Hydration beverage company lands $5 million infusion to support rapid growth

30-Aug-2018 - Last updated on 30-Aug-2018 at 16:08 GMT

Liquid I.V., a development stage company that has found success with clever marketing of its hydration beverage, has secured $5 million in a star-studded private funding round.

Liquid I.V.’s success can be seen as a lesson in how to put new messaging and marketing around a time-honored formulation strategy.

The company markets an eponymous hydration product that uses what it calls Cellular Transport Technology. This is based on ratios of sodium and potassium combined with sucrose from cane sugar. This formulation builds on research done as long ago as the 1970s on the glucose transport pathway to boost water uptake.

Company flagged by CircleUp for growth potential

The funding round was led by San Francisco-based investment firm CircleUp Growth Partners. CircleUp uses what it bills as a machine learning platform called Helio to evaluate investment opportunities.

“The company’s growth in the past year alone is enough to catch your eye,” said Kiva Dickinson, a partner at CircleUp. “When Helio first flagged Liquid I.V., we were immediately struck by the company’s traction in the market and potential for growth.”

Unlike some other private funding schemes in which companies prefer to keep their investors’ identities confidential, Liquid I.V. is trumpeting the ‘A-List’ nature of its backers.

The new investors in this latest round include TQ Ventures, a group led by SB Projects Founder and entrepreneur Scooter Braun; international music producer, Kygo and his manager, Myles Shear; and Adam Eaton, a professional baseball player with the Washington Nationals.

Liquid I.V. founder and CEO Brandin Cohen said the interest on the part of these investors has been generated not only by the brand’s potential but also by its performance to date.

“We have been growing very quickly over the past 18 to 24 months,” Cohen told NutraIngredients-USA.

“CircleUp is really best in class for consumer products, and we are excited to work with some of our new partners who can help us scale the business,” Cohen said.

Among the new investors Braun in particular has been noted for his promotional genius, whose successes include turning a singer who was posting cover versions of popular tunes on YouTube into the phenomenon known as Justin Bieber.

“And CircleUp has a network in the space that can really help with distribution,” Cohen said.

Sustainability, social responsibility messages

Liquid I.V.’s products are packaged in single serving packages and sachets. This plays into the brand’s sustainability message as it gets around the debate about plastic bottles ending up in the oceans. And it lowers the brand’s carbon footprint, since the company is not engaged in shipping large quantities of water to its consumers, Cohen said.

“Most of our consumers use reusable canisters to mix up our product. Obviously that’s a lot more sustainable. And it helps the economics of getting the product to the consumers a lot,” he said.

Liquid I.V., which is based in Marina del Rey, CA, has a charitable aspect to its marketing as well. The company says it will donate one serving of the product for every purchase on the company’s own website as well as on Amazon, where it was a top seller in the sports beverage category. The company has distributed free products in places such as Haiti and Uganda as well as helping to hydrate firefighters battling California’s wildfires last year. Cohen said the company will have donated more than 500,000 servings by the end of 2018.

In addition to Amazon, the company’s products are also being distributed in Whole Foods Market, Costco, GNC, CVS, Vons, Albertsons, Safeway. Nationwide launches in Kroger stores and in the Hudson News airport chain are planned for later this year.