Sunnyside, an S.F.-based startup that operates a service to get people to moderate their drinking, raised $11.5 million in a Series A round led by Motley Fool Ventures with participation from Will Ventures.
Additional investors included Uncork Capital, Offline Ventures, Joyance Partners, Wisdom Ventures, Eudemian Ventures, Adjacent, Scribble Ventures, Cooley LLP, and Michael Lee, founder of MyFitnessPal.
The company also announced the hiring of Steve Lloyd as its chief product and technology officer. Lloyd previously served as CTO another S.F. startup, health and fitness app Strava.
Sunnyside CEO Nick Allen said the funding was secured based on a combination of the firm's fundamentals, its ability to lean into AI and rising trends related to cutting back alcohol consumption among consumers. He says the company has grown its paid subscriber base by 3 times in the past year.
"We had the cards stacked up against us, for sure, coming into the fundraise, given the state of the market and the SVB crash that happened right as we were getting started in the process," he said. "But we're seeing what we believe is the largest shift in consumer behavior around alcohol in a generation, and that's really bolstering our differentiated approach to helping people build a healthier relationship with alcohol."
The service costs $99 a year and works by allowing users to set weekly drinking targets and then receive daily SMS messages to encourage users to stick with their goals. The messages are sent by AI chatbots that are supervised by a team of health coaches.
Allen says the company was able to capitalize on the rise of generative AI and large language models and integrate the technology into its service. Sunnyside uses OpenAI language models and then trains them with its proprietary data focused on drinking and health.
But don't call the company a "GPT wrapper," Allen says, referring to the pejorative term for startups that build their entire company around OpenAI's GPT technology or other company's foundational AI models.
"It's more profound for companies that are getting started with their whole product being built on top of generative AI," he said. "For us, the coaching from generative AI is one part of a larger product experience and so we don't fall into the risk category of being just an AI wrapper."
Sunnyside was founded in 2019 by Allen and Ian Andersen, its chief growth officer. It has 14 employees, two of whom were just hired after the funding was secured.
The company was one of Bay Area Inno's Startups to Watch of 2023.
