Sparkling tequila soda brand Onda has closed a $5 million Series A round of funding led by Aria Growth Partners and beverage entrepreneur Clayton Christopher, the company announced last week.
What is Onda?
Co-founded by Noah Gray (CEO), Max Dworin (COO), Kelli Adams (Chief Creative Officer) and Canadian actor Shay Mitchell (Chief Brand Officer), New York-based Onda is part of a wave of new RTD tequila-based seltzers and sodas that have hit the market in recent months. Launched in July 2020, the brand markets a line of 100-calorie, 5% ABV sparkling drinks made with real fruit juice and blanco tequila from a woman-owned distillery in Jalisco, Mexico.
Inspired by 90’s surf culture and style (think Body Glove and Ocean Pacific), Onda is available in Lime and Grapefruit flavors in 12 oz. cans, both online at drinkonda.com and at around 3,000 retail locations in California, Connecticut, Florida, Georgia, Indiana, Illinois, Louisiana, Kentucky, Massachusetts, New Jersey, Ohio, New York, Rhode Island, Tennessee and Texas.
In August, the brand announced it had raised over $1.2 million from venture studio 25madison and other strategic investors. The New York-based firm has been taking a hands-on role in brand development and execution thus far, with Gray calling them “like a co-founder.”
The brand’s strong initial reception in New York City, along with securing placement at some “really meaningful” chains, helped give Onda confidence to raise another round of growth capital, Gray said.
Who is involved?
Onda marks the first beverage investment for New York-based CPG venture capital firm Aria Growth Partners; it is also a stakeholder in skincare brand Hero Cosmetics. According to its website, the group is focused on minority investments in the $5 million to $30 million range.
For Christopher, Onda represents a fusion of his experience in non-alcoholic RTDs — Sweet Leaf Tea, Waterloo — and spirits, with Deep Eddy Vodka. The CPG industry veteran (and SPAC co-sponsor) is also on the Board of Directors for Kite Hill, Rhythm Superfoods, REBBL, Kettle & Fire and Good Culture.
“The things that we loved about Aria and Clayton as partners is they have really deep experience in growth CPG venture investing and operating,” Gray said. “We thought they were a fantastic strategic fit and could really help guide our next stage as we move from this early stage scrappy startup into a more developed company that we believe is really helping create a new category.”
“As an investor and operator, I pay close attention to a number of factors before becoming involved with a new venture, including the potential of the category, the positioning of the brand and the strength of the team,” Christopher said in a press release. “On all three counts, Onda is a winner.”
Also joining the board as Non-Executive Chairman is Jim Clerkin, a former president at Jim Beam North America and later at Moet Hennessy USA. He remains an advisor and consultant at the latter, where he is responsible for M&A and strategy.
“Over the past few years, I have been watching the emergence of the sparkling ready-to-drink market. The growth we’ve seen to date is tremendous and it is only just the beginning,” Clerkin said. “The Onda team and brand is pushing this category forward. I am excited to be working directly with the Founders to help grow Onda into a category-defining company.”
What’s next?
As the hard seltzer category continues to explode, Gray believes that that segment will serve as the “entry level” product for which a sparkling tequila soda stands as a more premium alternative.
“As more people have come into that ready-to-drink, better-for-you category, there’s sort of a curation happening,” he said. “And we are seeing the emergence of a more premium tier that we believe will be led by spirits-based RTDs. Traditional spirits are perceived as slightly more aspirational, with cleaner ingredients. In that market, the first success story was really RTD vodka, and we think the next extension is to RTD tequila soda.
Unlike vodka and malt-based alcohol, tequila has “a really wonderful provenance story,” Gray said. The rich culture behind the spirit — from ingredients to preparation to agave’s “health halo” to the fact that it can only be produced in Mexico — has given Onda a strong identity to lean into, he said.
“What we identified when we started was this… shocking amount of white space in the tequila soda lane,” Dworin added. “There is just so much opportunity there and not a lot of explanation needed to have the customer understand what we are. We are really laser focused on positioning ourselves as and becoming the leader of this emerging category.”
With new financial resources at hand, Onda already has plans in place to use them. The brand is in the midst of kicking off a new summer campaign that will include content marketing and trade activation, and new flavors are set to launch within the month. Behind the scenes, the company has added talent: Dan Liguori has joined as Senior VP of Sales & Strategy after leading the U.S. premium spirits division as VP & General Manager at White Claw-maker Mark Anthony Brands. Elsewhere, Lauren Haas, formerly Director of Marketing at BABE Wine and an Anheuser-Busch InBev veteran, has been appointed Senior Director of Marketing.