Prebiotic soft drink Olipop scores US$10m investment in series A round

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​Digestive health soda brand Olipop has raised nearly US$10 million in its first major financing round. The news was confirmed by David Lester, Olipop’s Co-Founder and President. Among the investors, Döhler Ventures and Terpsi Capital were two new additions to the list. In light of the investment, Olipop plans to expand its reach to the East Coast and focus on sales and marketing, product innovation, its direct to consumer (D2C) business. Moreover, the brand seeks to strengthen the appeal and awareness of digestive health across the US.

“In 2019, it was important for us to firmly establish our brand in the western half of the US,” says Lester. “The company wanted to ensure Olipop fit well in the marketplace. We have tested our growth drivers and supply chain before expanding the beverage nationally. We were fortunate enough to be able to turn down potential distribution opportunities and still grow the business significantly. Now we’re in a position to start sprinting.”

The brand has built a loyal consumer base through its familiar and sometimes nostalgic tasting sodas formulated with prebiotics, plant fiber and botanical extracts. Some of the brand’s popular flavors include Ginger Lemon, Cinnamon Cola, Strawberry Vanilla and Classic Root Beer.

Participants in the round include Monogram Capital Partners, Rocana Ventures, Finn Capital Partners, Boulder Food Group and Collaborative Fund – all current investors in the Olipop brand that have chosen to increase their respective stakes.

Digestive health remains a major industry trend and is steadily rising, with Innova Market Insights reporting an 11 percent CAGR in food and beverage launches with a digestive health claim (Global, 2014-2018). In this arena, prebiotics and probiotics continue to reign in NPD, with the market researcher’s data showing a 17 percent rise in launches with a probiotic claim (Global 2014-2018).

From yogurts and snacking to beverages, the industry saw a range of prebiotic applications last year. According to Olipop, the trend in prebiotic beverages is picking up serious momentum in 2020. The award-winning prebiotic beverage brand seeks to become an early category leader in next-generation soda.

Lester says that it is validating to see many of the original investors who understood their vision contribute further to Olipop’s growth.

Launched in the San Francisco Bay Area in fall 2018, Olipop notes that it has built a strong foundation for its business along the West Coast. This month, the prebiotic soda becomes available at cult grocery chain Wegmans, as well as at the QFC and Fred Meyer divisions of Kroger. Natural grocer Sprouts will begin selling the soft drink in May 2020.

The brand also started shipping Classic Root Beer, its fourth and newest flavor, in January 2020. Olipop Classic Root Beer was introduced in December 2019 as an e-commerce exclusive. Initial retailers carrying the new flavor this year include Whole Foods Market and Fred Meyer.

“We’re excited for 2020 and the opportunity to define and lead the growth of the digestive health section in grocery stores across the country,” Lester concludes.

Other notable beverage launches with a focus on digestive health include GoLive’s imminent release of six new ready-to-mix (RTM) synbiotic blends, as well as ZBiotics’ launch of the first genetically-engineered probiotic on the market. Plant-based, functional beverages brand Rebbl also launched a new line of drinks that boast six grams of prebiotic fiber for digestive health.

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