Cereal maker Magic Spoon scoops up $85M as it lands spot on Target shelves

Magic Spoon, the maker of better-for-you cereals, secured $85 million in Series B funding as three of its brands make the jump from direct-to-consumer-only offerings to Target store shelves for the first time.

HighPost Capital led the new round, which brings Magic Spoon’s total funding to date to $100 million. HighPost is joined by Siddhi Capital, Coefficient Capital, Constellation Capital, Carter Comstock and a bevy of celebrity investors, including Shakira, Russell Westbrook, Halsey, The Chainsmokers, Amy Schumer, Odell Beckham Jr. and Nas.

Co-founders Gabi Lewis and Greg Sewitz started New York-based Magic Spoon in 2019, creating cereal flavors like Fruity, Cocoa and Peanut Butter, but with better ingredients, zero added sugar, high protein and low carbs, as well as gluten free and keto-friendly.

Those three flavors are the first among Magic Spoon’s eight flavors to go into 1,300 Target locations beginning Monday.

The pair declined to share hard numbers to support the company’s growth, but did say that Magic Spoon’s products have reached more than 1 million customers in the past three years.

And, while it has mostly been a direct-to-consumer brand, Lewis says adding retail was part of the plan all along.

“The plan was to grow the business as fast as we can and layer in new things over time,” Lewis told TechCrunch. “We wanted to do one thing at a time, do it well and then move on to the next one. We started with our website, then Amazon, with the goal of layering on additional channels to grow in new and different ways. Now we are ready to lean into retail and go onto shelves.”

In fact, Lewis and Sewitz have always planned to launch products away from the cereal box. Sewitz said he couldn’t go into more detail at this time as to what other products are in the pipeline, but Magic Spoon has a line of limited-edition cereal bars, which will become permanent members of the product line this month.

Gabi Lewis Greg Sewitz Magic Spoon

Magic Spoon co-founders Gabi Lewis and Greg Sewitz. Image Credits: Magic Spoon

Magic Spoon is not alone in tackling a healthier version of breakfast. They are among companies like OffLimits and Crispy Fantasy in cereal and Kreatures of Habit and Yishi in the oatmeal space. Some have also gobbled up venture capital dollars as they grab a piece of a breakfast cereals market poised to be valued at $51 billion by 2028.

When asked who they think their competitors are, Lewis and Sewitz say they don’t technically think of themselves as competing against just cereal brands, but with breakfast and snack brands, as a whole, for the right to be at the kitchen table.

The new capital injection positions Magic Spoon as “very well capitalized with its retail launch,” Sewitz said. He noted that investments will be made in growth and adding talent to scale up around logistics, customer service and growth marketing as the company balances both DTC and retail.

The company currently has 41 employees, up from 20 a year ago, and has about a dozen open jobs on its website. With the expansion of its sales channels, it made the move to bring in Rachelle Lynch as head of sales in March to lead that department and work alongside the digital team to build that business, Lewis said. Lynch previously held sales roles at Mason Dixie Foods, Hu Products and Jeni’s Splendid Ice Creams, according to her LinkedIn profile.

David Moross, co-founder, chairman and CEO of HighPost Capital, said in a statement that, “In a short period of time, Gabi and Greg have built a tremendous brand with a fiercely loyal and engaged consumer base through their unwavering commitment to innovation and creativity. We look forward to leveraging HighPost’s deep consumer sector expertise to support Magic Spoon’s continued growth.”

Kaszek leads Z1’s latest round as it develops its bank app aimed at LatAm teens

Z1, a Brazilian neobank focused on offering digital accounts and a linked prepaid card to teenagers and young adults, secured $10 million in Series A funding just six months after taking in $2.5 million.

Co-founded in 2019 by João Pedro Thompson, Thiago Achatz, Mateus Craveiro and Sophie Secaf, Z1 developed a digital bank app aimed at helping Brazilian and Latin American teenagers become more financially independent.

Since the last raise in April, the company’s revenue grew 26 times and continues to do so at almost 40% per month, CEO Thompson said via email. Z1 also grew its customer base by eight times during the same time at a rate of 30% per month.

Kaszak led the latest round and was joined by existing investors MAYA Capital, Homebrew, Clocktower and The Chainsmokers. Going after new capital so soon was not on the company’s radar, Thompson said.

“Our plan was to raise again early next year, however, Kaszek reached out to us in July and convinced us to anticipate our Series A,” he said. “From the outset, it was clear they would be the ideal partner for us in the next phase of the company, and that we would benefit greatly from having them onboard.”

