- Zucca—a Seattle-based startup with a generative AI platform to help CPG firms streamline the product development process—has emerged from stealth with a $5 million seed round led by Acre Venture Partners.
- Other investors include PSL Ventures, AIStudio Fund (funded by Mayfield), and Sugar Mountain Capital.
Incubated in startup studio Pioneer Square Labs (PSL), Zucca targets mid-market and smaller venture-backed CPG companies that are open to experimenting with new ways of doing things but do not have the resources to develop in-house solutions, cofounder Jesse Guzman told AgFunderNews.
“When it comes to AI, there is a lot of appetite and eagerness with these companies, but at the same time, we don’t see too many homegrown solutions at this stage,” added Guzman, who was most recently a principal at PSL with stints at Rain, NerdWallet, and Prophet on his resume.
“At PSL, we were searching for large markets with complex workflows and challenges where Gen AI could potentially rewrite how things are done.”
Karen Huh (previously at Oobli, Bulletproof, and Starbucks) has joined as CEO to engage with CPG companies who are looking for ways to speed things up and de-risk the NPD process without cutting corners.
From a linear to parallel NPD process
While there are now several AI platforms helping CPG giants trawl through billions of data points on social media, restaurant menus and other online sources to identify new trends and develop new product concepts, Zucca is focused on the end-to-end product development process, from ideation to formulation to sourcing, explained Guzman.
Rather than working on these things in a linear fashion, Zucca can help firms work on them in parallel “making the entire process faster and smarter” via a centralized workspace with checks built in to ensure things don’t slip through the cracks, he added.
“Users can define the parameters at the onset and quickly develop a comprehensive set of requirements covering everything from regulatory compliance to sensory requirements, economic constraints, brand guidelines, and so on.
“We start with concept development. We help you scope. We help you formulate and generate Nutrition Facts labels. We help you run the economics. We help you think through your manufacturing costs.”
While some of this will be from interrogating companies’ internal data, for example spreadsheets, PDFs and google docs containing information on suppliers or ingredient specs, Zucca can also pull in external data, he said.
Right now, Zucca has a team of five working with about a dozen partners that are beta testing the product and providing feedback, said Guzman. It’s early days, but they are particularly appreciative of Zucca’s ability to “document concepts in details, which is important, but often gets pushed down to the bottom of the priority list,” he said.
“They also appreciate that the economics are updated with every change, allowing them to rapidly model out simple scenarios.”
The business model
As for the business model, “We look like a classic tiered SaaS company, and so we are charging by the seat,” said Guzman. “So right now there are a couple different types of seats. There are editor access seats where you have full control, and those cost more, and then there are viewer seats. We’re also exploring offerings that would be priced on a per job basis.”
When it comes to getting its foot through the door with potential customers, Zucca targets people with a range of job titles, he said. “The unifying thing about the people we need to speak to is that they think about product development holistically. So it could be a director of product development, a commercialization director, a brand leader or innovation leader, or a head of R&D.”
Asked about data privacy, he said, “We take it very seriously because we know that data is the literal and figurative secret sauce of our customers. We’re not using any of their data to train our models, or anyone else’s models.”
Acre Venture Partners: ‘Zucca’s tech will become ‘core to commercialization efforts’
Lucas Mann, managing partner at lead investor Acre Venture Partners, told us: “Although an obvious thing to say, speed is such a crucial component to an early-stage AI company working to solve problems in an entrenched industry.
“We were quickly able to get confidence in this combination of Zucca leadership, PSL’s institutional capability and our own network in food and beverage.”
Zucca’s architecture is “unique and quite advanced,” he added. “And while large CPGs may be able to build a product internally, it’s unlikely they would be able to access the level of engineering talent that brought this platform together so quickly… the same talent that will continue to develop the product with their CPG partners.”
Zucca’s tech will become “core to commercialization efforts, not unlike ERP systems or other partner-developed technology that CPG companies use every day to operate and optimize their businesses,” he predicted.
For small and mid-size CPGs, Zucca can accelerate innovation at low cost, while for larger companies, it can foster both rapid innovation and improved collaboration and development across teams, departments and geographies, he claimed. “We found Zucca to be uniquely capable in this offering.”
‘Really quite powerful’ early customer feedback
What sealed the deal, however, was early feedback from potential customers, he said. “As we were getting to know the company, we brought them to potential customers of various sizes – people we have known for many years, and the unique capabilities and future potential of a Zucca partnership quickly became very clear.
“In fact, those meetings were really quite powerful. Watching them happen we were able to see folks recognize the incredible capability of the platform, even at this early stage.”
The post Acre Venture Partners bets on GenAI for NPD with Zucca investment: Tech will become ‘core to commercialization’ in CPG appeared first on AgFunderNews.
