The Quiet Beverage Bet Outpaci... Note
Collab Fund

The Quiet Beverage Bet Outpacing AI Hype: How OLIPOP’s Investors Are Winning

A soda company called OLIPOP, founded in Oakland, California, is on track to reach $500M in sales in 2024, up from $200M in 2023 and $70M in 2022. Despite being a relatively unknown company, OLIPOP's returns are outperforming those of OpenAI, a highly influential AI company. OpenAI's early investors are expected to see a 189x return on their investment, while OLIPOP's early investors are expected to see a 256x return. OpenAI's returns are capped at 100x, but this cap may be removed as the company transitions to a for-profit public benefit corporation. OLIPOP's valuation is estimated to be $5B, with seed investors holding a 13% stake worth $639M. OpenAI's unit economics are challenging, with high inference compute costs and a large base of free-tier users, leading to projected losses of $44B from 2023 to 2028. In contrast, OLIPOP has straightforward unit economics and is already fully profitable, with a more flexible path to exit. The comparison between OpenAI and OLIPOP highlights the importance of entry price, timing, and unit economics in achieving high returns. The article concludes that exceptional returns can come from unexpected places, and investors should be open to recognizing opportunities in less flashy businesses.
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