A little more than a week after launching a crowdfunding campaign via WeFunder, BeatBox maker Future Proof has raised nearly $636,000 from more than 400 investors toward its maximum goal of $1,069,999.
Austin, Texas-headquartered Future Proof, which makes portable party punch wine sold in 500 mL tetra packs, is offering about 3.5% equity in the company through the raise. The company has done so on a pre-money valuation of $60 million. The minimum threshold to invest is $100.
Future Proof was founded in 2012 by Justin Fenchel, Aimy Steadman and Brad Schultz, who recently discussed the company’s crowdfunding raise, expansion in chain stores and future plans with Brewbound.
According to Steadman, no one person owns more than 20% of the company, including Dallas Mavericks’ owner Mark Cuban, who invested $1 million in the company through the Shark Tank reality series in 2014.
In hopes of selling investors on joining Cuban and celebrities such as Rob Dyrdek, Louis the Child, G.T.A. and others on its cap table, the company touted $6.2 million in revenue on a trailing 12-month basis and 98% year-over-year revenue growth in fiscal year 2019.
Future Proof’s WeFunder page offered a look at the company’s financials, including generating $4,199,062 in revenue (+107%) for calendar year 2019, but posting a net loss of $4,234,348. The company’s short-term debt is $1,119,451.
Compare those numbers to 2018, when Future Proof generated $2,025,037 in revenue, but lost $3,172,247.
As of August 2020, the company had $851,536 of cash in hand. Revenues averaged $655,904 per month, with monthly cost of goods sold and operations expenses averaging $324,211 and $352,891, respectively.
Nevertheless, Future Proof said it has posted record sales in 2020 since the start of the pandemic, including achieving the company’s first profitable month ever in August 2020. BeatBox’s exposure in the on-premise channel was just 5%, as 95% of its volume is sold through off-premise retailers.
BeatBox, which is classified as a wine but plays in the FMB space, ranked as the fastest-growing, single-serve wine product by cases, dollar sales and velocities by market research firm Nielsen, Schultz and Fenchel pointed out.
Each of BeatBox’s flavors — Blue Razzberry, Fruit Punch, Fresh Watermelon, Pink Lemonade, and Tropical Punch — posts relatively equal rates of sale, Schultz said.
“On the high end, we’re selling about 1.68 cases per flavor per account on Tropical,” Fenchel added. “On the low end is Watermelon at 1.6 So you’re talking very little different. Everything else is in between. So there’s almost no difference.”
According to Fenchel, the company expects to sell 320,000 cases by the end of 2020, up from 140,000 cases in 2019. The company also boasted improved gross margins to an “industry-leading 55%.”
In 2021, the company is forecasting sales of 650,000 cases. The expectation from Future Proof’s founders is a full year of profitability next year. To hit that mark, Fenchel said the company is focused on four areas:
- Expanding distribution within the 30 states that its products are already sold in;
- Expanding distribution to new markets, such as northeastern states New Jersey, Pennsylvania, Massachusetts and New York;
- Growing its on-premise business;
- And expanding in international markets.
Those pillars provide Future Proof with enough runway to hit its growth goals, Fenchel said. A lot of that is relying on growth in chain stores.
Over the last six months, Future Proof has built its chain business from 100 locations in 2019 to 11,300 accounts. BeatBox is now sold in 1,200 Circle K stores, more than 300 QuickTrips, 225 Krogers, 200 HEBs, 215 7-Elevens and 150 Speedways, among others. Even with that growth, the company’s products are still sold in just 3.5% of available off-premise accounts in the U.S.
Over the last 90 days, BeatBox’s chain business has grown from 10% of its depletion volume to as much as 70% of its volume, Fenchel said. That business is expected to keep growing as the company adds hundreds of placements in Circle K, Kroger (in Georgia, and Dallas and Houston, Texas), Wawa, AMPM (Southern California, Nevada, Washington and Oregon), Safeway (Oregon, Washington, Maryland, Virginia, and Washington, D.C.) and Jewel-Osco stores. The company is also running a test in Dollar General Stores.
Helping build Future Proof’s chain business is Julie Edwards, who is leading its chain sales on the East Coast and in the Midwest. The company has also brought on Tony Zangara as VP of sales.
Zangara joined Future Proof after serving as VP of sales for Founders Brewing Company for more than three years. He also brings 17 years of sales experience from Anheuser-Busch InBev.
Responding to questions from potential investors on WeFunder, Fenchel wrote that the company expects its WeFunder raise to be its last investment round, with the company self-funding its future growth. However, he didn’t fully rule out a potential future raise should the company need to bolster its future growth. Through past raises and loans, the company has raked in more than $11.3 million.
Future Proof plans to use the proceeds from the WeFunder raise to hire around five additional sales reps, increase its inventory runs and pay off short-term debt, which the company took on at the outset of the pandemic. The company broke down its proposed allocation of the proceeds: staff (35%) sales and marketing expenses (32%), G&A expenses (15%), operations (10%) and WeFunder fees (6.5%).
The company said a combination of an $850,000 promissory note as well as a $313,500 Paycheck Protection Program loan from the U.S. Small Business Administration, that it believes it has “sufficient liquidity to maintain operations through at least October 5, 2021.”