Los Angeles-based startup Tippsy operates Tippsy Sake Club, offering a subscription-based tasting kit to Japanese sake fans in the US. The company announced on Thursday that it has secured about 200 million yen (about $1.6 million US) in a pre-series A round. This round was led by W ventures with participation from Deepcore, KSK Angel Fund (the investment vehicle of Japanese football player Keisuke Honda), Zynga co-founder Justin Waldron, and several unnamed Japanese angel investors.
This follows their seed funding last year when the company secured $500,000 from DG Ventures, Silicon Valley-based deeptech-focused TSVC, San Francisco-based StratMinds, and others. DG Ventures operates Open Network Lab’s Seed Accelerator Program in Tokyo where Tippsy was selected and participated in the program’s 20th batch last year. The latest round brought the company’s funding sum up to date to 260 million yen (about $2.1 million).
Tippsy was founded in 2018 by Genki Ito who has a 10-year experience of marketing Japanese sake products at a Japanese food importer in the US. Tippsy brings its members tasting kits of mini bottles from a selection of 400 varieties of sake for $99 for three months on a subscription basis. Japanese sake has been recently gaining popularity in the US, especially among millennials, and 99% of the club’s members are Americans.
Despite the boom in sake, it has some challenges in sales and marketing. First, even if you find good sake at a restaurant, it’s hard to find the place to buy it in the US for drinking at home. Detailed descriptions on sake bottles and on the brewer’s website are written in Japanese, which the average Americans cannot read. Furthermore, there are also restrictions to sell sake products based on the direct-to-consumer model due to laws created during the Prohibition Era. In addition, because the supply chain of alcohol drinks is fragmented, there is no culture for sake brewers or manufacturers to educate their brands to retailers.
Tippsy has been focusing on brand communication, including storytelling for each brewery, to introduce the differences in taste to American consumers who are less familiar with Japanese sake. It now introduces over 400 sake brands and has received over 5,000 product reviews from members and others. By sending a mini-bottle of different sake brands each time, the club allows members to discover new brands as well as a direct marketing channel for brewers allowing them to reach their potential fans.
Tippsy works with a logistics partner with a license to distribute alcohol drinks directly to consumers throughout the US, building close relationships with members consuming sake products. Having been collecting details from breweries and providing them to users, the company plans to provide feedback on members’ preferences to breweries for better marketing and product development in the future. The Tippsy team includes a graduate of Sake School of America, the largest sake tasting school in the US, aiming to strengthen its effort to help consumers more learn about Japanese sake.
In the space close to Tippsy’s business, our readers may recall Cool Japan has invested $10 million in Winc, a US-based e-retailer and wholesaler of wine products, aiming to help cultivate the demand of Japanese sake in North America. The company achieved a postponed IPO on the New York Stock Exchange last year, with a current market cap of just under $43 million.