Venture capital fund AccelFoods announced today it is leading a planned $5.6 million convertible note round in Roar Organic, the first institutional round for the beverage company.
AccelFoods said it has committed $1.25 million, of which $625,000 has already been invested in the better-for-you sports drink. The full round is expected to close in the first week of January. Speaking with BevNET, AccelFoods managing partner Jordan Gaspar said Roar was a strong fit for the firm’s portfolio as the brand is clean label and organic, as well as targeted at female consumers.
“As a woman founded and run fund we certainly have a high degree of conviction around the thesis of a female-directed, low calorie, low sugar alternative to traditional sports hydration beverages,” Gaspar said. “So when we think about the needs of the consumer, we are the target consumer for this product and we certainly feel there is a need in the market.”
AccelFoods will gain a seat on the Roar board of directors, Gaspar said.
Roar, which launched in May 2017, is currently in about 3,000 stores nationwide including retailers such as Albertsons/Safeway, Costco, CVS, Kroger, Rite Aid, and Wegmans. The brand is available in six flavors, including Strawberry Coconut, Pineapple Mint, Georgia Peach, Cucumber Watermelon, Mango Clementine, and Blueberry Acai. Speaking with BevNET, CEO Roly Nesi said the company has retail growth planned through 2019 but the company intends to use the funds to focus on innovation and on optimizing its current retail accounts, rather than attempt significant footprint expansion. This will include developing new SKUs and multi-packs.
The round will also fund new employee hires, with a focus on expanding the sales and marketing team. According to Gaspar, the brand saw more than 300 percent growth in 2018 but does not yet have the necessary sales team to fully capitalize on the brand’s retail partnerships, adding that the new funding will prepare the brand for “Prime Time” next year.
“Starting this company out of a garage and growing to where we are has been awesome,” Nesi said. “But we have such a great opportunity to scale this thing nationally and to really take advantage of these great retail partnerships that we’ve forged, that we want to put a team together whose been to this movie before and understands exactly what we need to do and what levers we need to pull.”
While Roar also markets a kids line, the brand will shift its main focus toward the adult-oriented Roar Organic products in 2019. Though Nesi said there is room to innovate within the kids space in the future, the organic line will be the company’s core focus going forward.
“We’re thinking lots about how platform extensions will continue to benefit the broader Roar consumer,” Gaspar said. “[The kids line is] still part of our planning stages and thinking through, but it definitely is in the intention of everyone to have everything be very streamlined and targeted toward the specific consumer [women] that Roar Organic has now captured.”