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Viral TikTok Prebiotic Soda Brand Poppi Raises $25 Million Series B To Expand Nationwide Through DSD

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Poppi, previously known as Mother Beverage, has raised $25 million in a series B financing round to continue expanding its gut health-focused prebiotic beverage, and plans to switch all distribution to direct store delivery (DSD) by January 2023.

This round, which was led by the founder of CAVU Consumer Partners Rohan Oza who initially discovered the brand on Shark Tank and eventually led its rebrand to Poppi, brought the company’s total financing to nearly $53 million, PitchBook data showed.

Poppi raised $13.5 million in series A last year also led by CAVU, and currently employs approximately 60 workers, including recently appointed CEO Chris Hall and CMO Lana Buchanan. The latest capital raise could further intensify competition in the prebiotic soda market, where emerging players such as Wildwonder and Mayawell are also ramping up their sales with significant backing. Olipop remains a leader in the overall functional soda market with a whopping 61% share as of October 2022, Nielsen data showed, followed by Poppi with a 34% stake.

Husband-and-wife team, Stephen and Allison Ellsworth, came up with the idea of Poppi about a decade ago when Mrs. Ellsworth began drinking apple cider vinegar as a relief for her gut health-related issues. Their prototype, which Mrs. Ellsworth described as functional, yet “medicinal” at the time, was discovered by a Whole Foods buyer only three weeks after the duo sold it at a local farmers market in Texas.

After appearing on Shark Tank nearly three years ago, and officially rebranding to Poppi through collaboration with Oza, Poppi took off immediately, selling in more 20,000 retail stores across major banners, including Target TGT , Whole Foods, Sprouts, and Publix, and growing by 148% in year-over-year revenue.

Commenting on CAVU’s decision to invest in Poppi, Oza wrote me via email: “We saw an opportunity to build the modern soda for the next generation... we will continue to lean in to our omni-channel presence on platforms like Amazon AMZN and Instacart, where the brand has seen breakout success. With coverage coast to coast and culturally relevant marketing driving the brand forward, we believe the sky is really the limit for Poppi.”

Ellsworth added how CAVU has helped transform Poppi to be a solid soda product. “It’s full of flavor, and it’s functional, and we want to continue to push that hyper-intense growth,” she said. “Right now, we’re doing a small test run in Walmart, and we plan to enter the club channel next year, which is a whole new world to us.”

Ellsworth partially attributes Poppi’s success to TikTok, a platform the company hopes to continue investing in moving forward. “TikTok is so powerful that anyone can go on there and [has a chance] to go viral. We’re experiencing amazing growth, and hoping to connect with more consumers emotionally, so we can have another major TikTok moment.”

On the retail front, an important upcoming milestone for Poppi is to build out a full DSD network as the company plans to enter 30,000 store counts by the end of 2023. This distribution model will allow Poppi to achieve nationwide coverage more efficiently, according to Ellsworth.

Rarely any early-stage consumer brands can establish a nationwide DSD network, she stressed. “That’s why it’s mind-blowing: we’re going to work with 200 different tier-one DSD networks, and piece them together across the country. Our team has been working extremely hard to close six to seven contracts a week, sometimes three [contracts] a day to set this up.”

Poppi will be distributed, alongside larger beverage brands through this new network, such as Canada Dry, which has been owned by Keurig Dr. Pepper since 2008. “DSD is so powerful that we can get better banner-wide execution,” Ellsworth added, “and it’s even better for the consumer.”

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