Atomo raises $40M for molecular coffee and launches RTD products

Dive Brief:

• Atomo Coffee, maker of a molecular version of the brewed beverage, closed a $40 million Series A funding round with investments from S2G Ventures, AgFunder and Horizons Ventures. The Seattle-based startup plans to use the investment on product development and to scale up manufacturing. 
• The company is also officially launching its first products: ready-to-drink cold brews in Classic Black and Ultra Smooth varieties, and Oat Milk Latte. Atomo is selling the products at its website and will begin shipping July 15, with plans for a retail launch later this year.
• Atomo aims to improve upon the emissions and water usage of traditional coffee without sacrificing taste by reverse-engineering the popular beverage into its “beanless brews.”

Dive Insight:

Founded in 2019, Atomo has been focused on creating a product that can replicate coffee that it says uses 94% less water and emits 93% less carbon. To do so, the startup uses a proprietary production method to turn ingredients including upcycled date pits into a beverage that it said provides a “delicious coffee experience.” 

It’s clear that investors are sold on Atomo’s ability to deliver. This latest round would bring the startup’s total funding to $51.6 million, according to Crunchbase.

Atomo’s RTD cold brew contains a blend of date seed, chicory root and grape seed extracts, along with inulin and natural flavors. Each 8-ounce can of Atomo Molecular Cold Brew also has 84 milligrams of caffeine. The Oat Milk Latte variety contains oat milk from Minor Figures, a U.K.-based startup that recently earned a minority investment from Danone Manifesto Ventures,

A four-pack of 8-ounce cans is priced at $22, an eight-pack is $40 and a 24-pack is $120. According to a fact sheet shared with Food Dive, Atomo said it is also developing a ground product that would allow consumers to brew a beverage using the same methods as traditional coffee. 

The company said that consumers will not have to sacrifice taste in switching to its beanless brew. It cited a recent blind taste study conducted by National Food Labs that had Atomo’s cold brew beating “competitive conventional cold brew products on preference 2:1.” Atomo said panelists could not tell that its product wasn’t made with coffee beans.

Atomo’s coffee also recreates the popular morning beverage in a way that isn’t affected by climate change. Research suggests the crop would be especially sensitive to increased temperatures, water stress and larger quantities of atmospheric carbon dioxide — affecting everything from where coffee could be grown to its flavor and aroma.

“The demand for coffee is increasing year over year with climate change significantly impacting the farming regions, which in turn will impact the consumer through price and availability,” said Rob Leclerc, a founding partner of return investor AgFunder. “Breakthrough technologies pioneered by Atomo, are going to be a part of the solution for future generations to be able [to] continue enjoying their favorite brews.”

Atomo’s molecular coffee is the latest reverse-engineered product to attract the attention of investors. In May, Voyage Foods closed a $36 million investment round to help scale up its reverse-engineered chocolate, peanut butter and coffee. Voyage Foods’ peanut-free peanut butter recently launched online and through select retailers. In February, spirit maker Endless West raised $60 million. That company extracts key flavor and aroma molecules from plants, fruits and yeasts to create what it says is a similar quality, less expensive and less resource-intensive version of whisky, wine or sake.