Tesla Backer Bets on Craft-Coffee Trend Luring Hipster Consumers

(Bloomberg) -- As hipster consumers turn to more artisan cups of coffee, at least one trendy investor is taking notice.

DBL Partners, which made early investments in companies such as Elon Musk’s Tesla Inc., has backed Bellwether Coffee in a $40 million capital raise. The Berkeley, California-based startup makes machines the size of a standard fridge that allow shop owners to roast coffee in store. It’s part of a trend that spilled over from the craft beer industry.

The in-store roasting shift allows customers to get more tailor-made drinks and know where their beans came from. Bellwether machines also allow sustainable-minded customers to tip the farmers directly and reduce greenhouse gas emissions by 90% versus traditional gas-powered alternatives.

“The coffee industry has a difficult carbon footprint and yet enjoys passionate support from its customers,” said Nancy Pfund, co-founder and managing partner at Francisco-based DBL Partners. “Cracking the climate code will therefore result in a whole new way of thinking about the industry, its future structure and growth.”

Last month, the startup closed a $40 million Series B financing round, with just under $14 million coming from DBL. Bellwether, which raised $10 million last year, plans to use the proceeds to scale up operations to meet demand both in the U.S. and overseas. The company will soon have 100 roasters installed in the U.S. and has orders for another 150.

Other investors participating in the funding include FusionX, Congruent Ventures, Coffee Bell, Tandem Capital, Spindrift Equities, XN Ventures, Balius Partners and Hardware Club, the company said.

--With assistance from Brian Eckhouse and Patrick McKiernan.

To contact the reporters on this story: Marvin G. Perez in New York at mperez71@bloomberg.net;Isis Almeida in Chicago at ialmeida3@bloomberg.net

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Millie Munshi

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