By Lynda Kiernan, Global AgInvesting Media

Kitu Life, the name behind the popular better-for-you cold brew and creamer brand Super Coffee, has raised $25 million through a funding round led by Skyview Capital, achieving a valuation of $200 million. 

Additional investors that participated in the round include Acronym Venture Capital; Echo Capital Group; Baron Davis, an early investor in Vitaminwater; Rx3 Ventures, the investment fund of Green Bay Packers quarterback Aaron Rodgers; Anthos Capital; actor Patrick Schwartzenegger; Denver Nuggets player Mason Plumlee; and ZX Ventures – the venture arm of Anheuser-Busch InBev SA, which also signed a distribution agreement with the company to distribute its products across the U.S. 

“We’re excited to be a part of their story and support them on the next stage of their journey,” Tom Allison, ZX’s head of investment strategy and M&A, told Bloomberg in a statement. 

Kitu Life was founded in 2015 by three brothers – Jim, Jake, and Jordan DeCicco, who launched Super Coffee as a better-for-you alternative to the high sugar content in conventional ready-to-drink coffees. Currently, the company’s product line includes Super Coffee and Super Creamer, and Super Espresso – low-calorie, plant-based offerings that when sweetened, are sweetened with monk fruit instead of sugar.

Since 2016 sales for the company have at least tripled each year, touching $26 million by 2019 – representing a trend that is expected to continue with Kitu Life on pace to see revenue of $70 million in 2020 and  $150 million in 2021. 

WeWork was an early investor in the company, buying in in 2017 when WeWork’s CFO at the time, Artie Minson, met Jake DeCicco at an event. WeWork exited the startup as part of this latest deal, realizing an ROI of 20X.

The capital gained through this round, of which Skyview committed $6 million, will be used by Kitu Life to expand its team and to expand its distribution from its current 20,000 U.S. stores including Walmart, Whole Foods, and Wegmans.

 Sweet Beans

Kitu Life’s business strikes at two consumer trends with rapidly growing traction.

The cold brew market was valued at $339.7 million in 2018, according to Grand View Research, and is expected to grow at a CAGR of more than 28 percent, or by $1.1 billion between 2020-2024, finds Technavio. 

The second is sugar reduction.

Driven by the trend toward a more healthy lifestyle and diet, consumers have targeted sugar as a key ingredient to reduce or eliminate from their food choices. A poll conducted on January 15, 2016 by Reuters/Ipsos found that 58 percent of adults surveyed responded that they attempted to reduce the sugar content in their diet within the past 30 days – reflecting a higher percentage compared to the percent of consumers trying to reduce calories, or fat, salt, cholesterol, or carbohydrates.

However, as much as consumers want to reduce the sugar in their foods and beverages, they are also turning away from artificial sweeteners – making monk fruit an appealing alternative sweetener. 

With such growth prospects on the horizon for cold brew coffee, major global CPGs, investors, and startups alike are positioning to secure a footing in the coffee market. For instance, Coca-Cola spent $5.1 billion to acquire Costa Coffee in 2018, and Nestle doled out $425 million to acquire a 68 percent stake in specialty California-based coffee roaster and retail giant, Blue Bottle Coffee. 

Boulder Investment Group Reprise (BIGR Ventures) led a $ 17 million Series B for Austin-based High Brew Coffee – a maker of natural, low-calorie, ready-to-drink, cold brew coffee beverages; and Califia Farms, maker of almond milks, dairy-free creamer, oat milks, dairy-free probiotic yogurt drinks, and Nitro cold brew coffees raised one of the largest rounds in the natural foods sector, closing on a $225 million Series D led by the Qatar Investment Authority (QIA).

 

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.