobacino’s bubble tea machine offers a few key benefits. It has a low barrier to entry; it costs $50,000 to purchase the boba machine - compare that to opening a restaurant, which could be $200,000 - $500,000.
Another benefit is the high margin potential. There are minimal overhead costs to maintain the kiosk. These costs include ingredients and a part-time staff worker to replenish the ingredients. Therefore, the kiosk has the potential of yielding a 31% profit margin.
Additionally, there is the benefit of the quick setup time. It takes less than two weeks to set up the kiosk. A small food business or local entrepreneur expanding into the boba industry could get their operation up and running in a very short period of time.
Since Boba tea has cultural roots, it is important to look at the culture of the company when deciding if you wish to invest in Bobacino’s stock. Bobacino is run by a white guy and there have been questions of cultural appropriation.
Should a white guy be the one behind this Boba tea company?
Bobacino has addressed this valid question surrounding cultural appropriation. They also hired Sandy Kwong as its chief boba officer. Kwong is the co-founder of MILK+T, the first self-serve boba and bubble tea food truck. MILK+T was later sold and Kwong now focuses solely on Bobacino.
Is Bobacino a good investment?
If you’re wondering, “is Bobacino a good investment?”, at Money & Mimosas we encourage you to ask yourself three questions:
What is the potential growth or upside?
What are the potential roadblocks?
How does this align with my values and/or overall investment strategy?
For starters, Bobacino is also backed by venture capital firms with a solid track record. EMBARK Ventures is a pre-seed and seed-stage fund focused on "deep tech" companies and Wavemaker Labs is a top 10% early-stage VC firm and manages over $550M in assets.
The combination of the VC backing and the crowdfunding success is one indicator of growth potential since other investors are banking on the company’s success.
Another indication of growth potential is the size of the Boba tea market and the lack of competition. According to their investor deck, the Boba market is projected to hit $4.3 billion by 2028. In fact, Yelp labeled boba tea as the most popular delivery item in CA and MI during early 2020. However, despite its popularity, there are only 3,300 boba shops in the U.S.
One potential drawback is the adoption of boba tea in the Midwest and Southern parts of the United States. Perhaps, there is a reason most boba tea locations are on the coast. The East coast and West coast have vastly different cultures compared to the soda-loving (or do they say pop-loving) middle of the country and sweet tea-drinking South. Only time and experimentation will tell if adoption will be seen across the country or if Bobacino will lead to a saturation of the market on the coasts.
When it comes to your values, we encourage you to research the team, the company’s overall stance on the environmental + social causes you care about, and conduct your own due diligence on how Bobacino could fit into your own personal investment strategy.
How to invest in Bobacino stock
Bobacino raised $3.74 million during its equity crowdfunding campaign and the campaign is now closed.
Disclaimers:
Bobacino is offering securities through the use of an Offering Statement that has been qualified by the Securities and Exchange Commission under Tier II of Regulation A. A copy of the Final Offering Circular that forms a part of the Offering Statement may be obtained from: Bobacino
Money & Mimosas May Receive Monetary Compensation By The Issuer, Or Its Agency, For Publicizing The Offering Of The Issuer’s Securities. Money & Mimosas And Issuer Of This Offering Make No Promises, Representations, Warranties Or Guarantees That Any Of The Services Will Result In A Profit Or Will Not Result In A Loss. Any Comments Expressed Herein Are Publisher’s Own And Not Intended As Investment Advice Or A Solicitation.
