Haus, a VC-backed appetizer startup, goes up for sale after Series A failure – TechCrunch

Haus launched in 2019 in response to a generation’s thirst for a more transparent liquor brand, raising millions in venture capital from angels such as Casey Neistat, Away co-founder Jen Rubio and funds such as Homebrew, Haystack Ventures, Coatue, Shrug Capital and Worklife Ventures. Haus has raised $17 million on rolling SAFE tickets to date.

Today, CEO and co-founder Helena Price Hambrecht tapped into the same philosophy of transparency to announce that the startup’s Series A failed and the company is in the process of shutting down. In an interview with TechCrunch, Hambrecht spoke about Haus’s transition from a VC-backed startup to a company currently for sale, as-is or in parts.

Haus sells a series of low-alcohol (alcohol-by-volume) citrus, spice, and floral aperitifs that are meant to be an alternative to spirits and a bit stronger than wines. Made in Sonoma, Calif., Haus also promised a product made with all-natural ingredients with a key differentiator: users could order it online and have Haus bottles delivered to their doorstep. A digital and healthier alternative that replaces wine subscriptions has given the company a strong social presence.

Hambrecht, a Silicon Valley branding veteran, took over as CEO of the company in 2021 after splitting from co-founder and former husband Woody. This year, Haus shared that he had crossed the $10 million revenue threshold and recently announced that he would achieve national distribution with Winebow, another milestone for the then-only direct-to-consumer company.

Yet as the pandemic spread across the globe, the company faced a series of challenges, including supply chain issues, lack of in-person word-of-mouth growth, and iOS changes.

“It was difficult to build the business that I wanted to build during the pandemic given that we were building a social product,” Hambrecht said. “We didn’t have a gathering of people, we didn’t have natural word of mouth. We were a purely digital growth brand at that time, great for acquisition but not good for monitoring long-term behavior. »

The progress came as Hambrecht struggled to raise venture capital funds, largely, she says, because venture capitalists are unable to back liquor companies due to the vice clauses in their LP agreements. “The booze stagecoach is very different from software; with software it’s 4-6 weeks, with alcohol it’s months. I’ve learned over time that almost every process, from legal operation to diligent fundraising, is 100 times harder for alcohol,” Hambrecht told TechCrunch. Because the company was unable to raise funds from traditional venture capital, it took out debt financing and began looking for private capital and strategic partners.

Enter Constellation Brands, the producer and marketer of beer brands such as Corona Light, Modelo Especial and Pacifico. In 2018, the beverage company’s venture capital arm invested $100 million in startups led by women. Constellation’s dedicated fund stood out for Hambrecht because, alongside the Winebow deal, it would help expand the brand’s distribution.

Hambrecht says Constellation has pledged to lead the startup’s $10 million Series A, and even offered to advance seed money as the lead began to dwindle. Then, at the last minute, Constellation pulled out of the deal without any specific reasoning other than “timing,” she says. TechCrunch reached out to a Constellation spokesperson for further comment, but did not immediately respond.

“Here’s an update from Haus that isn’t fun to share,” Hambrecht said. on Twitter Monday morning. “Our lead investor recently refused to move forward with our Series A which we were in the process of closing. Without them, we do not have the cash to support continued operations at this time. “has only a month left to sell and ship its products. It no longer makes new products, but it could pick up again, he says. “We were just starting to see the gathering come back, and I was looking forward to this new chapter.”

Co-founder says ‘there’s no bad guy’ in shutdown story, but Constellation’s exit shows another example of how hard it is to be a venture capital-backed company and directly to consumers. When Haus announced its $4.5 million seed round, Hambrecht described the company as “brighter for liquor”; fast forward, and Glossier has had its fair share of struggles as well.

Despite the current situation, the co-founder doesn’t think going the company route was a mistake. “I am grateful for the funding we had and what we were able to do with it. You’re building the business you want to see in the world and you know it’s going to cost a little more upfront. Instead, she says if she was going to focus on becoming a more self-sufficient startup — or running her operations from cash flow — she should have made that decision a year ago.

Following the failure of the Series A deal, Haus is currently for sale through an ABC process or assignment process for the benefit of creditors which is a voluntary alternative to filing a formal bankruptcy petition. At its peak last year, Haus had 30 employees; now only four work alongside Hambrecht, all as contractors to the company.

“It’s always dangerous to be short of money. We got there, and it’s unfortunate, but I know there are a lot of companies in that position right now,” says Hambrecht. “I have been sharing my work online for over 20 years now. It’s definitely something in my DNA. If sharing this process is helpful for another Founder in a difficult situation and given their options, that makes it all a little more interesting.

As for the future of the entrepreneur, a Silicon Valley branding veteran, there are no immediate plans to jump into a new startup.

“My goal, right now, is to be as helpful as possible to make this ABC process have the best possible outcome. After that, I’m going to take some time to process the last four years; it’s been so amazing, so brutal and traumatic; I’m going to rest and process this.

Leave a Comment

Your email address will not be published.