The new capital will enable Z1 to increase its employees in areas like engineering, product, marketing and customer experience, with plans to go from 60 to over 100 within the next three months. That additional manpower will provide support as the company aims to grow 10 times over the next 12 months and add new features to enhance the financial inclusion and literacy of customers.

Along with the announcement of the new funding, the company also said it would begin to offer its core banking experience for free. It had been charging a monthly subscription fee of $2 per month.

Thompson attributes some of Z1’s growth to the fact that a year ago, the Brazilian Central Bank launched PIX, an instant payments system where individuals and organizations can send and receive money instantly through an identification number, phone number or email for free, a service that he likened to “a government-built version of Venmo.”

Since PIX’s launch it is estimated that 105 million people, about half of Brazil’s population, registered to use it, Thompson said. He called it “a key enabler of financial inclusion, as many people have entered the formal economy because of it.”

“PIX use among Gen Z (and consequently Z1 users) is higher than that of older generations, as the convenience and social aspect of sending and receiving money through PIX have been heavily explored by younger users,” he added.

Monica Saggioro, co-founder and partner at MAYA Capital, said via email that her firm doubled down on its investment in Z1 for a number of reasons, including that Gen Z is a growing, yet underserved market, and the firm believes there is great value in serving it well with dedicated products to their needs.

What she says many banks are trying to do is solve too many things at the same time, and that results in solving none of them very well. Instead, Z1 is uniquely positioned to serve the Gen Z population and evolve with its customers, and she has yet to find another company with a similar proposition.

“JP and Thiago were entrepreneurs-in-residence at MAYA, so we have been able to see them take Z1 from scratch and gain significant traction,” she added. “We are impressed with their capacity to envision, execute and attract top talent, which make a perfect combination of qualities we look for in founders.”

“Generation Z is already the largest generation in the world today, representing about 30% of the Brazilian and world population,” added Kaszek partner Nico Berman in a written statement. “Whoever can understand and capture this generation’s preferences now will reap the rewards in the coming years and decades. We believe the Z1 team is uniquely positioned to do that given their true purpose and deep understanding of this new generation of consumers.”

Owner.com serves up $10.7M so that independent restaurants can get cooking

Independent restaurants don’t typically have the luxury to create their own online food ordering and delivery capabilities or negotiate for lower rates from legacy ordering platforms like the large restaurant chains do.

Here’s where Owner.com comes in. The Beverly Hills-based company provides a free online ordering, delivery and marketing platform for independent restaurants that puts them on similar playing fields with the big guys. And unlike the legacy food delivery services, Owner.com restaurants own their customer data and can automate marketing campaigns.

Adam Guild is the company’s 21-year-old co-founder and CEO, a high school dropout and a Thiel Fellow, who originally started by assisting his mother’s dog grooming business that was having difficulties attracting customers. After stepping in with some online marketing methods, her business grew, and later expanded into multiple locations. Guild then wanted to work with a bigger group of people and stumbled across restaurants while helping some clients create online landing pages.

With consumer demand shifting to primarily online ordering and delivery over the past 18 months, online ordering revenue is expected to double from $248 billion in 2020 to $449 billion by 2025. Ordering platforms like Doordash, Uber Eats and Grubhub control 80% of orders and typically charge between 20% and 30% per order to restaurants and additional fees to consumers.

In contrast, Owner.com is free for restaurants and charges customers a flat $4 fee when they order from the website. Guild explained that larger restaurant chains have the buying power to negotiate lower rates, while independent restaurants do not. With the inability to keep up, some 110,000 restaurants in the U.S. closed in 2020.

Guild initially bootstrapped his company, working with large restaurant chains, like P.F. Chang’s, drive online orders. Then the global pandemic hit. He ended up losing all of his revenue and had to let all of his employees go but one. To add to his bad luck, he was then rejected from Y Combinator and other accelerator programs.

“For the first three days, I was depressed,” Guild told TechCrunch. “I had spent two years building a company and now it was dead. In the same way we were disrupted, I began to think there was no better position to be in than a scrappy startup. I didn’t know what the next business would look like, so I started cold-calling restaurant owners, asking how I can be helpful and what type of technology they were looking for. Many of them told me that online ordering sucked, but if they didn’t solve it soon, they would go out of business.”

One pivot and a year later with co-founder Dean Bloembergen, Owner.com closed on $10.7 million in seed funding led by SaaStr Fund, with participation from Redpoint Ventures and Day One Ventures, as well as a group of individual investors including Naval Ravikant, CNBC’s The Profit host Marcus Lemonis, The Kitchen Restaurant Group’s Kimbal Musk, DoNotPay founder Joshua Browder, Figma founder Dylan Field, The Chainsmokers and independent restaurant owners and customers of Owner.com.

