ZBiotics, a food tech startup developing a slate of functional CPG products made with genetically modified probiotics, has closed a $12 million Series A funding round led by Spring Tide Capital.
Joining Spring Tide are several other CPG-focused finance firms, including Access Capital, Seamless Capital, Goat Rodeo Capital and Seaside Ventures.
Founded in 2016 by CEO Zack Abbott, who holds a PhD in microbiology, ZBiotics touts itself as a “proudly GMO” company engineering probiotic strains for hyper-specific use occasions. Its first, and to-date only, product launch has been a before-you-drink “Pre-Alcohol” hangover prevention shot, sold in 0.5 oz. bottles.
Available primarily online, with some limited testing in brick-and-mortar stores this year, ZBiotics Pre-Alcohol shots are sold at a bit more of a premium than many competitors in the hangover prevention drink category, averaging between $9-$12 per bottle depending on purchase size directly from the brand’s website. However, Abbott says the shots have repeatedly doubled in sales year-over-year, with a cumulative 5 million sold to date and achieving profitability in 2023.
Now, the new financing is set to bankroll the brand’s expansion into retail while also supporting additional R&D efforts with plans for a full portfolio of future products. Upcoming ideas include a gut health and digestion product set to launch in the coming weeks, as well as in-development sleep, vaginal health and athletic performance products.
“We’re in a really good position with lots of growth,” Abbott told BevNET. “We felt like it was a really great time to put some gasoline on the fire for some of the really exciting initiatives we have planned.”
While ZBiotics has tested its Pre-Alcohol line in select brick-and-mortar accounts – primarily gyms, spas and wellness centers, drug stores and other health-oriented locations – Abbott said the company is looking to mount a serious retail rollout in Q1 2025. Though it is looking to hire for several new roles – adding to its current team of 27 – he noted that the company’s M.O. is to stay lean and grow at a “slow, steady pace.”
Hangover cure and prevention products have been a market mainstay for some time, though liquid drinks are a small piece of an already niche category. While there’s competition for ZBiotics’ flagship product from More Labs’ Morning Recovery and LifeAID’s PartyAID drink, many products in the category come as powders or supplements. Zion Market Research estimates the size of the global hangover cure products market was around $3.2 billion in 2023, but is expected to grow at a CAGR of 14.5% between 2024 and 2032 to reach a projected $9.4 billion.
Abbott said he believes that the trend of American consumers drinking less alcohol than they used to is actually helping sales of Pre-Alcohol, as people are being more conscientious of when and how they drink, leading them to seek out next-day care when they do plan on a night of heavy partying.
“The idea that we could do this in moderation and we could do this more responsibly is a good thing,” he said.
This interest in conscientious drinking may also be something that alcohol-focused investors are paying attention to. At least one of the firms in ZBiotics’ Series A – Goat Rodeo Capital – is specifically focused on the alcoholic beverage sector.
“We found that a lot of investors were either excited about the first product or were excited about the platform technology,” Abbott said. “We felt that both of those were only half of the story for us, so we believe we have a really exciting first product with a ton of headroom and growth that can be done there. But we also are extremely excited about the bigger, long term picture of building a whole category of multiple products.”
Similarly, other alcohol-minded funds have increasingly branched out into adjacent categories, such as InvestBev’s investment in non-alc drinks curator Sèchey earlier this month.
Looking ahead, Pre-Alcohol will continue to be a core piece of ZBiotic’s business for the foreseeable future, but as it extends into other product types – which will not necessarily come as beverages – Abbott said the company’s genetically modified bacteria will serve as its bedrock.
And he doesn’t plan to shy away from singing the praises of GMOs.
“The fact of the matter is, we found it in our research and our experience that if you ask people if they care [about GMOs] they just say ‘I don’t really care one way or the other, but I think everybody else does,’” he said. “The truth is that actually most people don’t, and what they really want are products that work.”