INSUBCONTINENT EXCLUSIVE:
Joanna Glasner
Contributor
More posts by this contributor
VCs serve up a large helping of cash to
startups disrupting food
US startups off to a strong MA run in 2018
These days, it seems like everyone with extra cash has
some kind of pricey drinking habit
It might be fine wine, craft beer or cocktails
Or it could come in the form of coconut water, cold-pressed juice or the latest frothy caffeinated concoction.
No matter what your
preference, startups and their backers likely have you covered.
In a follow-up to ourstoryearlier this month about food startups gobbling up
venture funding,Crunchbase Newsis taking a look at beverage companies guzzling capital
We found that while drinkables receive a smaller portion of funding than edibles, it still a sector that draws hundreds of millions of
dollars in annual investment.
Where are investors pouring all that money Some unlikely places
For instance, it appears the largest funding recipient so far this year is a China-based chain calledHey Teathat well known for a specialty
(An unfortunately named, slightly salty iced drink that aCrunchbase Newsteam sampling determined was actually pretty tasty.)
Besides cheese
tea, we found startups are also raising millions to bottle deep ocean water, customize instant coffee and make your party punch more
portable.
Bottom line: So long as there are profit margins to squeeze out, the quest continues for new ways to get you drunk, hydrated or
Below, we look at what trending on all these fronts.
Hydrate
Venture investors and startup entrepreneurs are betting there are highly
scalable businesses to be built in doling out more exotic varieties of water, coconut-based beverages and other drinks to hydrate
calorie-conscious consumers.
An analysis of Crunchbase data unearthedat least a dozen companies developing new varieties of water and
fitness drinks that have raised funding in recent quarters.
Funding data reveals that investors still see the potential for significant
returns from coconut water
The largest round in the hydration category went toHarmless Harvest, a seller of fair trade, organic coconut water and probiotic drinks that
recently raised $30 million
The funding comes as the sector is on a tear, with the U.S
spending alone on coconut waterprojectedto reach $2 billion next year.
We also saw a couple of deals involving startups offering
alternatives to bottled or tap water
The most heavily capitalized one to receive funding in the past couple of years appears to beFloWater, a Denver-based startup that provides
pure water refill stations and has raised about $8 million to date
Meanwhile, bottled water is still generating attention, too, as evidenced by the $5.5 million round late last year forKona Deep, a bottler
of deep ocean water.
Intoxicate
You may need water to survive, but if you&re looking to secure venture capital, it helps to throw in a bit
of alcohol.
Since last year, venture investors have poured more than $300 million into an assortment of companies providing alcoholic
beverages, drinking gadgetry and services to connect consumers with booze.Crunchbase Newshighlighted about adozenthat raised sizable rounds,
along with one hangovercurestartup.
Some of the larger funding rounds are for companies that don&t make alcohol; instead, these startups
offer easier ways to select and buy it
These includeVivino, a popular wine rating app, as well asDrizly andSaucey, two ordering and delivery services.
There are emerging brands in
the mix, too, includingBeatBox Beverages, a purveyor of party punch in portable packages;Milestone Brands, a producer of organic tequilas
and other spirits; andPlum, which has a gadget for dispensing good wine by the glass.
Caffeinate
If too much drinking makes you sleepy, let
caffeine come to the rescue
Venture investors, known to be heavy consumers of caffeine, also seem to like investing in the stuff.
Using Crunchbase data,
wehighlightedmore than a dozen companies in the coffee and tea space that have secured good-sized rounds in roughly the past year
They range from fast-growing chains, like China Hey Tea, to packaged drinks, like non-dairy blended drink makerWillow Cup, to instant
beverage innovators, like Sudden Coffee
We even found a blockchain company in the mix,Crypto N Kafe, which aims to connect coffee farmers and consumers directly.
It not a bad area
The most recent significant exit wasBlue Bottle Coffee, a venture-backed brand known for really, really strong brews that sold a majority
stake to Nestlé last September at a valuation of over $700 million.
Nourish
One additional beverage category in which we saw a high level
of activity was in meal-replacement and nutrition drinks
Overall, we found at least ahalf-dozen companiesdeveloping nutritional drinks that have raised funding in recent quarters.
In this sector,
probably the best-known startup name isSoylent, which has raised over $70 million for a line of drinks marketed to consumers who don&t have
the time or inclination to sit down for a traditional meal
We also found a potential rival, meal-replacement beverage makerAmple, which secured angel funding last month.
The biggest round in the past
couple of months for the space, however, went to REBBL, a startup that raised $20 million in May for its line of bottled drinks featuring
health-promoting herbs, protein and coconut.
Mix it all up: Caffeinated, full and buzzed
Beverage investments, like everything else, aren&t
always a home run for VCs
The demise of juicer startupJuicerolast year offers a cautionary tale that large rounds don&t always translate into compelling business
models.
That said, beverage purveyors don&t have to worry much about demand drying up
People will always be thirsty
And while we typically quench our thirst with simple tap or filtered water, where the fun (or the massive exit potential) in
that
Methodology
Our analysis focused primarily on companies that have secured funding in the past year; however, we also included some
rounds outside those parameters that were exceptionally large or noteworthy in other ways.
