Sugary drinks have a bad rap for good reason, and Olipop has raised a new round of funding to not only challenge the soda industry but also improve gut health.
The Oakland startup announced a $30 million Series B round Tuesday led by Monogram Capital Partners, bringing its total funding to nearly $56 million. The round also attracted a slew of A-listers, including performers Camila Cabello, Priyanka Chopra Jonas, Nick Jonas, Joe Jonas, Kevin Jonas, Mindy Kaling, Logic, Gwyneth Paltrow and former PepsiCo CEO Indra Nooyi.
Not only is the drink low in sugar, its key ingredient is fiber — specifically a blend of prebiotic fiber primarily derived from cassava, chicory and Jerusalem artichoke. The company is even named after scientific term for this: oligosaccharides.
The fiber blend is "not heavy on flavor but they definitely contribute to mouthfeel,” CEO and co-founder Ben Goodwin told me.
Goodwin co-founded the company with David Lester in 2018. They were selling the product by the end of that year and entered the market for what is now often referred to as functional beverages — or a drink with added nutritional benefits. Olipop is available in 10,000 stores around the country, as well as direct-to-consumer online. A single can retails for $2.49.
Olipop comes in eight main flavors with seasonal limited editions periodically released.
“Once I create a tangible formula, I start to tease out what’s missing, what needs to change,” Goodwin said. “I think about the flavor almost in musical terms or sonic terms. Like, OK, I need more midnote here or I need more bass on this part of the flavor, and I’ll keep hitting it from that angle until the flavor tells a full story, the story that I want.”
Goodwin, 36, and Lester, 40, have both worked in the food and nutrition industries for many years. While studying environmental science at the University of California, Santa Cruz, Goodwin started making kombucha with a friend and sold it under the brand Kombucha Botanica. That’s when he started learning about product development, the microbiome and gut health. He dropped out of college and started pursuing a career as an entrepreneur in the food space.
"Going through my own experience recognizing how much nutrition affected quality of life and consciousness, and the concept of that being available for many more people, how positive that could be, has always been my motivating factor," Goodwin said.
He said the company currently holds about two-thirds of the functional beverage market. They’re currently researching other potential nutritional add-ons but no new ingredients will be added to the Olipop line unless there’s clinical data to back it up.
The startup has tripled its headcount to around 60 employees over the past couple of years.
Going forward, the company will be focused on growing beyond the niche natural products market to pursue more mainstream customers and conventional retailers, and doubling its retail footprint to 20,000 stores nationally. It expects to hit a $100 million run rate this year, too.
Olipop is also exploring an international expansion to Canada and could break into that market within 36 months, Goodwin told me.
