- Startup Verb Energy raised $3.5 million in a seed round led by Global Founders Capital, according to Food Navigator. Other participants were Nebari Ventures, Great Oaks, Supernode, FJ Labs and New York investor Kevin Ryan.
- The company is known for its energy bars made with oats, rice, quinoa, nut butters and organic green tea. Each bite-sized bar contains 90 calories and 65 milligrams of caffeine, about the same amount as an espresso.
- Some of the latest investors also participated in the company's $1.5-million pre-seed funding round. The company plans to use this new funding to hire more staff, develop additional energy products and expand its Verb Flex subscription program, which is based on text messages.
Verb's subscriber base has more than tripled during the past quarter. The company has experienced consistent 100% quarterly growth and anticipates a 1,000% increase in growth this year, Verb CFO Bennett Byerley told Food Navigator. That's big growth for any company, but especially for a startup launched in 2017 with a unique subscription style.
Consumers have responded favorably to Verb's text-to-order platform, which allows shoppers to text with a live person for interactions beyond basic order notification. Although there initially were questions about whether the company could sustain that level of human interaction as it scaled, Verb is now processing "millions of text messages annually," The Spoon reported.
These text messages can turn into two-way conversations with a customer experience team responding to "questions, dog pictures and other comments with a personal touch," Verb told The Spoon. The convenience factor is undoubtedly a big draw for some consumers, along with the ability to interact with a real person about customer service.
Verb isn't the only startup to use a text-to-order system. Dirty Lemon, a maker of bottled water containing charcoal and turmeric, also processes orders via text. Success with its commerce platform led to a $15 million seed funding round for its parent company Iris Nova late last year, which was led by Coca-Cola's Venturing & Emerging Brands unit. Given the success from the text platforms for both Verb Energy and Dirty Lemon, more companies might be looking to implement similar programs.
But Verb is also looking to expand its portfolio. Byerley said the company plans to introduce some new healthy energy products in the near future, but he didn't share any details. It's possible the company is developing other combinations of nuts, grains and green tea. It may also be considering expanding beyond the bize-sized bar concept to additional forms of energy products.
Energy bars and products have been a major growth segment in the U.S. for several years. The market for energy drinks continues to expand with more M&A and developments from different companies. And granola, protein and meal replacement bars dominated snack sales growth from 2013 to 2016, according to Nielsen. Bars containing caffeine have been showing up more often lately and present an alternative, better-for-you snack for those wanting a pick-me-up without a cup of coffee.
Verb's competitors in the caffeinated snack bar space include small operations like Better Than Coffee, Eat Your Coffee, Julian Bakery, Vibe Energy Bar, Awake Energy and Pro Bar. It's also competing with big player RXBAR, which was acquired by Kellogg for $600 million. These products range from 5 to 100 milligrams of caffeine per bar and contain between 90 and 210 calories each.
While it's clear that energy bars containing caffeine have an audience, it's less clear whether any other companies are going to try the text-to-order system Verb has implemented. It certainly helped that the company was able to scale the platform. If others are able to develop and build something similar and have it work out as well, it could be the future of customer service.