Jason Lemkin, founder of SaaStr Fund, said restaurant SaaS was a space in which his firm was interested in investing, but thought it was a bit boring — there were already quite a few vendors in the space, like Toast and Grubhub, and most were just technology solutions. However, when he heard that Owner.com was a break-out company from the monotony, he said he had to take a look.

“The ability to own the customer relationship is that ultimate differentiation,” Lemkin said. “Their ultimate goal is to provide a robust technology platform to increase margins, have people order more and come back often.”

Meanwhile, Guild intends to use the new funding to continue product development and add new features like landing pages, the ability to make reservations and native apps for white-label service.

Since the launch last year, the company has reached a seven-figure run-rate and over 105% monthly revenue retention across over 700 restaurant locations, Guild said. To date, Owner.com has transacted over $18 million and helped its restaurant customers avoid paying $3 million to online order platform fees annually.

“It’s all about empowering the 40% of the restaurant industry that is run by people who started off in entry-level positions, and over the years, worked their way up to own the ‘American Dream,’ ” he added.


Russell Westbrook, Chainsmokers join group pouring $13.5M into prebiotic soda brand Poppi

Poppi, a prebiotic soda brand, closed $13.5 million in a Series A2 round and is on a mission to lead in the new category of “functional soda” by offering a better-for-you product that also tastes good.

The investor group includes CAVU Ventures as well as sports and entertainment celebrities like Russell Westbrook, the Chainsmokers, 24kGoldn, Kygo, Halsey, Kevin Love, Ellie Goulding, Olivia Munn, Nicole Scherzinger, Chantel Jeffries, Bryce Hall, Noah Beck, Josh Richards, Griffin Johnson and Blake Gray.

Husband-and-wife co-founders Stephen and Allison Ellsworth, former oil and gas researchers, launched the soda in 2020 after Allison Ellsworth began having stomach issues about two years prior. She went to doctor after doctor without a definitive diagnosis and decided to take to the internet to find some answers. She not only found that 80% of our body’s immunity stems from gut health, but that she could assist by healing her body through food.

One of the foods that helped with the stomach issues was apple cider vinegar, but drinking it straight everyday became difficult for her. So she went into the kitchen and began concocting a drink that would help her tolerate the vinegar and be tasty enough to drink regularly.

What resulted was a drink that eventually became a hit at a Dallas farmers market, which is where the pair was approached to sell Poppi in Whole Foods Market. They then decided to quit their jobs and do Poppi full time, even gaining a deal from CAVU Ventures co-founder Rohan Oza on Shark Tank in December 2018.

Each can of Poppi includes approximately a tablespoon of apple cider vinegar, sparkling water, real fruit and plant-based sweeteners mixed into a formula that provides a balance of gut-friendly prebiotics known to aid in digestion, immunity and glowing skin.

The drinks retail for $2.49 per can and come in nine flavors like watermelon, strawberry lemon, raspberry rose and orange. They are available in over 7,500 retail locations, including Target, Safeway, Kroger, Publix, Whole Foods and Amazon.com.

Allison and Stephen Ellsworth, Poppi co-founders. Image Credits: Poppi

Now the Ellsworths say they are receiving comments from consumers who say Poppi has “changed their lives.”

“At the end of the day, we are putting out a product that is healthy and tastes good,” Allison Ellsworth said. “We don’t want to be a niche health product — that is secondary to what we are trying to do, but it’s a bonus that we get that, too.”

Another bonus is that within the functional soda category, which has grown 465% year over year based on data from research company SPINS, the Ellsworths boast their annual growth put Poppi in the No. 1 spot based on four-week data from SPINS ending June 13, 2021.

Prior to the round, the company was bootstrapped. Proceeds will be used to expand distribution, scale Poppi’s team of 50 currently and marketing. The company is based in Dallas for now, but Allison Ellsworth said the company is moving its headquarters to Austin.

The company grew its revenue 550% year over year and the funding assists in giving Poppi a burn rate of 12 months and the ability to continue in high-growth mode, Stephen Ellsworth said.

Stevie Clements, chief brand architect at CAVU Ventures and a member of Poppi’s board, said via email that the company’s product, founders and growth to date were the drivers for her firm to invest in the company.

