The Naked Market Invests in Better-For-You Food Brands

The Naked Market Secures $27.5 Million in Series A Funding

The Naked Market, a food and beverage startup, has successfully raised $27.5 million in a Series A investment round. Integrated Capital spearheaded the funding initiative, which will be used to further develop the company’s portfolio of healthier food brands.

Company Origins and Development Methodology

Founded in 2019 by Harrison Fugman, Alex Kost, and Tim Marbach, The Naked Market employs a unique “fast fail” methodology. This approach allows for rapid development of new food products, utilizing an infrastructure capable of moving from concept to market within approximately three months.

The company also manages its own distribution network, ensuring control over the entire process. This streamlined approach is central to their innovative strategy.

Leveraging Data for Market Insights

A key component of The Naked Market’s success is a proprietary data tool, internally known as The Machine. This tool aggregates over 15 million data points.

• Sources include Shopify, direct customer feedback, Amazon, retail point-of-sale data, and search engine trends.
• The Machine identifies potential category opportunities for the company to explore.

Furthermore, a direct feedback loop with customers allows The Naked Market to quickly assess product performance and scale successful offerings.

A Data-Driven Approach to Brand Creation

“Our portfolio approach is distinct due to our data-driven, fast-fail strategy,” explained CEO Harrison Fugman in a statement to TechCrunch. “We can identify promising food concepts and launch them within months, rather than years.”

He further elaborated that brands demonstrating a lack of market fit are swiftly discontinued, optimizing resource allocation.

Existing Brands and Recent Ventures

Since its establishment, The Naked Market has launched five distinct brands. These include Flock Chicken Chips, AvoCrazy, Project Breakfast, and Beach House Bowls.

Their most recent venture is Rob’s Backstage Popcorn, a collaborative effort with the Jonas Brothers.

Investors and Funding History

In addition to Integrated Capital, the funding round included participation from Great Oaks Venture Capital, Pacific Tiger Group, Sope Creek Capital, and Clearco.

The Naked Market has now raised over $33 million in total funding, including a prior $6 million seed round.

Investor Perspective

Jeffrey Yam, executive director at Integrated Capital, initially connected with Fugman and Kost in Hong Kong. He was impressed by their vision and business plan.

Yam highlighted the company’s focus on market size and the potential for challenger brands. He also expressed enthusiasm for the data-driven technology underpinning their operations.

“Their data-driven methodology for identifying winners and losers early on positions them perfectly to capitalize on this market,” Yam added. “The ability to rapidly bring products to market with a lean infrastructure represents a significant opportunity.”

Market Trends and Growth Potential

The global snack food market was valued at $427 billion in 2020 and is projected to experience a 3% annual growth rate through 2026. Fugman views this substantial market as a fertile ground for disruption.

He noted that the increasing consumer preference for healthier snacks over the past decade has created opportunities for companies investing in research and development.

Competitive Advantage and Future Plans

“Established companies are not prioritizing R&D, or if they are, their investment is minimal,” Fugman stated. “This presents a clear opportunity for us.”

The Naked Market aims to identify categories where they can challenge market leaders, confident in their ability to identify opportunities and achieve scalable growth.

Having been on the market for just over a year, the company’s products are poised for expansion with the new funding. The capital will be allocated to scaling existing brands, developing new products, and exploring potential mergers and acquisitions.

Company Growth and Future Outlook

Currently employing 10 individuals, The Naked Market has experienced triple-digit growth since its inception. Fugman anticipates launching additional brands in the first half of 2022.

While currently focused on online sales, the company intends to expand into retail channels in the coming years, with partnerships already in place.