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How this S’porean built a S$35 million coffee tech company thanks to his robot barista

keith tan crown coffee crown digital

After completing his studies in the United Kingdom, Keith Tan went to work across various industries such as property and wealth management.

The former wealth manager then decided to take on a completely different path and jumped into the world of F&B.

In 2015, he opened the first Crown Coffee cafe at CT Hub 2, offering Buscaglione coffee alongside panini sandwiches.

“Crown Coffee was one of the earliest adopters of fully automated coffee production, and the brand soon evolved into a smart cafe in 2017,” said the founder.

“However, just as I was planning to open more Crown Coffee outlets, we ran into challenges like manpower shortages and high overhead costs (like) labour and rental. The resulting low profit margin made it hard for us to get ahead.”

This made him realise the need for automation in order for F&B businesses to scale up.

Noting this “white space market opportunity”, he put together a team of technologists, baristas and coffee lovers to explore how robotics and zero-touch technology can be integrated to help brew a consistent cup of coffee.

This was what led to the establishment of Crown Digital, a smart Internet of Things (IoT) startup that addresses problems faced in the F&B industry.

Developing Singapore’s first robot barista

“I started Crown Digital with a renewed focus to digitalise and empower traditional businesses, while putting a great cup of coffee in every hand, quickly and efficiently,” said Keith.

In line with this vision, they developed ELLA, Singapore’s first robot barista and the world’s first successful robot barista.

ella robot barista crown coffee singapore
ELLA, Singapore’s first robotic barista / Image Credit: Crown Digital

Our creation, ELLA, humanised technology and demonstrated the potential of robotics and artificial intelligence to reinvent the commuter lifestyle experience and reenergise urban retail.

(It) proved that technology could reinvent user experience in a truly unprecedented way. There is a serious manpower problem in ageing, developed cities such as Tokyo and Singapore. Crown Digital uses robotics and automation to take on repetitive tasks (so humans can) focus on (other tasks like improving) the customer experience or innovating new products.

– Keith Tan, CEO of Crown Digital

Recalling the early days of starting up Crown Digital, Keith said that it would not be made possible without the help of his business partners and good friends, who helped conceptualise the very first iteration of ELLA.

“Intel’s office was close to Crown Coffee at CT Hub 2, and their team often came (down) to have lunch at the cafe. One day, after realising the need for automation, I walked up to them and told them that I had an idea to automate coffee service,” recounted Keith.

“I was introduced to their team and their solutions. Today, we are Intel’s Market Ready Solutions Partner and are powered by Intel’s architecture.”

ELLA was first conceptualised and designed in 2018.

The following year, ELLA attended more than 400 trade events, serving an average of 800 cups per day. People loved the idea of a robot barista and they received very encouraging feedback about the coffee quality.

It was only in October 2020 that ELLA was officially launched to the public, where Minister Low Yen Ling of the Ministry of Trade and Industry graced the event as the Guest of Honour.

ELLA at Plaza Singapura / Image Credit: Crown Digital

In all, it took a total of three years from proof of concept to the current ELLA iteration that is now ready to be brought to market. In January 2021, ELLA was launched at Plaza Singapura.

Their robot barista will soon be a common sight at train stations

When Keith attended an annual trade show called Combined Exhibition of Advanced Technologies (CEATEC) in Tokyo, Japan, he had pitched the robot barista idea onstage.

We showcased the many benefits of having ELLA at public transport locations. In addition to resolving issues such as eliminating labour shortages and improving the profitability structure of cafes due to a decline in users and turnover rates, ELLA also meets customers’ growing needs due to the Covid-19 crisis, namely contactless solutions.

– Keith Tan, CEO of Crown Digital

He was later approached by Japan External Trade Organization (JETRO), which led to an eventual partnership with East Japan Railway Company (JR East) in January 2021. This brought the company to an initial valuation of S$33 million, though it is now valued at S$35 million.

JR East wanted to evolve the coffee they provide their commuters in Ekinaka (in-station) to make it more enjoyable and convenient. They saw ELLA as the innovation that would improve the overall service level and help them actualise their vision of the ‘Beyond Stations Concept’.

