Investor proposal
Strong consumer acceptance, resonance with leading influencers, and strong global interest in distribution all contribute to positive growth.
Volume in Sweden alone has grown by 1500% in the last year. In our conservative forecast, we only assumed a 50% CAGR5—the basis for our valuation.
Our capital-light, scalable business model—built on world-class outsourced supply chain and distribution network—combined with strong retail acceptance and increased store listings make us poised to greatly increase volume.
We anticipate profitability in Q2 2019. Exit plans, within 5-7 years, include acquisition by a larger FMCG company.
Product
The problem this product solves
It’s no secret that stress is a big deal these days: stress is a significant challenge in people’s lives. Nearly 80% of adults report experiencing at least one symptom of high stress within the last month, and are actively looking to address this problem with the products that they purchase.
How the product solves it
Our first product line, Relax & Focus, is the result of cutting-edge scientific research and millenia-old traditions: a beverage with functional botanical ingredients which, based on extensive scientific research, has been shown to promote specific health benefits--primarily reducing stress and increasing focus. Free from preservatives and artificial sweeteners but still low-calorie and caffeine-free, NOA relaxes without causing drowsiness. Office-friendly and ideal to consume on-the-go or on the-clock, NOA is available in three flavors--all natural and inspired from the Swedish wilderness: Blueberry & Birch, Elderflower & Rhubarb, and Wild Apple & Gooseberry. Our next flavor is ready for launch.
Product features
The active ingredients are lemon balm and green tea extract. Both have well-documented physiological and psychological effects.
The green tea extract contains the amino acid L-theanine, which many studies have demonstrated has a significant calming effect, while simultaneously improving concentration and memory functions. These include stimulating alpha brain waves most commonly associated with meditative states. Physiologically, this extract has been shown to decrease blood pressure and maintain a healthy resting pulse rate.
Lemon balm, used in traditional medicines for its calming effects and contributions to mental well-being, can (as one publicized report revealed) improve your overall cognitive function.
Product use cases
Our product is meditation in a bottle: focused on providing on-the-go customers with a short break in their hectic lives.
Existing customer response surveys demonstrate that consumers are attracted to the drink's flavors, the award-winning bottle design, and its functional health properties.
Team
Noa Fridmark
CEO
Former management consultant, specializing in brand strategies at LynxEye with clients such as Carlsberg and ABSOLUT. Start-up experience with very strong profitable international expansion and stock market listing.
Carl Ivarsson
International Business Development Director
International management experience rolling out consumer brands in Europe, Asia and the Pacific, including work with Electrolux and Thule. Establishing new businesses in new distribution channels.
Nina Gillsvik
CMO
Held category- and brand management roles at Unilever, then worked 11 years for Absolut Vodka, built the brand in Latin America and responsible for the Absolut brand globally. Advanced to lead the Absolut Company's global innovation department.
Anders Stensson
CFO
Anders brings 20+ years of CFO experience, from strong international growth as well as consolidation of business to improve profitability.
Krister Asplund
Board Member
Spent the last 21 years as VP of Operations at Absolut Vodka. Krister still considers himself to be 50/50 marketing/production.
Choon Seng Tan
Board Member
Ex Group CEO of WBL, a large group listed in Singapore with subsidiaries listed in US Nasdaq. Ex Managing Director of Hewlett Packard SEA. Currently Chairman of Truscott and co-founder of several companies in Asia.
Daniel Daboczy
Board Member
Founder and CEO of FundedByMe, the leading crowd-funding platform in the Nordics.
Richard Törnblom
Board Chairman
CEO of LynxEye Brand Consultants, creating brand strategies for global companies such as Carlsberg, Absolut, Spotify, Volvo etc. Retail experience from ICA, Coop, Axfood among others.
Mark Drewell
Board Member
Spent 10 years as group executive at Barloworld, a 6 billion USD revenue company, employing 35,000. Mark sold and bought, on average, one company per month. Led The Globally Responsible Leadership Initiative as CEO.
Olle Lundin
Board Member
Brilliant entrepreneur with experience as chief legal officer for various companies, most recently at Zmarta Group, a market leading financial services provider.
Market
Target Market
NOA has already seen strong consumer acceptance of its products within its markets. One report showed that for every thousand people trying NOA, 570 reported they were likely to recommend it to a friend, and 390 were more likely to buy more. NOA has a 39% higher purchase intent among consumers than the average similar product launch.
These figures are clear: we know consumers like our product. Investing in NOA means you are invested in a product that has been proven to be popular among consumers.
Competitive landscape
Compared to all other categories, enhanced water is the fastest-growing beverage category, with a 9.5% 5-year compound annual growth rate.
As a whole, the functional beverage category is not uncrowded. However, the entire segment has experienced year-on-year growth and, unlike other beverage categories, the field is not dominated by two or three incumbents, but on a more diverse selection of offerings.
Current market analysis shows NOA's market position as more healthy and natural compared to competitors. In addition, the company's award-winning salient packaging is consistently cited as a significant purchase decision point for consumers.
