Photo - Kaldi AI is a product for sorting coffee beans.
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Kaldi AI is a product for sorting coffee beans.

Sweden
Market: Food industry, Services, Artificial Intelligence
Stage of the project: Prototype or product is ready

Date of last change: 26.09.2019
Min investment
$  100.000
Total required
$ 2.000.000
Rating
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Idea

There are millions of coffee places that serve bad coffee due the lack of quality in the coffee beans the buy.
Sorting good coffee beans from bad is a difficult and often manual job that small and medium coffee shops cannot perform.
Kaldi removes defective coffee beans according to SCA (Specialty Coffee Association) and delivers a flawless coffee cup.

Current Status

We have invested one year part-time and we just finalized the MVP.
During May 2019 we traveled to China for finding manufacturers to our product and contact early adopters. We got the interest of two local coffee chains and we remain in contact with them.
Now we would like to launch the product to the market and we are seeking Angel investors or Venture capitalists to launch in Asian market.

Market

China is switching from tea to coffee.

There are over 140 000 coffee shops in 2018. Europe has around 300 000 coffee shops.
We do not focus on China because of the size, we focus on China because is an emerging market and it is open to foreign companies. Europe is much bigger but more conservative compare to China.

There are around 450 million in ages 15 -25 years old.

Source: https://www.statista.com/statistics/872181/number-of-cafes-in-china/e

Problem or Opportunity

Most of the coffee shops serve defective coffee beans, giving to the customer a bad experience.
On average a coffee cup contains 10% defective beans. Just one bean is enough to ruin the coffee cup.
The machines to sort coffee beans are very expensive and big. Only large coffee firms are able to afford them.

Solution (product or service)

Kaldi is unique product that delivers a flawless coffee cup.
The product is build with inexpensive hardware, and with small dimensions; making Kaldi suitable for small medium coffee shops and roasters.

Kaldi removes the defective coffee beans according to Specialty Coffee Association giving the availability for the coffee shop to sell coffee to a higher price.

Competitors

There are two large companies which focus on big roaster or large chains:
- Buhler (Swiss)
- Satake (Japanese)
None of these companies address the needs for small medium coffee chains. The focus on large corporations related to coffee. Also their machines are very expensive and big, usually around $100 000

Advantages or differentiators

Kaldi builds on a proprietary data set and IA. The majority of the products are based on computer vision and don't update their models for emerging coffee countries like Peru, Vietnam or India.

Kaldi can learn faster than the other competitors as it has built in AI. If new types of defects occurs, Kaldi will be able to remove them while the competitors won't.

Finance

Our estimates are:
production cost per unit $632 this price might vary depending on the selected manufacturer.
Market price: $3000 to $5000 based on our trip to Shenzhen and Guang Zhou

Sales estimate:
Year 1: 10 000 units (China only)
Year 2: 14 000 units (China only)
Year 3: 20 000 units (China and Japan)
Year 4: 22 000 units (Expansion to Europe)
Year 5: 21 000 units (Expansion to USA, and Australia)

Business model

Our business model is to sell the product for a fix price at the beginning. We have done the business model canvas.

Customer segments (Niche market)
Small-medium coffee shops and coffee roasters.

Customer relationships
Personal assistance / Dedicated personal assistance for early adopters and important customers.

Channels
We will test Alibaba and Ebay.

Barista fairs and competitions

Sales
Sales online through the website.
We will partner with relevant companies.

Marketing
WeChat, Specialized blogs on coffee, influencers.

The value proposition is qualitative and it provides value added product or service for our customers (Coffee shops and roasters).

Key Activities
Transform the MVP into market ready product
Apply for pattern (product design, technical solution, etc)
Improve the proprietary dataset for the AI.
Continue and improve the relationship with early adopters.

Key resources
The product hardware and software (AI and computer vision)
The dataset (of coffee bean images)
The brand (Made By Sweden)
List of early adopters
The CTO AI, computer vision and artificial knowledge.

Key Partners
Companies that can provide repairs and support to coffee shops and roasters.
Distribution companies (for the product)

Cost structure
Salaries of five employees working full time. Estimated $200 000 per year
Product manufacturing cost approximaly $632 per unit
Patent in China, around $20 000
Webshop $1 000 per year


Revenue streams
Product sales. Each unit will cost between $3 000 up to $5 000
Training and certification One time fee of $500

Money will be spent on

The money will spent on making the MVP into a market ready product.
The physical product will get a appealing and unique design.
The AI will be improve and perfectionate.

We would recruit a few people to speed up the product launching to be available after Chinese Spring festival February 2020.
1 -2 Sales person (will also do marketing) located in China.
1 Mechanical engineer
1 AI Scientist (Python, C++)

Offer for investor

We're looking for seed funding.
We are willing to share 10% up to 30% of the company in exchange for $1 500 000 or $2 000 000.
We are looking for smart money, someone with connections in coffee chains, coffee distribution or manufacturing in China in first hand. Other countries like Japan and USA are also interesting.

Team or Management

Risks

The sale team could fail to achieve the sales goals.

The average consumers may not appreciate the difference in the flavor and focus only on the caffeine effect.

The team will have two locations, Stockholm (in Sweden) and Guang Zhou or Shenzhen in China. This could impact negatively the milestones in the project for the product release.

Incubation/Acceleration programs accomplishment

Kaldi has applied to the Royal Institute of Sweden Innovation program. The process is on going.

Won the competition and other awards

Not yet.

Invention/Patent

We plan to patent the algorithms, data set, and the product design once the product is ready for the market.
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Idea
Current Status
Market
Problem or Opportunity
Solution (product or service)
Competitors
Advantages or differentiators
Finance
Invested in previous rounds, $
Business model
Money will be spent on
Offer for investor
Team or Management
Mentors & Advisors
Lead investor
Risks
Incubation/Acceleration programs accomplishment
Won the competition and other awards
Invention/Patent
Photos
Product Video
Website address