BobaGate: Culture Appropriation or Culture Inspiration?

Shared Journey with iFly.vc

Oct 24, 2024

In a recent episode of Dragons’ Den, the Canadian equivalent of Shark Tank, actor Simu Liu, best known for his role in Marvel’s Shang-Chi, expressed frustration with a CPG startup that sells boba tea and claims other boba drinks are inferior. This moment has sparked heated discussions on social media, with accusations of cultural appropriation and misrepresentation at the center of the discussion. (Watch the entire episode here - Dragons' Den, Simu Liu's Reaction, along with the comments by our friend Dave Lu.)

I want to commend Simu Liu for his willingness to speak up on behalf of the Asian community. His voice and platform help shine a spotlight on important cultural conversations that need to be had, especially at a time when the power of cultural identity is becoming increasingly recognized in business and beyond. My number of social media followers doesn’t come anywhere close to Simu’s. Still, I want to share my voice, never give up an opportunity to speak up, and turn each dialogue into a potential opportunity for collaboration and partnership.

This ties into a broader trend I have observed - American consumer products and services increasingly inspired by Asian cultures.

Asian culture-inspired products and services have gained popularity among American consumers

In the past decade, I have been very excited by the aspirations of American founders introducing culturally inspired products and experiences to American consumers. Many of these founders, often drawing from their Asian heritage, are creating innovative products that resonate across cultures, and this trend is incredibly inspiring. Beyond boba tea or bubble tea, the American food and beverage scene has welcomed Xiaolongbao, ramen, poke bowls, sushi burritos, matcha-flavored snacks, lattes and desserts, dim sum, kombucha, hot sauce, and more.

At iFly.vc, we are proud to have invested in Weee! (the largest online Asian grocery in North America), Ume Tea (a popular bubble tea chain for American Gen Z, 20 stores and growing), and Eaping (a new Asian-fusion restaurant concept currently in development), among others. We are passionate about supporting innovative ventures in the food and beverage space, particularly those celebrating cultural roots and enhancing the consumer experience.

I would not invest in the BobaGate start-up because ….

In the Dragons’ Den show, the Canadian boba tea start-up founders referred to other products as “never quite sure about its content” and claimed they had “transformed this beloved beverage into a convenient, healthier, ready-to-drink experience,” using “three simple ingredients”: high-quality tea, fruit juice and popping boba.

I don’t feel offended by the Canadian boba tea founders for not referring to the Asian origins on its label. Similarly, I wouldn’t expect every bakery shop that sells croissants to link their roots to Austrian kipferl. (It is Austrian, not French. I didn’t know this till I looked it up on Wikipedia - “The modern croissant was developed in the early 20th century when French bakers replaced the brioche dough of the kipferl with a yeast-leavened laminated dough.”).

However, claiming other products are inferior doesn’t align with reality. In fact, “high-quality tea”, “fruit juice” and “popping boba” have become common ingredients among many bubble tea brands we have studied. Either the founders lack an understanding of the market and competition, or they don’t have a good argument for why their products are differentiated. It would be just as absurd for an American bakery to promote its croissants by suggesting those from France or Austria use inferior ingredients. In our newsletter on our investment in Ume Tea, we emphasized the importance of building a business holistically, focusing on key areas such as market positioning and branding, recipe development, supply chain management, and team development, in the very crowded market of bubble tea.

If the Canadian boba tea startup ever pitched to me, I wouldn’t be impressed by claims that they’re different simply because they use better or unique ingredients. Not only is this a false statement, but it also suggests they haven’t truly figured out their competitive moat. For that reason, I’d pass.

We are passionate about collaborating with founders to transform cultural insights into a competitive advantage, regardless of their cultural and ethnic backgrounds

For early-stage VC investors, the challenge - and the thrill - lies in identifying and seizing opportunities that others might overlook, i.e., the “non-obviousness”. I believe that investors with deep insights into culturally inspired innovation have a unique edge in sourcing the next unicorn.

In our own practice, we doubled down on Weee! in December 2018, even when other investors passed on that particular round. The company serves ethnic grocery online in the US, which is a tremendous market but quite underserved. Starting with deep insights into Asian Americans’ grocery needs, Weee! has built comprehensive in-house solutions for operations like merchandising, warehouse management, fulfillment, and delivery. As a result, the company has continued to grow without any COVID tailwinds while maintaining healthy unit economics and operations efficiencies.

We believe there will be even more start-ups that will scale and succeed like Weee! across North America. We’d love to connect with you - or anyone in your network - if you’re working on a culture-inspired startup.

Additional note

As mentioned in a recent post by our friend, Dave Lu, Whole Foods Market just announced their Top 10 Food Trend Predictions for 2025, which includes several great AAPI brands!