- Dissolvable tea startup Tea Drops has raised a $5 million Sequence A spherical led by shopper brand-focused enterprise capital agency BrandProject, based on a press launch emailed to Meals Dive. Different traders embrace Siddhi Capital, AF Ventures, Cue Ball Capital and Halogen Ventures. The spherical brings Tea Drops’ whole funding to $8.4 million.
- Tea Drops will use the brand new funding to make hires round ecommerce and operations. The corporate is on observe to fabricate 10 million Tea Drops this 12 months and has been named one of many quickest direct-to-consumer (DTC) manufacturers on Shopify after posting 350% year-over-year progress.
- Describing its product as natural “tub bombs for tea,” Tea Drops has a concentrate on moral sourcing, clear components and sustainability, with a format that goals to chop down on packaging waste. These qualities, together with its feminine management, have attracted traders’ curiosity.
Tea Drops is hoping to revolutionize the way in which the world consumes tea with its bagless dissolvable teas. That is as consumer demand for extra sustainable packaging has gained momentum even amid the pandemic. Along with creating waste, tea baggage have additionally been related to microplastics. A 2019 examine discovered that steeping tea contained in tea baggage at a sure temperature releases round 11.6 billion microplastics into the cup, which is a a lot greater degree in comparison with different drinks and meals.
A number of different manufacturers are advertising plastic-less tea baggage, together with PG Suggestions, Twinings, Teapigs and Numi Tea. Teatulia and Pukka supply teas in compostable packaging.
The dissolvable beverage house has additionally seen exercise, with gamers together with Nuun, which presents dissolvable hydration tabs and was just lately acquired by Nestlé; Austria-based Waterdrop, which is debuting its hydrating “microdrinks” within the U.S. this 12 months; and Coca-Cola Japan, which has launched a line of freeze-dried inexperienced tea and low cubes.
One other distinctive side about Tea Drops is that it’s female-founded and led. CEO Sashee Chandran shaped the corporate in 2015, and at this time greater than 50% of its traders are ladies. The corporate additionally claims to function a “female-forward” provide chain and make use of primarily ladies.
Feminine-led startups secured solely 2.3% of VC funding in 2020, based on Crunchbase knowledge. This has led some traders to make a stronger effort to hunt out female-founded startups to higher stability their portfolios. Tea Drops has additionally caught the eye of female-focused VCs like AF Ventures, which is a women-owned agency.
BrandProject is a becoming accomplice to assist take Tea Drops to the following degree. It has backed different profitable DTC manufacturers together with Freshly, a supplier of fresh-prepared meal supply providers that was later acquired by Nestlé; and purposeful components shake maker Every day Harvest. In an announcement concerning the Tea Drops funding, BrandProject Founder Andrew Black cited his agency’s curiosity in “extremely progressive companies working in massive addressable markets.”
“Tea is the world’s most consumed beverage, subsequent to water, and but the general class has lacked innovation in each expertise in addition to packaging,” Black mentioned.
Siddhi Capital has additionally backed a lot of DTC and beverage manufacturers resembling better-for-you cereal maker Magic Spoon; flavored water maker Trace; and Recess, a supplier of CBD-infused glowing waters.
A July 2020 report by Euromonitor discovered that tea gross sales within the U.S. suffered through the pandemic for loose-leaf and bagged varieties, hit by the shutdown of foodservice. It anticipated sales to drop 13% with ready-to-drink teas down 11%. That mentioned, natural teas have been outperforming the class as customers seemed for purposeful advantages.