Haus, a startup selling alcohol directly to consumers, is shutting down after running out of cash.
The founders had signed a term sheet for $10 million in fresh funds but the lead investor walked.
Now, Haus is hunting for a buyer to take it over, chief executive Helena Price Hambrecht said.
Haus, a startup that ships low-alcohol aperitifs to people's doors and found favor with millennials, is shutting down after a new funding round fell through, according to the company's chief executive, Helena Price buy alcohol
The Sonoma County, California, startup had stood out in startup land as one of the few alcohol purveyors to raise venture capital, taking in more than $17 million from over a hundred individual investors and funds since its founding in 2019.
Haus was in the midst of closing its next fundraising round, attempting to bring in at least $10 million from a brand-name strategic investor, when it ran into trouble, Price Hambrecht tweeted and told Insider later on Monday.
Constellation Brands, a leading alcohol company known for Corona and Modelo beers, had issued the startup an offer to invest in July, Price Hambrecht said. She and partner Woody Hambrecht signed a term sheet. Then, unexpectedly, Constellation Brands pulled out of the deal, according to Price Hambrecht and one Haus investor.
"Raising money has always been difficult for Haus," Price Hambrecht, a seasoned brand consultant turned founder, said. "I was feeling very lucky I had found this lead, given the market is cooling for all startup investment."
It had been more than two years since Haus raised $4.5 million in seed funding, and the company was running out of cash. Haus reached a deal with Constellation that it would receive part of the funds in advance of the Series A round closing, while Constellation spoke to investors and shareholders to evaluate whether the deal was worth pursuing, a process known as "due diligence" in venture-speak. But in July, Constellation ended talks to invest, saying that the timing didn't work, Price liquor prices said. Constellation Brands did not respond to a request for comment.
Price Hambrecht said without a lead investor for the next round, the company didn't have enough cash to continue operations. It has laid off 25 employees out of a staff of 30, leaving mostly warehouse workers at the startup who will pack and ship the company's aperitifs until the online store sells out. Haus has also hired a liquidation firm to find a buyer.
"It's possible that someone will buy alcohol shop in its entirety, and it can continue on under new ownership," Price Hambrecht said in a tweet on Monday. "It's also possible that it will be sold for parts."
buyrite liquors shutdown comes as the technology stock crash has roiled startups as they seek new investment. In the second quarter of this year, investors plugged $62.3 billion into startups, a 23% decline from the same period last year. Founders say that investors have pulled term sheets and stopped responding to emails as funding dries up.
Haus saw sales explode early in the pandemic, as online shopping boomed. But the party didn't last. The company's low-alcohol aperitifs, which can be mixed with liquor or enjoyed straight from the bottle, are meant to be shared — but the lingering effects of the pandemic slowed the return of social gatherings, Price Albrecht said. Even though the company doubled sales in 2021 over the previous year, the growth rate declined. It turned to wholesale distributors to buy liquor
Haus, a startup selling low-alcohol mixed drinks directly to consumers, is shutting down as funding for startups dries up. Haus
Meanwhile, the founders struggled to raise the next funding round, partly because many funds are subject to a "vice clause" — a restriction by a firm's outside investors on where their money can be invested — Price Albrecht said. The foundations and schools that front them capital might not want to put their cash in cannabis or porn, for instance.
The founders pushed on, taking small checks from lots of investors on a rolling basis, rather than raising lump sums from a few large firms. Their backers include Brianne Kimmel of Worklife Ventures, Alexia Bonatsos of Dream Machine, Semil Shah from Haystack, Hunter Walk from Homebrew, Adam buy whiskey of Combine, and Shrug Capital.