Published 11/18/19 in the Baltimore Business Journal
A Pigtown-based company that markets high-caffeine, energizing tea blends is raising $2 million in new funding.
Zest Tea’s new round was disclosed in a recent filing with the U.S. Securities and Exchange Commission. The company is looking to raise up to $2 million, the documents show. According to data reported by Pitchbook, about $780,000 has already been raised, from investors including Norway-based Momentum Partners and local funder, the Baltimore Angels.
The raise follows on a $1 million round Zest Tea raised in late 2018. That round was co-led by the Lord Baltimore Capital Group and the University System of Maryland’s (USM) Maryland Momentum Fund, which each contributed $300,000. Zest Tea is one of 10 companies with state university-connected founders, technologies and products that have earned investments from the Momentum Fund to date.
Zest Tea was co-founded by University of Maryland, College Park alumnus, James Fayal. His company creates teas that have as much caffeine as a cup of coffee, but minimize jittery effects and the “crash” that can often occur when consuming caffeine. The six-year-old company has secured thousands of shelf placements for its products, including with several major grocery retailers.
Fayal declined to disclose certain details about the new round, as it is still ongoing.
He did note the funds are intended to support rapid growth of the company’s retail channel. In a statement, Fayal said Zest Tea is available in over 2,500 stores now, including Whole Foods, Harris Teeter, Safeway, and Giant, and the company expects to scale its presence to 4,000 or more stores by the end of next year.
The startup has been working to gain traction in the U.S. wholesale tea market. Market research firm Statista noted sales in that market totaled about $1.84 billion in 1990, and has grown to about $12.5 billion as of 2017.