Sugar-free soft drink pioneer Nexba is looking to grow beyond beverages after bagging at least $3.96 million in an over-funded and ongoing equity crowdfunding round, which smashed the minimum target by almost eight-fold.
Facilitated on equity crowdfunding platform VentureCrowd, the nearly $4 million raise makes up the first tranche of an approximately $9 million Series B according to Nexba co-founder Troy Douglas.
Speaking to Business News Australia, the co-founder said the funds will facilitate the expansion of Nexba’s new business called Goodsweet Group - a vehicle for the company’s proprietary and patented natural sweetener blend.
Ultimately, Troy and his brother-in-law Drew Bilbe - named in the 2021 Australia's Top 100 Young Entrepreneurs list - hope to launch this sweetener to the market soon, and use the IP to create new products beyond just drinks, potentially starting with baked goods.
The raise follows $6 million received as part of a Series A round in 2017, of which around $1.5 million came from a VentureCrowd-facilitated crowd-funding tranche.
The evolution and eventual launch of the Goodsweet brand has been a 12 year journey according to Douglas, who said the new brand’s launch is part of the co-founder’s mission to rid the world of sugars and artificial sweeteners.
“We’ve mastered this patent and blend of ingredients that replicates the taste of sugar,” Douglas said.
“Heading into the baking space makes a lot of space, but also even just simply having Goodsweet as a table sweetener.
“We want to scale impact by making more products and brands like Nexba powered by Goodsweet sweetener. That’s the next big focus for us. We’ve spent 12 years building a brand with Nexba, and we’ve learnt a lot as founders, so we want to build that platform even further.”
VentureCrowd CEO Steve Maarbani told Business News Australia that he was ‘bullish’ on Nexba, and excited by the IP Bilbe and Douglas had created with Goodsweet.
“The critical thing is that the market has realised that this is patented technology; this is not just another beverage company,” Maarbani said.
“What they’ve created is a naturally sugar-free sweetener formula which is patented, and what that means is they have a formula and an ingredient which replaces sugar without anything artificial. That might not sound like a big deal, but no one else has that - Pepsi doesn’t have that, Coke doesn’t have it, Nestle doesn’t.
“It can be used in all sorts of food and beverage products, and that’s the next stage of development for Nexba.”
Because of the health benefits that will result following Nexba’s breakthrough with Goodsweet, the CEO added that VentureCrowd investors were attracted to the brand’s proposition during this current crowdfunding round.
“Health is a key area for investors right now - they really care about things that are making an impact on peoples’ health and wellness,” Maarbani said.
“We’ve been very close to this business for some time, and we’ve had a longstanding relationship with Nexba - we’re really bullish on the brand.
“The current growth strategy is not just for channel expansion, but also for geographic expansion too. I think over the next 12 months you’re going to see a very different business.”
For Nexba, the international growth has been rapid since the brand’s entry into the UK in 2018, and is pegged to continue, driven by wins like securing core customer Sainsbury’s and expansion into wider grocery, convenience and food service channels throughout Europe.
This includes securing the top French retailer Carrefour as a distributor for Nexba’s kombucha line, as well as the signing of distribution agreements with retailers in Denmark, Norway, Sweden, Poland, the Netherlands, Finland and Ireland.
Further, a new Nexba natural energy drink has launched into leading retailers Holland & Barrett and Sainsbury’s for a total of 1,520 distribution points.
Nexba’s core UK distributor Petty Wood also came on board as a new lead investor for the Series B round.
“They’re our distributor for the UK - a 200 year old business - and it really gives us that proof from a market partner that Nexba is a brand that should be dominate over time in the UK,” Douglas said.
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