- CAVU Venture Partners has completed a $7 million Series B investment in kombucha maker Health-Ade.
- Health-Ade makes kombucha, a probiotic fermented tea, using cold-pressed juices from organic produce. Already sold in 3,000 stores nationwide, Health-Ade plans to use a large portion of the investment to fund construction of a new production facility in Torrance, CA, which will enable the company to keep up with increasing demand.
- CAVU focuses its investments on better-for-you food and beverage companies with high growth potential.
Kombucha, which is considered a functional beverage for its high levels of probiotics, is becoming increasingly popular in developed nations like the U.S. and countries in Europe. Kombucha's annual sales increased by nearly five times from 2013 to 2015 to about $600 million, according to Markets and Markets. The research firm predicts that revenue will jump to $1.8 billion by 2020, growing at a CAGR of 25% from 2015 to 2020.
In January, CAVU raised $156 million in its debut fund. It's not surprising that an up-and-coming beverage brand would be among CAVU's early investments considering the partners' collective experience in beverages. That includes former Coca-Cola executive and developer of Vitaminwater Rohan Oza but also partner and beverage entrepreneur Clayton Christopher of Deep Eddy Vodka and Sweet Leaf Tea.
Health-conscious consumers are buying less soda and looking for alternatives. The varied flavors and bubbles kombucha offers, in addition to its health benefits, position the fermented tea as a promising choice for investors looking to compete with soda.