Energy shot Ketone-IQ has added strategic partners to its cap table as it expands into the mass and convenience channels.
H.V.M.N, the parent company of Los Angeles-based Ketone-IQ, recently secured an undisclosed “seven-figure investment,” which included new investors Seaside Ventures, former mixed martial artist Jon Jones and the Flight Fund, founded by British entrepreneur and “Diary of a CEO” podcaster Steven Bartlett.
“It was opportunistic,” Ketone-IQ founder and CEO Michael Brandt told BevNET. “From time to time, we make space for people who are strategic, plugged into the community and can be helpful. People who are passionate about the brand.”
Jones has already taken on the title of Chief Performance Officer and has created marketing content for the shot maker.
Founded in 2017 (as Health Via Modern Nutrition, or HVMN), Ketone-IQ launched its flagship RTD product, a 2 oz. shot that contains 10 grams of ketones, in 2022. The company expanded with a High-Performance shot with five grams of ketones with 100mg caffeine. Both formulations are available in Peach, Green Apple and Rasberry Lemonade flavors, with the caffeine-free variety also in Original. Online, the brand also sells a No Caffeine concentrated multiserve option that can be mixed into water or another beverage.
Similar to its strategic partnership with the Family Fund, Seaside Ventures provides a base of investors who have been operators, entrepreneurs and brand founders who can advise Ketone-IQ on how to build a successful business.
Launched in 2022, Seaside Ventures was cofounded by Ryan Roddy and Harrison Valner, the founders of endurance sports nutrition brand Kyoku. The firm is an early-stage (seed and series A) investor in health and wellness companies as well as beverage brands like Aura Bora and Leilo.
“For our business profile, I’m looking for [a] smaller quantum of capital,” Brandt said. “It’s more helpful when it’s strategic, when the people on the cap table have done it themselves before. They have ideas and can make introductions, because then we’re actually moving.”
Next month, Ketone-IQ will launch into 1,442 Target stores with three varieties in a 6-shot multipack. As part of that “big retail push, Ketone-IQ has landed a Circle K distribution deal in the West region after completing a pilot run. The brand will also be going nationwide at Chevron ExtraMile locations.
Currently, Ketone-IQ sales are about 70% online with the remaining 30% in retail, but the brand is in the process of shifting its focus to retail expansion.
Initially targeting endurance athletes and fitness enthusiasts, the brand has positioned itself in retail as a premium alternative to the more conventional shot brands like 5-hour Energy or Tweaker. Brandt sees an opportunity to attract health-conscious consumers with “clean energy.”.
“The market has moved on,” he said. “We’re coming in decidedly more expensive. When you think about energy, it’s not just about getting zippy right now. It’s about getting a lift right now, but also giving me something that’s going to help me be more metabolically healthy tomorrow as well.”
Yet, telling that story takes educating consumers of what a NSF-Certified ketone-ester shot is and how ketones are metabolized during exercise. This is where Brandt sees the value in its partnerships with not only former athletes like Jones and Lance Armstrong, professional cyclists and distance runners, but also investors like Vital Proteins founder Kurt Seidensticker, who helped build the collagen supplement category.
The goal is to build the brand not just on the checkout counter next to energy shot category incumbents but to proliferate throughout the store, in the supplement aisle or the refrigerated section next to juice shots and energy drinks, Brandt said.
The “educational surface area” that online shopping provides has been a benefit but “fundamentally food and beverage sales goes down in retail,” Brandt said. “There’s only so many people who want to buy $100 of energy shots on the internet and wait three business days for them to show up in the mail.”