In addition, people are looking for products like Poppi that do more for them, while gut health, in particular, is a highly relevant category. The company’s ability to “deliver real function with incredible flavor is unlike anything on the market,” she said.

“Soda is a massive category ripe for disruption, and Stephen and Allison are a great team with an authentic story that’s really proven to resonate with people,” Clements added. “We’re excited by what Poppi has accomplished thus far and feel strongly that a better-for-you soda that tastes amazing and offers real function can shake up the multibillion dollar soda category.”


With investors like Lightspeed and The Chainsmokers, Mexican neobroker Flink raises $57M to boost financial inclusion in LatAm

Flink, a Mexico City-based neobroker, has raised $57 million in a Series B round of funding led by Lightspeed Venture Partners.

The financing comes just over six months after Flink raised $12 million in a Series A round led by Accel. Existing backers Accel, ALLVP, Clocktower and new investor Mantis Venture Capital (founded by The Chainsmokers) also put money in the Series B. Since its 2017 inception, the startup has raised nearly $70 million.

Neobrokers are defined as startups that are disrupting the investment industry by providing a platform for a wider range of consumers to partake in the stock market by offering them more incremental investment options and modern and easy mobile-based interfaces to manage their money. There is a growing number of them globally, including Scalable Capital, Bitpanda and Trade Republic in Europe.

For Mexico City-born Sergio Jiménez Amozurrutia, the fact that in his country of more than 120 million people, only a tiny fraction of the population has the ability to invest in the capital markets felt unfair. To him, the lack of widespread participation in investing is an example of the rich getting richer as part of an infrastructure “that is built for the wealthy.” The result of the imbalance is that a lot of people have historically been locked out of making potentially wealth-building investments.  

So after selling Easy Credit, a consumer lending platform he’d built with Rick Rafael Bueno (whom he met in 2015 at a hackathon at Tech de Monterrey), Amozurrutia set out to give Mexicans access to something he believed they’d never had access to: an app-based consumer trading platform.

Flink launched its app in 2018 with a wallet service, a digital and physical global debit card backed by Mastercard and, last year, it began offering the ability to buy and sell fractional shares from 30 pesos, without commissions, for NYSE-listed stocks.

“Users can invest as little as US$1 and with zero commissions,” Amozurrutia said. “We want Flink to be the easiest way to invest, save and use your money.” 

Image Credits: Lightspeed’s Mercedes Bent and Flink founding team / Lightspeed

The demand for what the startup has to offer is clearly there. Since launching its first brokerage product in July of 2020, Flink has 1.6 million users, up from 1 million users at the time of its February raise. Over 85% of its users are first-time investors. GenZers seem to be the most interested in investing — 27% of the app’s clients are between 18 and 25 years old, while 22% are millennials, execs say.

“Most legacy Mexican banks cater to less than 1% of the population — meaning most Mexicans don’t have a bank account, let alone a brokerage account,” Amozurrutia said at the time of the company’s last raise. “At Flink, we’re guided by the belief that Mexico’s financial system should work for everyone — not only a select few.”

The company is growing its user base by 38% per month and revenue by 31% per month, according to  Amozurrutia, and touts a user acquisition cost of 62 cents. It is currently the largest retail brokerage service in Mexico, he said. Flink has 110 employees, up from 25 people a year ago today.

The startup plans to use its new capital to keep growing its team, toward product development and to expand its service to different countries in Latin America.

“The lack of access for retail investing is all over LATAM, and at Flink we want to change that,” Amozurrutia told TechCrunch. “We are focused on offering the opportunity to invest and grow their money to everyone in LATAM.”

Lightspeed Partner Mercedes Bent said her firm “fell in love” with Flink’s mission and impact on the country’s “financial ecosystem.” It was also impressed by the company’s unique features, including allowing Mexican investors to access the U.S. stock market and invest fractional shares.

“Many equities platforms only let you invest in equities in your own country,” she said. “Flink also has a big focus on education and creating an investment experience that makes it easy for their users to onboard.” For example, Bent noted, Flink has a podcast dubbed “Finanzas en órbita” that provides financial and stock market education in México.

In a blog post, Bent and Will Kohler wrote that they could feel the company’s passion and vision for creating more financial inclusion in Mexico, even via a Zoom call.

“The excitement leapt through the video screen,” the pair wrote. “…Flink’s vision for the future goes beyond accessing stocks, and we wanted to be a part of it.”

Flink marks Lightspeed’s third investment in Mexico, alongside Stori and Frubana, and Bent and Kohler say there is “more to come.”

“We are big believers in México, and bullish on LATAM,” they wrote.