Plant-based energy drink maker teaRIOT has raised $5 million in funding from PearlRock Partners that will help support a broader nationwide expansion, the company announced Tuesday.
PearlRock is the sole investor in the round and the firm’s chairman and CEO Brian Kelley will join the brand’s board of directors, said teaRIOT CEO Laura Jakobsen. Kelley has previously served as the CEO of Keurig Green Mountain (prior to its merger with Dr Pepper) and as president of Coca-Cola Refreshments. Jakobsen noted that Kelley will help the company to focus on attaining profitability as well as optimizing operations and utilizing consumer insights.
“We wanted to ensure that we had a capital partner with operational expertise and who was in line with us on seeing the future of the brand to become the next generation energy drink,” Jakobsen said.
Founded in 2016, the California-based company previously raised $3 million in a 2018 Series A round.
Last spring, teaRIOT relaunched with its canned ‘Plant-Powered’ energy drink line and dropped its bottled products. The current product portfolio features Berry, Cherry, Citrus and Mango flavors made with a blend of tea, real fruit, and sparkling water. Each 16 oz. can contains 160 mg of caffeine, 100 mg of L-Theanine, vitamin B12 and adaptogens.
The energy drinks had been scheduled for a debut at Natural Products Expo West 2020 prior to the trade show’s cancellation and launched as a Whole Foods exclusive in April. Although launching at the height of COVID-19 uncertainty was difficult, Jakobsen said the experience showed that the brand had potential for mainstream expansion.
“What we found out actually is, during COVID people still are looking for energy, but even more importantly, better energy,” Jakobsen said. “Not only is there a trend for people wanting to feel better about the ingredients that are in their energy drinks, but COVID kind of heightened the awareness of what’s in [food and beverages]. And so we still drove a lot of trial in a time period where people weren’t trying new brands necessarily because our proposition is so clearly conveyed.”
Since the summer, teaRIOT has focused on expanding in its Southern California backyard and has added retailers including Giant Markets, Gelson’s, and Kroger banners including Ralph’s, Smith’s and Fry’s.
TeaRIOT will continue to focus on building out its footprint in the West Coast as it works to gain market share in the energy category, Jakobsen said, with plans to add new retail partners this summer. To support the expansion, the company — which currently has five full time employees including Jakobsen — will also grow its sales and operations teams this year.
“We have a capital partner that is fundamentally different than historically what’s been out there in terms of what they deliver in not only capital, but the expertise and consumer insight,” Jakobsen said. “It is a real partnership and we’re stoked for the partnership. There’s vulnerability that comes on both sides to charge at this together. And it feels great as a founder to have that operational expertise and understanding of how to be excellent.”