I was talking to a Chicago VC a couple months ago about a handful of Chicago startups, and I asked him if his firm invested in Tovala, a local startup that's built a "smart oven" and an accompanying food delivery service. He said they hadn't, giving one main reason for passing: Juicero.
The VC thought Tovala had hints of the failed juicer startup that shut down in spectacular fashion this year after a scathing review in April from Bloomberg. Juicero's juice packs could be squeezed by hand, Bloomberg found, and didn't need the startup's $400 tech-powered juice machine.
The negative press was followed by more negative press and harsh criticism on social media. Juicero, which had raised $120 million in venture funding, offered full refunds to customers, considered lowering its price, and ultimately shut down in September. It was a story of Silicon Valley excess mixed with tech's affinity for tackling problems that don't really exist. The startup died faster than it took to finish a Carrot Beet juice drink.
Tovala, a countertop oven that uses a combination of steam, baking and broiling to cook food, was founded in 2015 and launched publicly in July of this year, right in the middle of the Juicero hysteria. The startup got some national media attention, inducing a video demo from Business Insider that garnered more than 300 comments on Twitter, many of which were critical of Tovala's $400 price tag. The Juicero comparisons began popping up online.
"That was the one article where there were a lot of folks on the internet commenting and drawing the comparison (to Juicero)," Tovala CEO and Co-Founder David Rabie said. "In general, we don’t get it as often as we might have expected."
Rabie doesn't believe Tovala is headed down the same path as Juicero, for a few reasons. One: The company is solving a bigger problem (more people want convenient dinner options than fruit juice). Two: Tovala isn't a closed system like Juicero or Keurig. Tovala offers ready-to-cook meals, but users can also cook meals that aren't delivered by Tovala. And three: Tovala isn't propped up by over $100 million in venture capital (it's raised just over $2 million in funding).
"Our story is obviously very different (than Juicero)," he said. "We’re born in the Midwest. We haven't raised a ton of money. We’ve done this in a very scrappy way."
Nevertheless, Tovala got a glimpse of what it was like to be Juicero for a day, at least in terms of harsh criticism on social media. And even if Twitter snark was the nail in Juicero's coffin, online comments aren't really what ultimately did Juicero in, Rabie said. It was its business model.
"Consumer reaction was definitely the thing that tipped them over the edge. But their business model was also flawed," he said. "If their business was making tons of money, they would have withstood the storm and kept operating."
Profitability is in Tovala's roadmap, Rabie said, though he declined to say exactly when that will be.
The startup also plans to roll out a leasing plan, so customers don't have to shell out the full $400 up front to own the device. Tovala also offers a 180 day no-questions-asked return policy if customers aren't happy, Rabie added.
Tovala's ultimate success will depend on many factors, but two important ones are taste and price. I've tried the startup's salmon dish and can say that it's very good. CNET gave the device a 3.5/5 star rating, and called Tovala's meals "delicious." The Wall Street Journal said Tovala "turns out superfast, consistent restaurant-quality meals, making it the first connected kitchen device with real mass appeal." It got high marks from the Washington Post.
The price is a different conversation. A $400 internet-connected oven won't be for everyone. But Rabie said it has an advantage over competitors like Blue Apron, calling Tovala's customers "sticky." People who pay $400 for a device are likely to keep using it again and again. Blue Apron, on the other hand, is having trouble holding on to existing users.
It's too early to tell if Tovala will be the next big kitchen tech device. But, at least for now, it doesn't appear like Tovala is following in Juicero's footsteps.
