The beverage industry is witnessing two significant trends: a surge in the self-made sparkling water market and steady growth in reusable bottle adoption. Consumers are increasingly gravitating towards healthier drink options and the convenience of at-home carbonation, while environmental concerns are driving the shift away from single-use plastics. Aerflo, a newly-launched startup, has positioned itself at the intersection of these trends with its innovative Aer1 system. This portable carbonation device is designed to transform still water into sparkling water on the go. The system’s key feature is its proprietary bottle lid, which houses a refillable carbon capsule capable of carbonating four full bottles of water. Operating on a circular economy model, Aerflo has implemented a unique refill system. Customers return their empty capsules to the company by mail and receive full replacements in return. This on-demand approach eliminates the need for ongoing subscriptions. The initial cost for consumers is $99, which includes the Aer1 device, an Aer1 bottle, and 13 carbon capsules. Following this, customers only pay for replacement capsules as needed, when they return their empties.
AlleyWatch caught up with Aerflo Co-CEOs and Cofounders John Thorp and Buzz Wiggins to learn more about the business, the company’s strategic plans, latest round of funding, and much, much more…
Who were your investors and how much did you raise?
The funds raised were seed and seed + pre-seed/seed. We raised $10M+ in venture capital with rounds led by Lerer Hippeau and Torch Capital, with additional investment from Closed Loop Ventures Group, Amity Supply, Good Friends, SWAT Equity Partners, WISE Ventures, Bluestein Ventures, RiverPark Ventures, and Palm Tree Crew, among others.
Tell us about the product or service that Aerflo offers.
Aerflo is the first-of-its-kind portable carbonation device that instantly transforms any still water into sparkling wherever, whenever. Aerflo’s Aer1 System comes with an Aer1 Bottle, Aer1 Device, and reusable carbon capsules for a refreshingly simple solution for carbonation on the go. Just fill the Aer1 Bottle with water, add a capsule, and tap to spritz.
Aerflo is also uniquely powered by a circular, on-demand CO2 refill model that’s better for both people and the planet. The result is hassle-free refreshment. When it’s time to replenish Aerflo’s carbon capsules (1 capsule makes about four 16 oz bottles of sparkling water), simply drop the empties in the mail and a replacement will be on its way.
What inspired the start of Aerflo?
We saw our entire peer group carrying reusable bottles, and began to think of them as a platform – how we could bring beverage customization to the bottle. We quickly zeroed in on carbonation as our target – the number one growing beverage in the US, the only portable/fit with an active lifestyle solution is single use. We knew a circular, zero-waste model was core to a solution without those compromises.
We were energized by this concept – bringing carbonation to the bottle you carry with you every day. The first thing we did was build a prototype to prove this was remotely possible – along with some industrial design spins, mostly inspired by beautiful, durable analog technology – think cameras from the 80s. Was critical to us that this be something a consumer is proud to carry with them. Next up was to run this concept through our checklist – we knew it was going to be hard (maybe not this hard) but loved what we saw.
How is Aerflo different?
Until now, a love for sparkling water has meant stockpiles of single-use cans or inconvenient trips to the store to replace bulky canisters. While circularity is a hot topic, actual deployments that meet customer needs are few and far between. We saw an opportunity to align what is best for customers and for the planet.
We have redesigned every aspect of the sparkling water experience to minimize waste and maximize consumer ease, so there isn’t anything or anyone else doing what we’re doing. We’ve even built a state-of-the-art refill processing facility that supports our circular refill model, including canisters and capsules that are compliant to be shipped via USPS. In fact, we’re the only company in the industry that is currently shipping reusable, small-scale capsules through the postal service.
What market does Aerflo target and how big is it?
Currently valued at $43B, the global sparkling water market is projected to reach $108.35B by 2032. But, there’s a clear need for innovative and more sustainable solutions. Aerflo is for anyone who has resigned themselves to purchasing single-use sparkling water because it was the only convenient option, or anyone who has settled for still water when they wanted the refreshing carbonation of sparkling because it wasn’t an option.
What’s your business model?
Our business model is centered around sustainability and convenience through an on-demand circular refill system. The Aer1 System ($99) includes the Aer1 Bottle, the Aer1 Device, and 13 reusable carbon capsules. Each capsule makes four 16 oz bottles of sparkling water and are refilled in our owned and operated processing facility. Refills aren’t through a subscription – our exchange program is triggered automatically when you return your empties. No stockpiling and always on demand. Our products have a longer lifecycle and act as a cost-effective, eco-friendly alternative to single-use plastic bottles.
What was the funding process like?
In a few words, it takes perseverance, luck, and being ready to ask for favors. From everyone.
Fundraising is a grind and takes tenacity. As all entrepreneurs will tell you, there are a lot of nos involved. The key is finding a way to have those nos push you forward. We were also fortunate to meet a group of investors (like Caitlin Strandberg) early who deeply believed in us, and paved the way for others to join in.
What are the biggest challenges that you faced while raising capital?
The parts of our business that make it special – like having a refill facility, or designing complex hardware from scratch – are different and require meaningful upfront capex. That was a different narrative than many consumer VCs are used to, and makes us appreciative of those who believed in us.
What factors about your business led your investors to write the check?
Our circular model is a driving force behind our company. It allows us to have a meaningful sustainability promise: one Aerflo capsule will replace 330+ cans in its lifetime, which is the equivalent of 74 kg of CO2e. This is increasingly important for many investors, including Closed Loop, the leading investment firm for circular economy businesses.
Secondly, investors appreciated that we are not intimidated by what we haven’t done before, or if something is hard — or really hard. Our commitment is always that hard motivates us.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
First, there is no such thing as a no. Take the no, figure out what it means you have to fix, learn, or adjust, and get ready for the next one.
Secondly, being scrappy is not a bad thing. There is certainly no direct connection between dollars paid and quality of work. Many of the best, highest-quality outputs at our company have come from times when we were forced to be scrappy. Always be prepared to do things yourself/yourselves.
Where do you see the company going in the near term?
We’ve launched our pre-order, so our current focus is product fulfillment which will begin late September. We’re learning (even 1 day in) about our customers, and deploying that knowledge right away. We are looking forward to some retail partnerships that launch later this fall.
That said, R&D never sleeps.
What’s your favorite summer destination in and around the city?
John: Beach volleyball courts at Pier 25, north side of the net.
Buzz: Beach volleyball courts at Pier 25, south side of the net.
