Drink-a-day startup Hooch announced today that it has raised $5 million in seed funding. The news comes as the company prepares to launch a blockchain-powered cryptocurrency called TAP Coin.
Hooch offers a drink-a-day basic subscription service priced at $9.99 per month. Your subscription gets you one free drink per day at partner bars across your city. The service first launched in Los Angeles in 2016 but has now spread across the United States.
More recently, Hooch announced the launch of Hooch Black. Unlike Hooch’s standard subscription, which can be purchased directly through the app in minutes, Hooch Black requires you to complete a formal application. The price also increases to $295 per year, but adds hotel deals, concierge service, and other perks on top.
Hooch has previously raised $2.75 million in two pre-seed rounds, according to TechCrunch. This latest $5 million seed funding round was led by Revelis Capital Group and Blue Scorpion Investments with participation from Access Industries Holdings, Warner Music Group, FJ Labs, and others, according to co-founder and CEO Lin Dai.
How Does Hooch Make Money?
In terms of future funding, Hooch might explore the possibility of raising a “proper” Series A in 12 to 18 months, although Hooch expects to reach profitability before then.
How can a company be profitable when it’s giving away one drink a day for $10 per month? Well, Hooch functions like a promotional service for bars and restaurants. Studies have shown that people rarely visit a bar just for one free drink. One study found Hooch subscribers spend approximately $100 to $150 per month at partner establishments.
How Does Hooch Plan to Integrate Blockchain?
The reason we’re talking about Hooch on a cryptocurrency news website is because the company has announced plans to integrate blockchain technology.
Hooch will launch a blockchain initiative this summer. The blockchain initiative, initially, was a total mystery: the company was hesitant to explain how it planned to use blockchain to optimize its drink-a-day subscription service.
In May 2018, however, Hooch revealed that its blockchain-based cryptocurrency will be called TAP Coin. That currency will be used as part of a loyalty program to encourage customer data sharing.
How Does TAP Coin Work?
Hooch recently introduced plans to launch its own digital currency. As many people suspected, it’s a token that can be used at partner restaurants, bars, and nightclubs within the Hooch network.
A whitepaper for TAP Coin is available online at TAPCoin.net. Here’s how the company explains it:
“TAP is a new digital token from HOOCH that takes nightlife and hospitality to the next level. HOOCH members can now pay for hospitality purchases in tokens, buy drinks for friends all over the world, and gain access to priceless VIP experiences.”
Some of the core functions of TAP Coin include:
- Earn TAP Coin for hospitality purchases on your credit card
- Redeem TAP Coins for food, drinks, and hotel rewards
- Gift drinks using TAP Coin to anyone anywhere in the world
- Use TAP Coins to get into VIP events and “priceless celebrity experiences”
How do you earn TAP Coin? Well, certain venues can join the TAP Network and become a TAP Partner Venue. These venues are essentially paying to access a consumer’s purchase history. A consumer who chooses to share their purchase history with venues will receive TAP Coins as a reward:
“Consumers purchase histories provide valuable insight for brands. Data is encrypted and only consumers themselves hold the access key and can opt-in to grant specific brands access via Smart Contract and receive TAP COIN in return directly from brands.”
Hooch’s TAP Coin cryptocurrency could be revolutionary for the daily drinkers and deal-seekers in the world today. Stay tuned for more information as Hooch rolls TAP Coin across its partner network. For more reading, check out what happened at Consensus 2018: