Is There Really Anyone Not Interested in Beer Delivery?

Finally, a service for buying beer ONLINE (without stupid service fees).

Heyyyo,

Is 2020 over yet?? “Unplugged” has no boundary this holiday… I’m thinking of letting my daughter hide all my chargers Tuesday around noon!

Some housekeeping items, 3 newsletters ago I shared a few cool digital gift ideas, including a startup called EarlyBird, that lets you gift stocks to kids instead of buying toys they’ll never use — the app is officially live in the App Store.

Download it here 👉 https://bit.ly/3gRR2lA

Also, Republic finally has a mobile app to make startup investing (and managing all those investments) much easier… and, it’s pretty slick!

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Scott


Company Bio

TapRm is a platform for everything beer — by collapsing the supply chain, TapRm enables beer brands to sell to their consumers more directly through licensing that allows them to act as the wholesaler, retailer, delivery courier, and marketer.

To my knowledge, this type of licensing is an industry-first. Also, (more on this later) not even .2% of current beer sales occur online — I cannot even grasp that. For context, food is around 2-5% and pretty much everything else selling on Amazon makes up 25% of total sales. Let’s assume this pandemic was the first time you used a meal or grocery delivery service… Are we really going back to store lines? I can’t. So, now ask yourself… would you like to just have a weekly beer delivery? That’s TapRm in a nutshell. The modern day milk man.


Meet the Founders

Watch my full interview with TapRm’s Founder and CEO Jason Sherman here 👉 https://bit.ly/38aSlbk 

Jason Sherman is TapRm’s Founder & CEO. Prior to this, Jason managed investments and acquisitions decisions into a host of beverage businesses including e-commerce, CPG, technology and logistics startups at Zx Ventures, the global incubator and venture capital team funded by Anheuser Busch InBev, the leading global brewer.

Jason also holds a J.D. from Harvard Law School and a B.A. from Harvard in economics.

Before I get ahead of myself, I just want to point out 3 keys to success in this business: legal strategy, a keen understanding of the inner workings of the beer/beverage world, and access to distribution partners (✔️ ✔️✔️). Now, let me get ahead of myself a little bit. Uber founder Travis Kalanick was successful in accomplishing what many had tried and failed at because he knew what none of the rest appeared to — to win in a decentralized, margin-plagued, highly regulated/political business staving off disruption, you need to start first by making your plans legal. Next, you must incentivize those who stand to gain/lose the most to see the world your way. Then, try to build a beautiful mouse trap!

I’m not comparing Jason to Travis, but I am pointing out some obvious similarities — whether Jason (and TapRm) are successful will come down to execution, but he does have the prerequisites for making this dream possible.


Traction

  • Fastest growing U.S. alcohol e-comm platform during COVID-19

  • Over 1.5M beers sold with a $5M annual revenue run-rate

  • 670% annual growth rate; projected $22M revenue over next 18 months

  • 35K+ unique customers & 110 brand partners

  • 650+ retail partners, including Whole Foods, Total Wine, Eataly & Per Se

  • $119B+ total U.S. market with $4B+ addressable market in New York alone

If TapRm were in the business of hosting Zoom beer tastings, I’d credit its hockey stick growth in 2020 to Covid and call it a day. But, like Zoom itself, Covid only accelerated inevitable behavioral changes and cast a giant spotlight on a massive market opportunity that is everything-on-demand. TapRm’s model is all but proven in NYC, so duplicating the model requires some legal nuance and building out a hub & spoke distribution model in all major markets — think Amazon fulfillment centers, but for beer.


Market Opportunity

The pandemic has put a premium on home delivery. People now expect — naye, demand — home delivery on consumer goods, and the brands, retailers and platforms that provide a seamless delivery experiences are thriving in the pandemic economy.

Retail and financial experts expect this behavior to continue even after the pandemic is over, which is why it’s easy to be bullish on TapRm, an ecommerce and delivery platform for one of life’s greatest blessings: beer.

In just a year and half, TapRm has sold more than 1.5 million beers, and that’s only in New York City. TapRm’s success is due to it simplifying the beer delivery process, getting rid of the usual barriers and middlemen and thus driving down all the exorbitant costs and fees typically associated with beer delivery. 

It’s reasonable to assume TapRm will grow as it expands to new cities, and as it does, it will have to contend with the Byzantine beer delivery laws in each new city. If anyone knows how to maneuver these regulatory hurdles, however, it’s TapRm founder Jason Sherman. Prior to TapRm, he was an attorney for Anheuser-Busch, helping the international beer giant in up-and-coming beer brands.

TapRm will have to compete with more established booze delivery platforms such as Drizly and Saucey, but TapRm has two distinct advantages.

For one, TapRm is not just a delivery platform, it’s also a SaaS company. TapRm provides ecommerce software that allows beer brands to sell to their customers directly.

Two, TapRm is hyper-focused on beer. When a person orders at Drizly, they’re at the mercy of what the local liquor store has in stock. Drizly’s delivery service is commodified. By concentrating strictly on beer, TapRm puts itself in a position to own the category and become the go-to ecommerce destination for all things suds. I can cheers to that.


Terms & Takeaway

Invest in TapRm here 👉 https://bit.ly/37pTw7o

Security Type: Crowd Safe
Valuation Cap: $14,000,000
Investment Goal: $1,070,000
Raised (as of publishing): $220,128
Minimum Investment: $100

Here's what I like: TapRm is a legit BFI! I’d bet my life on absolutely everything you can think of being delivered to your home by 2025. I’m also a huge believer in betting on people over ideas. In this case, I’d bet on Jason and his idea. His understanding (and ability to circumvent) prohibition-era regulation and experience navigating the deep state of brewing giants is what separates TapRm from the field. Additionally, the tailwinds are with the market… meaning, there’s no question (similar to sports betting and weed) that beer-delivery-as-a-thing is a forgone conclusion; it’s just a matter of who leads it.

Here's what I don't love: I mentioned Travis Kalanick earlier. I forgot to mention the part about him being an incredible asshole. That trait contributed to both his success and undoing at Uber. Taking on legacy regulation and systematic rigidity requires some asshole’ish’ness — but not so much that nobody wants to work with you.

Once you pave the way, the sharks will come to feast and it takes some serious cough* conviction?? to box them all out and hold the ship steady.

This is one of those investment opportunities that make so much sense that it’s easy to overlook obvious obstacles.

Who should invest and why: Given the low minimum investment of $100 and pretty sweet perks (from gift cards and kegs to bar crawls in the Big Apple) I’d say this is a great investment opportunity for anyone not opposed to the notion of selling beer. The $14m value cap is nothing to sneeze at, but the long term potential is exceptional, the founder’s connection to industry leaders in M&A make acquisition likely and market trends coupled with rapid growth should make access to capital relatively easy.

Overall, this is as much a bet on Jason’s ability to navigate the state-by-state legal maze as much as anything.

As always, startup investing is super high risk, anything can happen. So, don't invest money you can't afford to pour down the drain... 🍻💸

Invest in TapRm here 👉 https://bit.ly/37pTw7o

Questions? DM me on Twitter @kitun


Disclaimer: It goes without saying, but this information should not be constituted as financial advice, my investing opinions are my own and all diligence is the responsibility of each individual investor.