Howard Schultz is returning to his coffee roots with an investment in Cumulus Coffee, a New York City startup that plans to sell machines for making cold brew at home.
The company said Thursday it has raised $20.3 million in seed funding from investors, who also include Valor Equity Partners, venture-capital firm Maveron, Linden Ventures, pop rock band OneRepublic, and Carter Reum, an author, entrepreneur and venture capitalist who is married to socialite Paris Hilton.
Schultz was chief executive of Starbucks Inc.
SBUX,
from 1986 to 2000 and again from 2008 to 2017, and he served as interim CEO of the company from 2022 to September 2023. He is currently chair emeritus of the coffee chain.
Cumulus did not disclose how much Schultz is investing.
The company is making a bet on the demand for cold brew-coffee.
“Coffee has experienced a significant shift over the past few years as consumers have overwhelmingly switched to cold versus hot coffee,” Schultz said in a statement. “Cumulus’ opportunity to bring premium cold coffee beverages to the home is simply enormous and will raise the bar for cold brew coffee everywhere.”
See: Starbucks’ stock soars 10% after earnings crush estimates as U.S. consumers opt for pricier drinks
Mesh Gelman, founder and CEO of Cumulus, worked in senior roles at Starbucks for more than six years. Gelman says the cold-coffee market is “enormous,” with about 75% of American coffee drinkers now preferring cold over hot beverages.
The company’s compact machine uses recyclable aluminum capsules to make a 10-ounce cold brew, a nitro cold brew and a cold-pressed espresso in under 45 seconds at the push of a button.
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