The founder and CEO of Lemon Perfect didn't know it yet, but his lemon water brand was about to go viral in 2020, thanks to an unexpected appearance of the Dragon Fruit Mango bottle in the door of Beyonc.
Hufnagel said that she was an authentic fan of the brand. A year later, one of our investors was in her house and saw her money in the fridge and helped build the bridge with her. It is beyond my imagination that someone of her influence is a fan of the brand.
The company announced Thursday that it has a $31 million Series A with a group of investors.
It was an easy decision to invest in something that tastes great.
Hufnagel was a college basketball coach for the University of Nevada, Reno when he started the company. Hufnagel was sent a draft of a book he was writing about the Keto diet, which included recipes for lemon water, after an unexpected encounter with a store owner who dreamed of being a coach.
After seeing his basketball players drinking Bai in the locker room, Hufnagel thought about taking lemon water and giving it the same foundation as Bai and to go after the enhanced water category that he thought was ripe for disruption. The market is expected to grow over the next five years.
Lemon Perfect is competing with drinks like Bai. It comes in a variety of flavors, including Beyonc's favorite Dragon Fruit Mango. The drinks have five calories, but no sugar or artificial flavors.
Hufnagel said that there is no flavor or health profile on the market today. It's rare that you can have a total addressable market.
Hufnagel said the Series A is a combination of an initial round and an extension. Lemon Perfect has $42.2 million in funding and a total valuation of over $100 million.
Two years ago, the company raised funding, but the driver for this new financing was growth. Hufnagel wants to reach more than 40,000 points of distribution by the end of 2022, which will require a large field sales team. It has its website, Amazon, and retailers across the country, as well as 25,000 points of distribution. In the summer, Lemon Perfect is going to launch in the warehouse club.
Hufnagel estimates that Lemon Perfect will do $60 million in retail sales in 2022, up from $25 million last year. He expects the business to more than double in revenue this year. The number of employees has gone up to 70 from 38 a year ago.
Beverage is an expensive game, and access to capital is the only way to drive a fast-scaling brand forward. We felt like we were able to drive great execution, but still have room to grow and build a big margin story.
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