75% of Americans suffer from dehydration. Hydrant is the consumer wellness brand offering single-use powder packages to restore hydration levels rapidly. Designed to be a morning mix, the packets come in flavors like grapefruit, raspberry lemonade, lime, and blood orange; each formulated with 11g of sugar or less. The company also offers caffeinated versions to replace your cup of Joe. All flavorings are from real fruit juice with no artificial ingredients. Hydrant is presently available to consumers online via a subscription or in-store locations like Whole Foods throughout the city.
AlleyWatch interviewed Cofounders John Sherwin and Jai Jung Kim to learn more about Hydrant, the company’s future plans, and recent funding round, which brings the total investment raised to date to $8.8M.
Who were your investors and how much did you raise?
Hydrant raised $5.7M in Series A funding, bringing Hydrant’s total investment to date to $8.8M. Coefficient Capital led this round with participation from Rx3 Ventures, who will be joining earlier investors Soma Capital and Sixers Innovation Lab, among other funds and angels including Jonathan Keidan of Torch Capital, Scott Norton of Sir Kensington’s, Michelle Cordeiro Grant of Lively, Jesse Merrill and Anders Eisner of Good Culture and Michael Cline of Fandango.
Tell us about the product or service that Hydrant offers.
Hydrant is a consumer wellness brand helping to bring proper hydration to the forefront of one’s daily routine in order to live a healthier lifestyle. With two product lines, Rapid Hydration and Caffeinated Hydration, which are both available in convenient single-use powder packages sold online in bulk or via subscription directly on the website, Hydrant makes the most effective and convenient electrolyte rehydration powder on the market. Hydrant contains the right balance of 4 essential electrolytes to hydrate you fast, with 7g or less of sugar per stick to further accelerate the hydration process. Hydrant is a better-for-you approach to recovering after a workout than the main popular options out there in the marketplace.
What inspired the start of Hydrant?
We started Hydrant to solve the problem of dehydration under the pressures of daily life. Jai was working long hours and pursuing his MBA, while I had been on the start-up grind in Silicon Valley using my background in biology from Oxford to try various approaches to defeat daily dehydration. Collectively, the coffee, energy drinks, and gallons of plain water weren’t good enough, so we came up with a better way. Our commitment to creating a better, science-driven hydration product is delivering a better-for-you solution across the country.
How is Hydrant different?
Backed by scientific research, Hydrant’s proprietary formula utilizes minimal ingredients to make it work fast and taste delicious for Americans to use throughout the day to stay hydrated. Hydrant prioritizes using natural ingredients and a reduced amount of sugar to create a real taste where possible, along with caffeine enhancements in some of its products to give consumers an extra energy boost. It’s important to us as a brand that we only include ingredients that make sense, nothing superfluous. We are removing the noise. Further, in a conscious effort to be more sustainable, our consumers are using less single-use plastic by adding Hydrant into reusable bottles and cups.
What market does Hydrant target and how big is it?
Hydrant targets the $28B global hydration industry and the $4.2T health and wellness category.
Who do you consider to be your primary competitors?
We see competitors in this space as other electrolyte replacement powders on the market and incumbent rehydration drinks.
What’s your business model?
We started out as digitally native but have moved into a more omnichannel model. Our products are available in convenient single-use powder packages, in bulk, or via subscription directly on the website. Major retail partners include Amazon and Whole Foods. Over the year, and depending on the retail climate due to COVID-19, we plan to expand into other mass grocery and vitamin retailers.
What was the funding process like?
While the fundraising process is never easy, we have had great support from investors who believe in the overall mission. We’ve been talking to our lead investor in this round for some time, even before we were raising. Through these conversations, we were able to be more like thought partners on how the business could grow. When the time came, we didn’t have a pitch deck or anything like that – the necessary information had already been discussed. The product and long-term goals really resonated with our investors, and our growth to date made a strong case.
When the time came, we didn’t have a pitch deck or anything like that – the necessary information had already been discussed. The product and long-term goals really resonated with our investors, and our growth to date made a strong case.
What are the biggest challenges that you faced while raising capital?
We didn’t run into this issue as much on our Series A, but we had difficulty finding investors that were aligned with our vision of the business. A lot of time, investors were very focused on following through the playbooks that they were familiar with. When we shared that we wanted to build an omnichannel business where we scale not only our DTC channel but also retail, they often would get really hung up on the traditional industry playbooks. A lot of times these investors would still show interest, but they would constantly ask what other Silicon Valley investors we were speaking with or which investors are participating in the round. Thankfully, Seth Berger from the Sixers Innovation Lab took a chance on us. He helped us focus on making the best decision for our business without blindly applying other successful case studies on our business.
What factors about your business led your investors to write the check?
There has been a major cultural movement towards holistic wellness and self-care, especially among today’s active and on-the-go consumer. While it’s always been our belief that hydration sets the foundation for a healthy lifestyle, the ongoing support from our investors and community has further demonstrated this importance and underscores the powerful effect that water has on wellness. Beyond this, our maniacal focus on bringing customers back, again and again was something that further set us apart from other companies in the DTC space and secured the deal.
What are the milestones you plan to achieve in the next six months?
With this influx of new capital, Hydrant will continue to provide better-for-you alternatives to the incumbent rehydration and caffeinated drinks on the market today, while working diligently to expand its team and introduce new hydration-forward products that infuse other premium functional use cases. Understanding the current movement towards preventative wellness rituals, Hydrant will also double down on product educational tools for both customers and non-customers that further illustrate the significance of hydration on the whole self.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Until the fundraising climate recovers, I would highly encourage these companies to focus on channels that have high return on invested capital (ROIC) or could generate positive cash flow. Unless you are an essential grocery item, opening new doors at a retailer could be difficult at the moment. I would first focus on activating your Amazon and build your cash balance through that channel, until you are ready to invest the proceeds in your DTC channel. Lastly, prioritize retention by obsessing over delivering the best customer experience as possible. This is the best time to get to know your customers intimately so when you have the capital to invest in growth, you can maximize your ROIC.
Where do you see the company going now over the near term?
In addition to ongoing hydration disruption and product development, Hydrant will soon be introducing a brand refresh that doubles down on the brand’s key propositions while further promoting how hydration and its associated wellness benefits help our bodies to perform at their best.
Hydrant will soon be introducing a brand refresh that doubles down on the brand’s key propositions while further promoting how hydration and its associated wellness benefits help our bodies to perform at their best.
With more flavors and more functions on the horizon, Hydrant’s sleek, single-serve packets will easily and deliciously satisfy a wider variety of needs for today’s active consumer.
What’s your favorite restaurant in the city?
King in the West Village is our absolute favorite, that we look forward to returning to when the stay-at-home order is over. The chef’s there have a similar minimalist philosophy to their cooking: fewer, higher quality ingredients that are intentionally put together leads to some delicious meals. The chefs at King were also taste-testers of the earliest iterations of Hydrant!
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