Unique differentiator from competitors
Relax & Focus was designed to deliver on key category attributes that were ranked as the most important among our target group. These include:
- natural active ingredients, flavors and coloring
- no preservatives (but an 18-month shelf life!)
- low sugar and caloric count
- salient, award-winning packaging
Besides the product's competitive strength, NOA is also uniquely positioned to take market share with its top management team and board of directors, both of which have deep beverage industry experience. The company has also built a scalable and capital-light outsourced business model, including agreements with world-class beverage distributors and suppliers.
Company revenue streams
Based on existing channels, NOA reports a total quarterly average revenue growth of 73%, with Sweden alone accounting for 40% of total revenue. In fact, the Swedish market showed a 1500% increase in Q3 2016, compared to the previous year's performance. An even greater exponential increase is anticipated as NOA moves forward with its 3-year roll-out strategy into Swedish supermarkets. 85-90% of total future volume within Sweden is projected to come from local supermarkets,
Note: Non-campaign sales projections from conservative forecasts are 4 bottles per day (8 for campaigns). We are currently seeing between 20-48 daily bottle sales.
Product/service distribution
NOA approaches new markets with a three-stage plan that builds the brand's value, and drives overall market penetration. This can be expressed as:
- In the first phase, typically low-volume, NOA targets trend-setting retail outlets and influencers.
- The second phase builds on volume by targeting convenience stores, catering services, vending machines, office cafeterias, gym chains, and health food stores.
- Finally, a wider scale rollout takes place, with an emphasis on supermarkets. Almost 90% of volume comes from these channels alone, and profitability is expected as per industry forecast standards.
Execution
Previous milestones/traction
To date:
- Over 2000 retail outlets worldwide
- A 1500% increase in sales volume from Q3 2015 to Q3 2016
- Available widely in convenience stores, and rolling out distribution in leading supermarket chains.
Previous Milestones:
- 2013 Q4: The NOA idea is born
- 2014 Q2: Product concept finalized and unveiled.
- 2014 Q4: First store deliveries take place; NOA wins "Best Premium Beverage" at WBIA
- 2015 Q4: NOA enters Harrods department store, as well as both Google and Facebook EMEA headquarters
- 2016 Q2: NOA is now distributed in 15 markets
Next key objectives
- 2016 Q4: Initial roll-out in Swedish supermarket chains
- 2017 Q1: New flavor launch for our Relax & Focus line
- 2017 Q2: the launch of a brand new product line
Previous Financing
To date, NOA has been financed through several equity rounds, including previous crowdfunded campaigns. In fact, we broke 5 crowdfunding records, including the fastest million SEK raised on FundedByMe.
Notable individual investors include Göran Lundquist, former CEO at the Absolut Company, Robert Grenmark, former General Manager of Red Bull Scandinavia, Robert af Jochnick, founder of Oriflame, and Peter Sjunnesson, former chairman at Klarna and CEO of Intrum Justitia.
Partnerships
We are in 16 markets around the world, with over 500 requests for further international distribution. Our partners are considered the best in their respective markets, and undergo a thorough vetting process.
Use of funds
We are currently seeking 20M SEK total. Alongside our FBM campaign, we are in dialogues with both angel investors and VC firms.
Our latest round of capital acquisition will be mobilized with three initiatives in mind
- expanding consumer purchasing contexts with a new market-responsive product line
- increasing our gross margins by reducing our production costs
- increase sales volume by focusing on Swedish supermarkets
To this end, raised funds will be allocated to the following key areas:
- supporting supermarket launches both internationally and in Sweden
- deepening our product R&D and innovation pipeline
- shoring up our operating liquidity
- expanding our existing capital buffer.
Industry Certifications/Awards
World Beverage Innovation Awards – Best Premium Beverage, November 2014
Business Challenge – Best Company, June 2015
Red Dot Award - Best Communication Design, September 2015
Pentawards – Gold Award for Best Functional Beverage Design, October 2015
World Food Innovation Awards – Best New Packaging Design, March 2016
Return on Investment
Our forecasts are based on two cases: a positive case and a conservative case.
Based on the conservative projections, we anticipate profitability in Q2 2019. In our positive case scenario, we could reach profitability as early as Q2 2018. Expected ROI is 5 - 22x initial investment in 5 years.
Our current valuation is based on the conservative forecast, which we are confident in achieving.
Tentative exits within 5-7 years include, but are not limited to, partial or total acquisition by a larger incumbent FMCG company.
Risk Analysis
Based on conservative estimates, the primary risks facing the company as NOA moves forward include:
- Macro-economic factors, including fluctuations in currency values and exchange rates
- Slowing revenue growth in established international markets
- Less-than-projected revenue growth in supported launches in select markets
- Outright failure in smaller markets
We will mitigate these risks through:
- Increase gross margins through production and organizational cost optimization
- Allocating funds to higher-performing markets with early traction
- Diversifying our product portfolio
- Maintaining a certain level of liquidity, with 20% of total raised funding during this round (including FundedbyMe, angel investors, and VC firms) earmarked as a buffer.