Soylent Acquired by Starco Brands
Publicly traded consumer products company Starco Brands, Inc. has acquired plant-based food and beverage maker Soylent, completing the brand’s evolution from red hot food-tech startup to cross-category CPG platform.
The California-based brand, best known for its eponymous meal replacement shakes, will continue to operate as an independent business unit within Starco with CEO Demir Vangelov remaining in his role alongside the brand’s 20-person team.
“Soylent is one of those rare brands that successfully transitioned from Silicon Valley tech start-up to mainstream with mass distribution, thanks to Demir and his team’s operational execution and a global mission to improve human health and nutrition,” said Starco Brands CEO Ross Sklar in a press release. “When combined with Starco Brands’ portfolio of formulas, access to commercial manufacturing facilities, and disruptive marketing, Soylent’s potential to grow its base and expand in adjacent category whitespaces will be game-changing.”
Founded in 2013 by tech entrepreneur Rob Rhinehart, Soylent sought to take a Silicon Valley styled approach to CPG with its line of powdered and ready-to-drink meal replacements. Inspired by an imaginary food replacement drink featured in the 1966 science fiction novel “Make Room! Make Room!” (best known for its more famous film adaptation, “Soylent Green”), Soylent aimed to provide a plant-based “complete nutrition” beverage that could successfully replace solid food through its blend of proteins, fats, amino acids and essential nutrients.
In addition to multiserve powders and RTD shakes, Soylent also produces a bar line – Soylent Squared – as well as a single-serve stick powder line called Flavor Boosts.
In 2020, Vangelov – who had been serving as Soyent’s CFO and COO since 2018 – was named CEO, replacing Bryan Crowley in the role. He had previously served as CFO and COO at plant-based milk and coffee brand Califia Farms and before that held the interim CEO position at Oberto Snacks.
“When I took over the company, we were losing money and not realizing growth,” Vangelov told Techcrunch this week. “On my to-do list when the board hired me was to think about the economics and fix the products to see if we could get back to growth.”
Over the past decade, Soylent raised over $113 million in venture capital from firms including Andreessen Horowitz, GV, Lerer Hippeau Ventures and The Production Board. Techcrunch reported the brand has a national retail footprint of over 28,000 doors, including Walmart, Publix, Target and Walgreens stores.
Last year, Bloomberg reported that Soylent was exploring a sale, citing a report that the brand was projected to surpass $75 million in revenue in 2022 – up 19% from 2021 – and was seeking an exit price of at least $225 million.
According to documents filed with the SEC yesterday, Starco will issue the former holders of Soylent Preferred Stock an aggregate of over 165.3 million shares of restricted shares of Starco’s common stock at and up to 18.5 million more shares based on final “calculations of Soylent’s working capital, cash at closing, indebtedness at closing and certain unpaid transaction expenses.” Additional shares will be issued if Starco’s stock price does not rise above $0.35 per share by the anniversary of the closing date next year.
Starco stock opened trading at $0.19 per share today.
The SEC filing listed eight Soylent stockholders in the agreement, including Hamilton Start, LLC; a16z Seed-III, LLC; AH Parallel Fund IV, L.P.; Andreessen Horowitz Fund IV, L.P.; GV 2016, L.P.; and The Production Board, LLC; as well as Vangelov and Rhinehart.
As part of the transaction, Vangelov has been named as a board member of Starco Brands.
“Starco Brands shares our vision of a world where every person can afford and access all the nutrition and calories they need,” Vangelov said in the release. “As global food insecurity increases due to climate change, supply chain shocks, and geopolitical conflict, we are confident that this partnership can accelerate our global scaleup and get our products to everyone on Earth who needs and deserves affordable, complete nutrition.”
Based in California, Starco Brands’ portfolio includes vodka-infused whipped cream line Whipshots and popcorn butter spray brand Winona Pure. Soylent is the third acquisition for Starco since September, when it acquired the Kobe Bryant-founded personal care brand Art of Sport, followed by its purchase of perfume company Skylar Body, Inc. in December.
