In preparation for taking the company public on the Canadian Stock Exchange later this year, energy drink maker Guru Beverage Inc. announced this week that it has raised $34.5 million in private financing.
The fundraise surpassed GURU’s fundraising goal of $20 million and was completed through a group led by Stifel Nicolaus Canada Inc. and included CIBC World Markets Inc. and Laurentian Bank Securities Inc. The announcement comes ahead of the company’s going public through a reverse takeover involving Mira X Acquisition Corp., which is expected to be approved by Mira X shareholders on October 28.
As well, GURU shareholders will offer and sell roughly $5.3 million of common shares to new investors, on a prospectus exempt basis, prior to the closing of the reverse takeover.
GURU produces an organic plant-based energy drink available in full and reduced-calorie versions in 8.4 oz. and 12 oz. cans. Last year, the brand introduced a Matcha flavor to its core line. As well, a three-SKU line of zero-sugar Energy Waters is sold exclusively in Canada.
GURU president and CEO Carl Goyette said the funding will primarily go towards supporting the brand’s growth efforts in the coming year. Based in Montreal, the company told BevNET in August that it is seeking to go nationwide in Canada as well as grow its U.S. business. Speaking this week, Goyette said the higher-than-anticipated capital will not alter GURU’s strategy, but may allow it to execute its plans at a faster rate.
He added that GURU has quadrupled sales over the past six years and the company anticipates it will continue to accelerate that growth going forward.“It kind of confirms the strategy as we know that these institutional investors are here to support us for the long run,” Goyette said. “We’ve always been very methodical and disciplined on how we invest our funds. But it certainly gives us the opportunity now to be a lot more aggressive in pursuing some of the opportunities that we have been chasing.”
Founded in 1999, GURU has taken a slow route to growth, Goyette said, as the company has sought to remain cash flow positive and reinvest profits into the brand rather than take on excessive debt.
Though traditionally the brand had primarily focused on the natural and specialty channels, Goyette said GURU will now target growth in the convenience channel, where energy drinks see their highest sales. Though he said the brand saw a significant drop in sales in the channel this spring, as the pandemic severely limited foot traffic within c-stores, sales have since returned to about their pre-virus velocities.
“There’s a certain time where you’re ready to focus on c-stores and we now need to establish a certain base of consumers,” he said. “There’s a need to meet the demand of velocity expectations in c-stores and the cost of entering c-stores with DSD distributors is very different from playing in the natural channel.”
Though California remains GURU’s key market in the U.S. — the brand is available in 7-Eleven as well as other major chain retailers in the state — Goyette said going nationwide is a long term goal. Outside of convenience, GURU will also continue to build a presence in the grocery, natural and drug channels.
“You have to win in c-stores if you want to win in the energy drink category, right? That’s not a secret,” he said. “But it’s a totally different beast. We obviously have a lot of experience in convenience stores in Canada, so we now have to evaluate the opportunities and find when the right time will be for GURU to be a significant player in the U.S.”