Enhanced Water Company Lemon Perfect Raises $ 6.6 Million in Seed Funding
A group of investors, including NBA athletes Nick Young, Blake Griffin, Kyle Kuzma, Spencer Dinwiddie, as well as ESPN’s Jordan Schultz and former Bai Brands COO Barak Bar-Cohen, helped Lemon Perfect lift seed funding of $ 6.6 million.
The new round brings the total funding for the California enhanced water startup to $ 11.6 million to date, according to CEO and founder of Lemon Perfect, Yanni Hufnagel, who launched the company in 2017 to bring nutrients in cold pressed lemon water suitable for all palates. .
The former basketball coach notes how little innovation there has been in this sub-sector of the entire functional drink category since Bai entered space. He said, “Improved water is loosely defined by antioxidants or hydrating electrolytes, and the market is huge.”
Indeed, market researchers indicate how growing concerns about the quality of tap water and carbonated non-alcoholic drinks have recently led to rapid growth in sales of improved water.
The overall category was valued at $ 6.8 billion in 2018 globally, according to UnivDatos Market Insights, and is expected to reach $ 13.26 billion by 2025, posting a CAGR of 10.04% during the forecast period.
High speed drinks
Beechwood Capital, one of the investors participating in the Lemon Perfect round, said his team found the company while researching unique, differentiated and disruptive consumer products to invest in.
“We absolutely love the product,” Larry Kahn, the managing partner of the company, told me. “Their taste appeals to a large audience and [they are able] take part in other functional drinks – both juice and obviously soda. ”
He added that Beechwood Capital, which has already invested in several high-growth CPG brands such as chickpea pasta Banza and Once Upon a Farm, typically targets companies that generate between $ 3 million and $ 15 million in revenue. annual business.
“There is no one-size-fits-all investment here,” Kahn said. “We’re looking at brands of drinks at high speed, and shelf stability is important. “
$ 10 million sales target
Capitalizing on the growing consumption of improved water, Hufnagel explained to me how his business is currently ‘on fire’ with sales increasing 809% between February and July 2020 after entering into new distribution and retail partnerships.
All four of Lemon Perfect’s sugar-free varieties – just lemon, peach, raspberry, blueberry acai, and dragon fruit mango – are currently available on Amazon and in approximately 3,000 stores in the United States. United, including 7-Eleven, CVS, Publix, Target, and whole foods.
“Our gross revenues in June 2020 exceeded our revenues in fiscal 2019 and we almost doubled our revenues in July,” Hufnagel said. “Beverages are still largely impulse buying decisions, so the challenge for us is to really paint ‘the story of yellow’ under the retail roof, fighting for extra space.”
At the close of its latest fundraiser, Lemon Perfect will focus primarily on hiring additional employees to support retail execution and marketing, in addition to launching a direct digital platform to retailers. consumers.
“I think we can triple from 2020 to 2021 and achieve $ 10 million in revenue,” Hufnagel said. “The business can scale very quickly from there, and we plan to increase our A series next year.”