In this Draper University interview, CafeX co‑founder and CEO Henry Hu recounts how he financed his coffee‑robot startup from the ground up. He began by selling his college car and borrowing from friends and family in Hong Kong to build a prototype. Using advice from Jason Calacanis’s podcast, he cold‑emailed the investor with a YouTube demo, which led to a meeting, entry into Calacanis’s Launch Accelerator, and exposure at the Launch Festival where Chamath Palihapitiya (Social Capital) and Khosla Ventures saw the product and committed to the seed round (~$3.5 M). He later closed a Series A led by Kraft Ventures (David Sacks) and notes that total capital raised to date is about $14 M, with a Series B slated in 6‑8 months. Hu also reflects on why many investors initially said no, emphasizing the need for a working product, clear demo, and experienced hires to overcome hardware‑real‑estate‑regulatory hurdles. The conversation is framed as practical advice for Draper University entrepreneurs preparing to raise capital.
Chapters
Hey everyone, you're about to watch the founder of CafeX. His name is Henry Hu, and he's got an amazing story. If you want to be one of the entrepreneurs learning here at Draper University, just like the people you see in the audience, make sure you apply today at draperuniversity.com. Hope you enjoy the video. Back to when you started CafeX, you had your MVP. You try to pitch to investors, talk to us, who were the first investors you spoke to? Were they angels, VCs? That whole experience, 'cause a lot of the batch here will be raising money within the next 6 months to a year, and I think they would benefit a lot from knowing that experience from your end.
Yeah, so we initially just like, well first like I sold my car in college and had a little bit of money to to buy a coffee machine and a robot arm. And then we were able to get, like, a little bit of money from friends and family in Hong Kong. So we used that to, like, build our first prototype. When we actually, like, started to raise serious money, our first investor, professional investor, it was Jason Calacanis. So I know Jason Because I used to like, well, I still do, because I listen to his podcast. So other than Jason, I didn't know anyone.
How'd you reach out to him?
Yeah, so he actually has an episode that talks about how to reach out to investors.
You actually followed that and it worked?
Yes.
Good.
I was like, okay, just follow it. Obviously, in addition to following it, you actually need a working product or something that is well designed. And so in the email, I basically included a link to a YouTube video that showed our first prototype working in Hong Kong. And I got this quick response from him that was an automated response. It says, this email gets hundreds of emails a day. Don't expect a response. And then a few minutes later, a response comes, and it's like, is this a joke? I think he thought it was like an animation or something.
Wow.
Yeah. But I obviously explained to him it's not. And then met him in San Francisco, and then joined his incubator. And after we did the Launch Incubator— actually, now it's called Launch Accelerator. After we did that, we— he had a conference called Launch Festival. And Chamath from Social Capital was there speaking. And he got to try out the product because we had 2 machines there demoing. So basically, like, after the incubator, after the conference, Chamath is like, I want to invest. So he invested. And then, and then Khosla Ventures came in as well. So that was our seed round, which was around $3.5 million. And then other investors as well. And then a few months ago, we closed our Series A.
Oh.
And our new lead investor is Kraft Ventures. So David Sacks's new firm. Or it's not really new anymore, but So that was really nice. And David and Jason are now on our board. So to date, we've raised about $14 million. And we're going to do our Series A in like 6 to 8 months. I'm sorry, Series B, geez, in 6 to 8 months. Awesome.
Well, yeah, I would love to show you around. There's tons of venture funds here that we've talked about. And I think there might be some interest there. In terms of the people that said no, why were they saying no? How many people did you pitch to? What was the biggest, I guess, challenge there when they kept saying no? Why no, and then why yes?
I think the main reason for no is like we're not really a normal tech company. Like we have this giant machine that we build. There's hardware, which is like, boo. Real estate, basically dealing with the real world, so doing real estate deals, dealing with regulations. Boo. For VCs. So we basically check a lot of the boxes for things that VCs traditionally don't like. So that's a main reason for why it's difficult. I think 2 is like, So, you know, now I've kind of learned this, so we've been changing things around a bit, but initially I was just like very, I think maybe a little too scrappy. Like, I didn't think it was that important to try to hire experienced and expensive, but I think that's important. executives early on. It was just like, you know, we'll just get it done and hack it together and then prove something and raise money. And obviously that is not the case. So now we have a COO, Cynthia, who's just like amazing and has been extremely helpful. And then we also hired a director of hardware. who came from Tesla, actually. So basically we're just bringing in all these people with a lot of experience on the team. And that's not only improved the product a lot, but also helped us with raising money. What are some of the challenges you've faced in the past?
