Powder-based hydration drink Hydrant has raised $8.5 million from a range of celebrity and athlete investors, including Lance Bass, Aaron Rodgers, Ashley Greene, Josh Allen, and others.
How did Hydrant get here?
Co-founded in 2017 by John Sherwin, an Oxford-trained biologist, and former private equity associate Jai Jung Kim, Hydrant is one of a range of startups in both RTD and powder formats that has embraced a science-backed positioning in the “rapid hydration” segment; according to a press release, Hydrant promises a “balanced mix of electrolytes, vitamins and minerals,” plus “just the right amount” of sugar. Since launching as an exclusively direct-to-consumer brand in 2018 with its flagship Hydrate SKU, the company has introduced three more functional drink mixes: Energy, Immunity and, most recently, Sleep. The products are sold in around 10,000 doors nationwide, as well as on Amazon, according to Sherwin.
The company closed its Series A funding round, led by Coefficient Capital, last May. The round also included Rx3 Ventures and prior investors Soma Capital and Sixers Innovation Lab, an incubator program run by the NBA’s Philadelphia 76ers. The company’s total investment to date is over $17 million.
Who is involved?
After initially backing the company in last year, Rx3 Growth Partners returned to lead Hydrant’s Series B funding round. Launched in 2019, Rx3 is a consumer focused growth equity fund co-founded by Nate Raabe, Byron Roth of ROTH Capital Partners and reigning NFL Most Valuable Player (and guest Jeopardy! host) Aaron Rodgers. The $50 million fund — whose investors include stock car driver Danica Patrick and a “half-dozen NFL quarterbacks” — is designed to leverage its star power by promoting “relationships where influencers are stakeholders in a brand’s long-term success,” and has backed CPG brands including Super Coffee and Orgain. As part of the deal, Ryan McGuigan, principal at Rx3, will join Hydrant’s board of directors.
Also joining the round were notable names such as singer Lance Bass, Buffalo Bills quarterback Josh Allen, actor Ashley Greene, tennis pro Sloane Stephens, former UFC fighter Michael Bisping, trainer Ron “Boss” Everline, and ex-NFL players Jonathan Stewart and Darren Sproles. The company said the investors represented a combination of both individuals and participants via investment in Rx3, but did not specify who those were.
Though celebrity investment across both non-alcoholic and alcoholic beverages is nothing new, some of the biggest names in sports and entertainment seem to have a particular affinity for the powder beverage format. Prior to its acquisition by Unilever, the roster of names backing Liquid I.V. included everyone from Kevin Hart and Justin Bieber to Patrick Schwarzenegger and his mom, Maria Shriver. Elsewhere, Grammy winning rapper Nas and British tennis star Andy Roddick participated in a $2.6 million funding round for Cure Hydration last November.
What does it mean?
Powder-based beverages and sports drinks hardly qualify as new innovations. But a new generation of brands has steadily helped build interest in this segment over recent years, and the industry is taking notice. The shelf-stable sports drink mix segment grew 38.3% ($137 million) across MULO through March 12, 2021, according to data from IRI. Along with Unilever’s deal for Liquid I.V., strategics like Danone Manifesto Ventures and Nestle Health Science have been active recently in staking claims to innovative category brands like Laird Superfoods and Vital Proteins, respectively.
Sherwin acknowledged that while hydration mixes have been traditionally linked to sports and athletic performance, Hydrant is being positioned to develop as an overall wellness platform that has a place in consumers’ “off-court” lives, as reflected in its different functional SKUs. In terms of marketing, that means consumers may see Rodgers or other investors talking about how they use the product on their own platforms, but also potentially have their likeness featured in retail displays.
Deepening its relationship with Rx3 Growth Partners and its diverse group of celebrity backers was a “no-brainer” for the company, he said, particularly as Hydrant seeks to drive awareness to support its expansion across retail channels, starting with a larger presence in brick-and-mortar. The product entered Whole Foods stores in the Northeast in 2019, launching at Walmart nationwide last fall and most recently at CVS nationwide. In a press release, Hydrant co-founder Jai Jung Kim said that the funding will help the company “easily be able to adjust to new acquisition and overhead costs, all-the-while funding innovation in our growing pipeline.”
“We’re not completely agnostic when it comes to what type of retailer (we work with),” Sherwin said. “But we have some strong partners already, and I think our goal for this year is really going to be holding good on our partnership with those retailers to make sure the velocity is good off those shelves.”