Millennials-led e-commerce CPG platform, The Naked Market, has raised $27.5 million in a series A round led by Hong Kong-based Integrated Capital, to continue expanding its better-for-you food and beverage offerings through in-house brand incubation and acquisitions.
The announcement of the raise, which is a mix of debt and equity, came shortly after the company launched Rob’s Backstage Popcorn through a recent joint venture with the Jonas Brothers — part of its burgeoning strategic brands business specialized in creating partnerships with personalities and influential tastemakers that The Naked Market promises to double down on moving forward.
Launched in 2019 by three friends, Harrison Fugman, Alex Kost, and Tim Marbach, over their shared love for food and displeasure with the lack of healthy options on the market, The Naked Market has developed five different brands in various categories, including ready-to-drink Project Breakfast, crispy chicken snacks Flock, avocado-based puffs Avocrazy, and ready-to-eat smoothie bowl Beach House Bowls.
The goal from the beginning is to create a platform that allows the company to leverage its internal technology “The Machine” to quickly identify high-growth sectors by gathering 15 million data points from Shopify, direct customer feedback, Amazon
Brands Development And “Opportunistic” M&A
The technology also helps The Naked Market become a strong rivalry with large CPG incumbents currently falling short on R&D investments and go-to-market efficiency in the long run.
“In the next three to five years,” Fugman said, “we want to build a portfolio of better-for-you food and beverage brands that are household names across the U.S., and really become the next Nestlé for future generations.”
The San Francisco-based firm’s near-term plan is to continue building upon its momentum – a whopping 400% growth rate in 2020 – by launching six new brands in the first half of 2022, including a plant-based snack and a better-for-you candy, and pursuing “opportunistic M&A deals,” according to Fugman.
Retail partnerships underway will also help boost The Naked Market’s overall revenue, over 90% of which currently comes from e-commerce, he adds.
“Retail is a very small piece of the equation,” Fugman said. “As we think about growth plans in 2022, you’ll start to see retail become a much bigger part of our growth story — that’s also part of where we’ll be using our newly raised capital for.”