Canned margarita brand sipMargs has closed on a $2 million funding round led by Lab Capital Advisors, the same investor that put $3 million into the brand in May 2022.
Launched in Spring 2021, the 12 oz ready-to-drink cocktail line sports five flavors— Classic, Mango, Coconut, Mezcal, and Spicy— as low-sugar and low-calorie options with 5% ABV.
Co-Founders Joey Angelo and Brian Axelrod are veterans of the wine and spirits industry: Angelo most recently served as president and co-founder of VIVA XXXII Tequila and Axelrod most recently was a core member on the founding team with Conor McGregor for Irish whiskey Proper 12.
Having found an early niche in alternate on-premise venues including MetLife Stadium, Highmark Stadium, UBS Arena, and Tao Group, sipMargs expanded its footprint into Massachusetts, Illinois and Georgia, expanding outside of its launch footprint of New York and New Jersey. Michigan, Ohio and Connecticut came next and will remain the markets the brand will be most focused on, to be followed by Virginia and Southern California slated for 2024.
“The macroeconomic climate has made it difficult for many startups to raise funding at the moment,” said CEO Justin Nabozna. “Over the last year, our lead investor has seen the growth potential and positive momentum in the states we are currently distributed in and led this fundraising round despite these conditions.”
Funding will be used to invest heavily in marketing and sales in its newest states.
“We want to focus on expanding our current distribution and brand awareness in the states that are gaining traction,” said Nabozna. “This comes in the form of local events, sales activations, and data-driven marketing campaigns.”
The push comes as tequila-based RTDs have continued their rise, albeit still coming in after vodka as the dominant base. Tequila RTDs grew sales off-premise 62% in the last 52 weeks compared to the same time period as last year, with the margarita up 29% in dollar share value according to NIQ.