Black Medicine, maker of premium ready-to-drink iced coffee beverages brewed under nitrogen pressure, has completed a capital raise of $1 million.
The Oakland, Calif.-based company announced the raise in a press release Monday. Black Medicine founder and CEO Chris Cooper said the new funds will be put towards “[accelerating] the brand’s Western U.S. expansion and [bolstering] our resources to support rapid growth.”
In a call with BevNET, Cooper revealed that the raise came out of a need to keep up with a fast-growing premium ready-to-drink coffee category.
“There’s lot of competition in this space so it’s not possible to simply grow slow and wait five to ten years to see if you do well,” Cooper said. “You need to be aggressive to try to get a position in this market.”
Cooper also championed the services of CircleUp, the equity-based crowdfunding platform that Black Medicine utilized for the round.
“It was time to fund our growth but it was also time to bring on more expertise in terms of advisory,” Cooper added. “We found the best way to do that was to use CircleUp.”
Reached by e-mail, CircleUp’s director of business development, Ben Lee, said that Black Medicine – which began its round of fundraising in early May – saw “one of the fastest fundraises on our platform to date,” of the 10,000 companies that have applied to CircleUp (five percent of applicants are typically accepted on the platform).
“At CircleUp, we use analytics and machine learning to perform in-depth evaluations of early stage companies, analyzing business based on an average of 90,000 data points to make decisions about which enter our marketplace,” said Lee. “When we assessed brand, leadership, product and financials – Black Medicine scored high across the board.”
Cooper also pointed to the recent entry of coffeehouse giants Starbucks and Peet’s (by way of its acquisition of Stumptown Coffee Roasters) into the nitro coffee space as further validation of Black Medicine.
“Their entry gives a lot of credibility to the category,” Cooper added. “It grows it for everybody,”
Cooper said the company will continue to place its focus on the West Coast before expanding across the country. The brand is now available in 700 stores, including Whole Foods, New Seasons and Safeway.
At the start of 2016, Black Medicine opened a new 18,000 sq. ft. facility in East Oakland.
Black Medicine’s full press release can be found below:
OAKLAND, Calif., June 20, 2016 /PRNewswire/ — Black Medicine Iced Coffee, innovator of the first pressure brewed RTD coffee, is announcing completion of an oversubscribed $1 million fundraising round on CircleUp, the leader in online marketplace investing, focusing on early stage, innovative consumer products companies. Says Founder and CEO Chris Cooper: “We are thrilled to have nearly doubled our goal, successfully raising $1M to accelerate the brand’s Western U.S. expansion and bolster our resources to support rapid growth. We are very impressed with the quality of CircleUp’s service and online platform.”
“While the coffee category has continued to see innovation and new products for years, Black Medicine managed to bring something entirely new to the market with its unique pressure brewing, which really makes the product pop,” said Ben Lee, Director of Business Development at CircleUp. “The unique product, combined with their sheer velocity of sales, led Black Medicine to raise one of the fastest rounds CircleUp has seen to date.”
Black Medicine’s past 6 months’ sales through May 2016 have increased 68% over the previous comparable period. During the last few months, Black Medicine has significantly expanded its distribution footprint in the Pacific Northwest market, increasing the brand’s presence to over 700 stores across leading natural, specialty and grocery retailers such as Whole Foods Markets, New Seasons and Safeway. In the brand’s core Northern California market, according to the past 52-week SPINS data for Safeway, Black Medicine’s Iced Coffee is the #1-selling unsweetened single-serve cold coffee, and its Iced Latte is #2. Black Medicine is Safeway’s #3 refrigerated coffee brand overall.
Black Medicine is redefining the RTD coffee experience by offering uncompromising taste as a result of its proprietary pressure brewing process, which keeps oxygen out and allows for a fuller extraction from the coffee, resulting in a more balanced, smooth and flavorful experience than standard cold brews. “Our rapid growth since we first launched Black Medicine 2 years ago has been driven by strong consumer demand, leading to increased velocity and distribution within leading natural, specialty and grocery food retailers,” explains Chris Cooper. “We are seeing significant interest among cold coffee loving drinkers who consistently cite the brand’s bold package design, delicious all natural taste, and extra-strength caffeine content as reasons for making Black Medicine their preferred ready to drink cold coffee option.”
About Black Medicine
Developed as a hobby and launched in January 2014 by entrepreneur and coffee lover Chris Cooper, Black Medicine is the innovator of the first pressure brewed RTD coffee. Black Medicine is brewed and bottled in the Company’s new 18,000 sq. ft. facility in Oakland using a custom, proprietary process that first roasts a special blend of Latin American and African coffee beans and then brews in a high-pressure nitrogen environment before cooling it down in small, concentrated batches. Unlike standard cold brewing process, this keeps oxygen out of the process and allows for a fuller extraction from the coffee, giving it a more enjoyable and nuanced flavor profile. The brand is currently available in 3 flavors and sold in the Western U.S. at leading natural, specialty and grocery stores including Whole Foods Markets, New Seasons, and Safeway. To learn more about Black Medicine, please visit www.blackmedicine.com or connect on Facebook , Twitter or Instagram