Austrian beverage brand Waterdrop has closed a $70 million Series B funding round led by private equity firm Temasek, the company announced this morning.
The capital will be used to help accelerate Waterdrop’s global expansion and support investment in R&D, according to a press release. Existing shareholders Bitburger Ventures and Founders Future also participated in the round.
Launched in 2016, Waterdrop markets zero-sugar, zero-calorie powdered cubes, dubbed “micro(drinks),” that add natural flavor and vitamins when dissolved in water. Under the tagline “DRINK MORE WATER,” the company has marketed itself as offering a more sustainable alternative to single-use plastic water bottles by encouraging the use of refillable bottles, which it also sells. The plastic contained in a single cap of a typical single-use bottle is equivalent to the packaging of 10 micro drinks, according to the company.
“Our approach to the water business is to develop ecological solutions to promote responsible consumption of tap water and avoid the outdated idea of having to bottle and ship unsustainable and mostly unhealthy beverages. Tap water is a safe, economical and sustainable source of drinking water,” said Waterdrop founder and CEO Martin Murray in the release. “Today, sustainability is not a privilege: it is a requirement! It’s encouraging to align with one of the world’s leading investment firms on our vision for a new revolutionary era in the beverage industry.”
Over 70% of Waterdrop’s sales come from D2C channels, but brick-and-mortar retail is a key component of its growth strategy, with over 20 of its own stores across Europe and three physical locations in the U.S. Led by its flagship store in Miami, other U.S. locations include a kiosk in the World Trade Center and a seasonal pop-up inside department store SHOWFIELDS – both in New York City — with plans to add a further 3 to 5 stores this year. On the West Coast, Waterdrop is set to launch with Erewhon in Southern California starting March 1.
Outside of the U.S., Murray said that the company will next look to expand in China and Southeast Asia.
“We are proud to be an Austrian company yet in the medium term we will have offices in the US, Paris, London, Brno and Singapore,” he said. “We are already a plastic-positive company, and we aim to go much further in our efforts. It’s time to pull our act together and embrace eco-responsible solutions.”
The company’s latest innovation is LUCY, a “smart cap” that cleans water using UV-C light and helps users track their daily hydration habits through an accompanying app. The product is currently available exclusively in Europe, with no confirmed release date for the U.S.
Operating a portfolio valued at $381 billion, Singapore-based Temasek’s investments range across industries and product sectors. Within food-tech and CPG, the firm has backed Asian companies including plant-based chicken maker Next Gen Foods and Chinese RTD beverage brand Genki Forest. Last November, the company announced the launch of the Asia Sustainable Foods Platform to address challenges in scaling alternative protein production, as well as accelerating the growth of sustainable foods in Asia.
“We are very proud and excited to further support the revolutionary journey of waterdrop in this growth stage,” said Friedrich Droste, Head of Strategy, Digitalization and Corporate Development at Bitburger Ventures. “Since our initial investment three years ago, waterdrop has developed from a highly disruptive concept to a global category leader with 9-digit sales volume providing the consumers with a highly innovative, convenient and comprehensive hydration portfolio.
We are extremely confident that waterdrop’s products and services will change the way people drink water in the future and significantly contribute to more planet-friendly and healthy consumption. We are delighted to have contributed significantly again to this financing round and particularly pleased to welcome one of the world’s leading investors Temasek to our international group of shareholders.”