Haus, a VC-backed apertif startup, is up for sale after Series A falls through – TechCrunch

Haus was launched in 2019 as a response to a generation’s craving for a more transparent alcohol brand, raising millions in venture funding from angels like Casey Neistat, Away co-founder Jen Rubio and funds including Homebrew, Haystack Ventures, Coatue, Shrug Capital and Worklife Ventures. Haus has raised $17 million in rolling SAFE notes to date.

Today CEO and co-founder Helena Price Hambrecht leveraged that same ethos of openness to announce that the startup’s Series A fell through and the company is about to shut down. In an interview with TechCrunch, Hambrecht talked about Haus’ transition from buzzy VC-backed startup to a business that’s currently up for sale, as is or in parts.

Haus sells a range of low ABV (alcohol by volume) citrus, spice and floral aperitifs, meant to be an alternative to hard liquor and slightly stronger than wine. Made in Sonoma, California, Haus also promised a product made from all-natural ingredients with a key differentiator: users could order it online and have Haus bottles delivered to their doorstep. A digital-friendly, healthier alternative to wine memberships set the company up to have a strong social presence.

Hambrecht, a Silicon Valley brand veteran, took over as sole CEO of the company in 2021 after her co-founder and former husband Woody split. This year, Haus shared that it has crossed the $10 million mark in revenue and recently announced that it would hit national distribution with Winebow, another milestone for the then-only direct-to-consumer business.

Still, as the pandemic spread around the world, the company went through a series of challenges, including supply chain issues, lack of word-of-mouth growth, and iOS changes.

“It was hard to build the business I wanted to build during the pandemic considering we were building a social product,” Hambrecht said. “We didn’t have people congregating, we didn’t have natural word of mouth. We were a purely digital growth brand at the time, great for acquisitions but not great for monitoring long-term behavior.”

The breakthrough came as Hambrecht struggled to raise venture capital funding, mainly, she says, because venture investors are unable to back alcohol companies because of vice clauses in their LP agreements. “The appetite for a round of alcohol is very different from software; with software it is 4-6 weeks, with alcohol it is months. I’ve learned over time that almost every process, from legal operations to fundraising, is 100 times more difficult with alcohol, Hambrecht told TechCrunch. Because the company was unable to raise money from traditional VCs, it took on debt financing and began looking for private equity and strategic partners.

Enter Constellation Brands, producer and marketer of beer brands such as Corona Light, Modelo Especial and Pacifico. In 2018, the beverage company’s venture arm committed $100 million to invest in women-led startups. Constellation’s dedicated fund stood out to Hambrecht because, along with the Winebow deal, it would help expand the brand’s distribution.

Hambrecht says Constellation committed to leading the startup’s $10 million Series A, even offering to advance the seed money when the runway started to sink. Then, at the last minute, Constellation pulled out of the deal for no specific reason other than “timing,” she says. TechCrunch reached out to a Constellation spokesperson for further comment, but did not immediately hear back.

“Here’s a Haus update that’s not fun to share,” Hambrecht said on Twitter Monday morning. “Our lead investor recently declined to move forward with the Series A that we were closing. Without them, we do not have the money to support continued operations at this time.” Now, Haus only has one month to sell and ship products. New products are no longer being produced, but it could start again, it says. “We were just starting to see the collection coming back, and I was looking forward to the new the chapter.”

The co-founder said “there’s no villain” in the shutdown story, but Constellation’s defection shows another example of how difficult it is to be a venture-backed, direct-to-consumer company. When Haus announced its $4.5 million seed round, Hambrecht described the company as “Glossier for Alcohol”; fast forward, and Glossier has also had its share of struggles.

Despite the current situation, the co-founder does not believe that going the venture route was a mistake. “I’m grateful for the funding we had and what we were able to do with it. You’re building the company you want to see in the world, and you know it’s going to cost a little more up front.” Instead, she says, if she were to focus on becoming a more self-sustaining startup — or running the operation out of cash flow — she would having had to make that decision a year ago.

As a result of the failed Series A deal, Haus is currently for sale via an ABC process, or an assignment in favor of creditors that is a voluntary alternative to filing a formal bankruptcy petition. At its peak last year, Haus had 30 employees; now only four work with Hambrecht, all as contractors for the firm.

“It is always dangerous to have little money. We got there, and it’s unfortunate, but I know there are many companies in this position right now, says Hambrecht. “I have been sharing my work online for over 20 years now. It’s definitely something in my DNA. If sharing this process is helpful to another founder in a difficult situation and considering their options, then it makes it all a little more worthwhile.”

As for what’s next for the entrepreneur, a Silicon Valley branding veteran, there are no immediate plans to jump into a new startup.

“My goal, right now, is to be as helpful as I can to get this ABC process to the best possible outcome. After that, I’m going to spend some time processing the last four years; it’s been so extraordinary , as well as brutal and traumatic; I will rest and process it.”

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