Entrepreneurial experience – both positive and negative – broad capabilities, and a whole lot of money are now part of the mix at Runa, the Guayusa-based “clean energy” brand following MetaBrand Capital’s nearly $6 million investment in the growing company.
In a call with BevNET, Runa president Tyler Gage and MetaBrand founder Eric Schnell explained that the investment will allow Runa to use both the cash infusion and MetaBrand’s long, varied reach throughout the food and beverage industry to grow its drinks business.
“Having a substantial amount of capital from a great partner is a different thing for us – we know we can focus on the business,” and not on the fundraising, Gage noted. Famously starting Runa right out of college with partner Dan MacCombie, he added, “We knew we were on a long road. Thankfully we’ve had the results now to merit a much larger investment, and we want to put capital behind it to grow sales, reduce costs for the next couple of years.”
According to Schnell, the key to the investment was that Runa’s emphasis on “clean energy” as the brand’s point of differentiation from other teas or energy drinks seems to be gaining traction outside of the natural channel, which serves to incubate many new products.
“Part of the inspiration to invest is their proving out the concept at such an early stage,” Schnell said. “It crosses categories much more easily than the typical product. Mainstream retail, food, drug, and mass, is adopting the brand at a much greater rate, and we see it as being capable of sourcing volume much more quickly than others that have been stuck in natural. We have some nice data and case studies of success.”
Schnell parlayed his time with several companies, including Steaz, the brand he co-founded, into the development of MetaBrand, which offers services ranging from ingredient and formula development to branding and sales advisory services. MetaBrand Capital is a separate fund, backed by a private family office. Other private investors in the round — considered a “C” round for Runa — include lawyer Nick Giannuzzi, who negotiated for Runa in the deal, as well as Brian Krumrei, an executive with private equity firm TSG, and Richard Matusow, who was part of the founding team at Sambazon. Earlier investors include actor Channing Tatum and Phish drummer Jon Fishman, as well as Zico founder Mark Rampolla.
The Runa placement is the largest investment yet for MetaBrand Capital, which has also made two smaller investments in the past year. Runa has worked closely with the fund’s sister operation in the past, as MetaBrand has put together its formula and commercialized recipes for the brand from the start.
For his part, Schnell sounded delighted to be able to try to offer guidance to a brand whose early rise seemed to follow a script similar to that of Steaz, a company he remains a shareholder in and which hit some notorious bumps around its growth path.
“There were some early mistakes we made at Steaz,” he said, “But that’s part of our value chain, our roster’s experience: having winning brands and brands that didn’t work out during the day.”
What’s changed, Schenll said, are the targeted outcomes.
“We’re talking about things with Runa more than we did at Steaz about a path to profitability, a path to sustainability,” he said. “At Steaz it was about finding a path to sell. Here it’s about sustainability, to have as much fun along the way as possible while changing and improving lives. It’s not about an exit financially – it’s about how big we make this thing and how we change the world.”
That’s an important component at Runa, which has that kind of “change-the-world” mission in its corporate DNA: the brand works via a nonprofit and a deal with the Ecuadorian government to improve the lot of farmers who work with the Amazonian guayusa leaf. According to both men, the path remains open to further investment in the supply chain surrounding guayusa, as well, from both parties.
“What I really admire about Eric is that he built a tremendously successful brand, he hustled from the ground up, he knows and has made many of the same mistakes we’ve make from the ground up, and he’s been very transparent,” Gage said. “It’s just helpful working with someone who is a real person and whom [Gage and co-founder Dan MacCombie] admire as people, with the transparency of those they’ve made along the way – you don’t get that without experience.”