Terra Kaffe is a company transforming the in-home coffee experience, starting with a new coffee machine. Pulse 2.0 interviewed Terra Kaffe CEO Sahand Dilmaghani to learn more about the company.
Sahand Dilmaghani’s Background
Dilmaghani is the son of two architects who studied finance, IT, and Chinese at the University of Virginia and received an MBA from INSEAD. And Dilmaghani said:
“Before Terra Kaffe, I was the Head of Corporate Development at Unu, a German mobility startup. Prior to that, I worked in investment banking for a middle-market firm focusing on M&A and private placement work for tech-enabled businesses.”
Formation Of Terra Kaffe
How did the idea for the company come together? Dilmaghani shared:
“In a way, I credit the idea to my parents. They absolutely love coffee and have every gadget under the sun, but they didn’t have an automatic machine, like our TK-01 and TK-02. I walked into various retailers and saw a pretty wide spectrum of options; on one end, cheap single-serve pod machines.”
“One the other, exorbitantly priced, clunky devices with technology that hadn’t been refreshed in over a decade. There was nothing that was both reasonably priced and packed with useful, seamless tech. Terra Kaffe was the result of filling that gap.”
Favorite Memory
What has been your favorite memory working for the company so far? Dilmaghani reflected:
“Without even giving it much thought, the obvious answer would be seeing initial customer feedback after we began shipping our first machine, TK-01, about 5 years ago. Our customers’ reactions to taking it out of the box and brewing their first shot were truly priceless, and it makes all the hard work worthwhile.”
Core Products
What are the company’s core products and features? Dilmaghani explained:
“TK-01 is our flagship super automatic. It’s a best-in-class espresso machine that makes the core café menu — single/double shots, Americanos, cappuccinos, and lattes. I like to think of it as the OG do-it-all espresso maker.”
“TK-02 is our brand-new connected super automatic machine. We took feedback directly from our TK-01 customers to build a machine that had everything coffee lovers wanted and nothing they didn’t. Besides being the first superauto to deliver both true drip coffee AND espresso (thanks to its hybrid brewer), TK-02 is also prized for its smart technology. When used alongside the TK app, users can build custom recipes, dial in their espresso extraction to an unprecedented detail, and even set automatic brewing schedules (to enjoy coffee from bed or wherever else in the home).”
Challenges Faced
What challenges has Dilmaghani faced in building the company, Dilmaghani acknowledged:
“Ask anybody working in a startup, and they’ll tell you that scaling a hardware product and fundraising right now is harder than it’s ever been. I’m constantly impressed with our team’s ability to be lean, scrappy, and any other adjective to describe how much we do with limited resources. To be able to push TK-02 over the finish line (we started delivering machines to pre-order customers in December) amidst that climate is nothing short of amazing. I attribute it all to having a team of truly committed and impassioned coffee lovers. Everyone who works at Terra Kaffe genuinely loves what they do – greatness achieved in the agency of others.”
Evolution Of Terra Kaffe’s Technology
How has the company’s technology evolved since launching? Dilmaghani noted:
“It’s day and night. TK-01 was (and still is) a technologically advanced machine, but TK-02 has patented innovation, unique build-quality, and unprecendented ease-of-use you won’t see anywhere else. Not to mention, our proprietary cloud architecture allows us to keep the machine future-proof. Meaning TK-02 devices can be updated over Wi-Fi, with feature enhancements that adapt to the end user.”
Significant Milestones
What have been some of the company’s most significant milestones? Dilmaghani cited:
“Not a milestone per se (since it’s been true since day one), but the fact that we have the best customer experience team in the category is a specific point of pride. Our Coffee Concierge team is based in Brooklyn and helps all our customers (and prospective customers) with all their coffee, hardware, and software questions like no one else can. No other coffee machine company can hold a candle to our customer team.”
“As far as specific milestones go, launching TK-02 is an obvious one. We spent 3+ years on R&D to create the most game-changing machine in the space, and initial reviews are overwhelmingly positive. I mentioned one of my favorite memories (over five years ago now) was hearing from customers on TK-01. Waiting so long for a similar feedback experience on TK-02 is a milestone in and of itself. Our customer’s expectations are so much higher now, but even so, we’re still continually impressing coffee lovers across the country with our products.”
Customer Success Stories
After asking Dilmaghani about customer success stories, he highlighted:
“Hard to decide! Some of my favorites are (i) the customer who said if their house caught fire, they would grab their TK-02 and run; (ii) in the early days of the company, some of the first customers and early adopters of the TK-01 machine were very special – I got to spend a lot of time with them. Lots of heartwarming stories of new parents with busy schedules, large Italian-American households, coffee lovers looking to graduate from their pod-based machines, etc., that were all eagerly awaiting their new TK machine; and (iii) not exactly customers, but when we donated machines to hospitals’ internal medicine and ER departments during the peak COVID-19 spike.”
Funding
After asking Dilmaghani about the company’s funding information, he revealed:
“To date, we’ve raised just under $20 million in funding.”
Total Addressable Market
What total addressable market (TAM) size is the company pursuing? Dilmaghani assessed:
“I’m sure it will come to no one’s surprise that coffee is an incredibly large market. As one of the largest commodities traded globally and a consumable that is enjoyed by the majority of the world on a daily basis, the coffee market and the smart appliances market contribute to a total addressable market in excess of $100 billion.”
Differentiation From The Competition
What differentiates the company from its competition? Dilmaghani affirmed:
“For starters, we’re an exceptional value for money. Even with TK-02, we’re still more than half the price of our closest competitor, whose feature set falls far short of TK-02’s. On top of that, we’re primed to continue innovating. Even since my original competitor shopping led to the founding of Terra Kaffe, legacy players are still stuck in neutral. There has been virtually no new technology developed by all other major coffee machine firms. Simply put, our product is a masterpiece of design, quality, and technology, surpassing anything else on the market today.”
“Finally (and I’ll say it again), our team is bar none. We have some of the most talented, experienced, and thoughtful people on Team TK.”
Future Company Goals
What are some of the company’s future company goals? Dilmaghani concluded:
“Our north star will always be finding new ways to improve the coffee experience, be it through sustainability, quality, or ease of use for our customers, and achieve excellence in design. As tastes develop and change, we’ll be moving in tandem to meet every current demand and every future need.”