Most recently, Crown Digital also inked a partnership with Stellar Lifestyle (formerly called SMRT Commercial) to deploy ELLA at 30 MRT stations by end 2022.

It will be deployed at retail spaces of MRT stations to enhance the commuter experience, allowing them to pre-order and pick up freshly brewed coffee from ELLA.

“Time-starved commuters can soon have easy access to high-quality coffee on the way out from the train station. … (This would) work amazingly well in Singapore’s busy MRT system,” quipped Keith.

ella robot barista crown coffee singapore
Commuters can pre-order their coffee through the ELLA app / Image Credit: Crown Digital

Coffee orders can be placed in advance through the ELLA app, which will be sent to the cloud. ELLA would then spring into action to prepare it, and a notification will be sent to commuters to collect their drinks upon arrival at the destination MRT station.

WIth a retail footprint of less than five square metres, ELLA has a safe, cashless and contactless interface and can serve up to 200 cups of gourmet coffee per hour.

Consumers can scan their unique QR code sent to their app to collect their coffee via a designated “pigeonhole” at the kiosk that swivels 180 degrees to open for collection, resulting in minimal touch points.

Explaining how they came about securing this partnership, Keith said that they had always wanted to deploy ELLA at MRT stations in Singapore, and saw an opportunity to improve commuters’ lifestyles by bringing forth a contactless future for F&B.

“Both companies were aligned on the plan to enhance commuters’ lifestyle experiences through innovation and technology in public transport network spaces and beyond. Stellar Lifestyle saw the opportunity in having ELLA in more train stations to enhance the lifestyle of their commuters; hence they decided to invest in us and became one of our strategic partners.”

He added that this strategic investment validates their larger business vision to bring high-quality coffee to Singaporeans on the go. Furthermore, Crown Digital now has a target addressable market of 1.4 million riders daily in Singapore.

The company has since scored an investment from JR East Business Development SEA (a Singapore entity of East Japan Railway Company) in December 2020, and an additional investment from Stellar Lifestyle in June 2021.

To date, Crown Digital has raised S$6 million, and are looking to start Series A funding in the first quarter of 2022.

2021 has been a good year despite Covid-19

Recounting his business journey so far, Keith described the pivot from a cafe to a tech company as a “huge step”.

They had to rethink their business model, as well as think of ways to increase cashflow to keep the business alive so they can achieve their mission of automating the F&B retail space.

We are a full-stack startup, which means we have to design, build the hardware and software, and develop a successful business model — (these were) challenging tasks for a bootstrapped startup during our (early) days.

We had to get everything done with minimal resources. Our biggest challenge was convincing investors that automation and AI in the F&B retail space is the future. In order to overcome these challenges, it took a lot of grit, hard work and belief in our offering.

– Keith Tan, CEO of Crown Digital

While many other businesses suffered due to the Covid-19 pandemic, it actually provided a business opportunity for Crown Technologies as contactless solutions become more crucial than ever in the F&B retail space.

ella robot barista crown coffee singapore
ELLA’s robotic arm / Image Credit: Crown Digital

“As companies are striving to adapt to new forms of contactless solutions, it has made ELLA an attractive investment for companies to have an intelligent, automated solution in their office, restaurant or other retail space due to its contactless interface,” said Keith.

So far, they have received great interest from corporate clients to have ELLA deployed in offices.

In fact, Keith feels that 2021 has served to be a good year for them, especially since they secured key partnerships and investments with East Japan Railway Company and Stellar Lifestyle, which boosted their growth.

Later in December, it will commence on its test marketing in Tokyo and launch the first ELLA kiosk at an MRT.

WIth a proven solution and ecosystem that is more relevant than ever in today’s post-Covid world, Kevin is confident that Crown Digital is poised for expansion.

“As ELLA deploys across major Asian transit hubs, Crown Digital now brings its expertise and insights to find new ways to ensure that robotics create value for everyone and help build a more equitable society.”

“Crown Digital’s core capabilities are human-robot interaction. This enables us to extend our solution beyond coffee into other areas of food and retail, and the betterment of humanity. The future is exciting, and we are just getting started.”

Looking for delicious treats as well as some premium coffee to indulge in? Shop our F&B brands on VP Label now:

Featured Image Credit: Crown Digital

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