Take a shot with me.

NEW RAISES

Startups that you can invest in with as little as $100 right now:

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A BARTENDER’S BEST FRIEND

Typically, I don't invest in alcohol brands.

The space is really crowded, so it can be difficult to carve out market share.

But I found a startup that has near 100% share of its alcohol niche, and growing revenues by 133% this year.

It's a drink that I love, but have never seen bottled before.

The company is called Kamoti, and they make bottled green tea shots.

For those who aren't familiar, green tea shots are like dessert shots. They're half the ABV of a typical shot (20% ABV), and taste delicious.

The drink consists of Irish Whiskey, Peach Schnapps, Lemon-Lime Soda, and Sour Mix (where the green color comes from).

Here's where the brilliance comes in - bars love selling shots.

They're high margin and don't tie up the bartender for a long time. The one shot exception is a green tea shot - with four ingredients they're essentially a mini cocktail.

This is a time drain on the bartender, which reduces their ability to generate more revenue making other drinks.

Bars can't get away with selling canned cocktails, but I don't see consumers fretting over their green tea shots being poured from a bottle. Kamoti can realistically pitch their bottles as a money/time-saving product for bars.

The pitch appears to be effective, as roughly 50% of its sales are directly to bars.

Pour a glass as we pore over the financials

In 2023 Kamoti sold $472,000 while only operating in a handful of states. Now in 6 states, 2024 has them on track to sell $1.1M.

Kamoti is unprofitable, losing ~$508,000 in 2023. They made $176k in gross profits, but were unable to fully cover their marketing & operating expenses.

Still, digging through their SEC filings I can tell that they run a lean operation. So far there is just one salaried employee, and the CEO Dylan Fusco will only start taking a salary once revenue/fundraising goals are met.

With very rough back-of-the-napkin math, I think they could reach profitability at $3M in annual revenue (IF they maintain a lean structure). This seems more than plausible in 2-4 years at the rate they're growing.

Especially since they only operate in 6 states, there's ample runway for them to grow in new territories and further saturate their current markets.

Quick audience poll…

Now I wanted to try the beverage out myself, and Dylan was nice enough to send me some 50 mL bottles to test out at my bachelor party in Georgia. I like green tea shots, and these things tasted exactly like the real thing.

We had plenty of other drinks in the house but still worked through ~40 of them in one night. Safe to say, they were a hit!

And turns out, this is a major part of their marketing efforts.

Kamoti sponsors 'content houses' where they gift a group of influencers & young/fun people with an Airbnb getaway. The house comes stocked with Kamoti and over the weekend the guests generate tons of awesome content for the brand.

My posse may not have been as hot & popular as their typical crew, but hey - newsletter guys get to have fun too!

These content houses likely cost the company a few thousand dollars, but this is what you would pay for influencer partnerships anyway - the way Kamoti hosts it makes it organically fun & cool.

I think a major indicator of how successful this company will be is how pragmatic they are with their marketing budget. If they need to triple their marketing to double their sales, that won't be sustainable.

I don't think this will be the case as they actually decreased their marketing budgets by $38,060 in 2023 ($286k -> $248k).

Kamoti is raising funds at a $7.5M valuation. This places them at roughly 7x their 2024 revenue projection, which is a little high for the industry.

However - I think given their expected 133% growth rate is atypical of beverage brands and warrants a premium.

Two things that were mildly concerning but not bad enough to prevent me from investing are:

• Margins actually decreased in 2023, albeit slightly (40.8% -> 37.3%). I think the expansion into new states will cause a temporary dip in margins before becoming a positive factor long term. Not worried here.

• 58% of all 2023 sales came from just one customer. This is a bit risky, but Kamoti's customer base is rapidly diversifying (for example, that one customer accounted for 93% of sales the year prior.

Overall I think Kamoti has a shot (get it?) at making it big, and I'll be investing in their current round! Some of the key points that sold me:

• 🥇 First-Mover Advantage, essentially 0 competition

• 📶 Proven demand and accelerating revenue (34% -> 133%)

• 📈 Ample growth opportunities as they add on new markets

• 🍻 Easy sell-in to bars, as it helps their bottom line

• 👨‍🍳 Product tastes like the real thing

• 🍾 Smart, effective marketing strategy

If you'd like to join me in becoming an investor in Kamoti - check out their fundraising page below. Cheers!