Despite setbacks, Soylent drinks up $50 million in fresh funding
Soylent, a four-year-old, L.A.-based company that’s focused around what it bills as a meal replacement drink, has taken its licks in recent years, no pun intended. But a group of investors is betting Soylent’s best days are ahead of the company; they just provided it with $50 million in fresh funding in a round that brings Soylent’s total funding to $74.5 million.
GV’s Andy Wheeler — who focuses in part on GV’s food and agriculture-related investments — led the round and joins Soylent’s board of directors as part of the deal. Other participants in the new funding include Tao Capital Partners and earlier backers Lerer Hippeau Ventures and Andreessen Horowitz.
Silicon Valley is notorious for funding companies that are the subject of ridicule. Even still, this new funding may take some industry watchers by surprise.
From the outset, Soylent has been an easy target for people who enjoy food. When Soylent CEO Rob Rhinehart appeared on comedian Stephen Colbert’s show a few years ago, Colbert asked, “What was the inspiration for this? Did you see someone in a coma with a feeding tube, and you thought, ‘I’ll have what he’s having‘?”
Customers lost their humor last year when they became violently ill after consuming Soylent’s powder mix and protein bars. The company, which determined the cause was algae-based ingredients, quickly reformulated the powder. It has yet to re-introduce its bars.
Just last week, Soylent received yet more unwanted attention after issuing a voluntary recall. The reason, said the company; it discovered that a small amount of milk product may have slipped into some batches of one of its powders that’s advertised as free of lactose and milk products.
In a conversation with TechCrunch yesterday, Rhinehart said the company has learned from its mistakes and that it’s “gone a long way in improving our ingredient and supplier diligence.”
He elaborated, adding that Soylent, whose makeup is somewhat hard for the non-science-minded to decipher — along with modified food starch, its powder includes ferrous gluconate, thiamin hydrochloride, and 38 other ingredients — also feature new ingredients and a much “larger and robust quality team” to “make sure nothing like [its previous mishaps] happen again.”
Seemingly, the bad press hasn’t slowed down the company as much as one might think. Rhinehart wouldn’t discuss specific numbers, but asked about the company’s sales, he said that net revenue nearly doubled in the first quarter over the same quarter last year.
In fact, he said, the company has raised this large new round to fuel several new initiatives.
The first is getting Soylent into the hands of many more consumers by greatly expanding on where it’s available to buy. Whereas currently, Soylent shoppers buy its products at its site and on Amazon exclusively, Rhinehart said they will soon be available in grocery stores, convenience stores and “mass market” retailers. (We suspect he means Target and Cosco, but asked about this, he would say only that Soylent “is working on a number of partnerships.”)
Soylent — which currently sells its original powder, along with four flavors of drinks, including more newly cacao- and nectar- flavored products — is also going global, said Rhinehart.
And the 50-person company, which currently manufactures its goods at an “FDA-certified facility” in Missouri, will be seeking out back-up facilities where it can churn out even more of its products, assuming a newer, broader base of customers discover them on their retail shelves.
Asked whether those bars might make a comeback, or whether the company plans to take the wraps off any new products soon, Rhinehart — who says that he himself drinks “one to two” Soylent drinks each morning — said it’s currently is working on a number of “new innovations in product categories.”
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