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Recess will look to raise Series B later this year

Image of Recess-branded functional beverages and supplement products.

Photo: Courtesy of Recess

Recess, a maker of functional beverages and supplements centered on relaxation, will raise a Series B of at least $20 million later this year, CEO Ben Witte tells Axios exclusively.

Why it matters: The functional beverage category is expected to grow in value to almost $280 billion by 2030 from nearly $130 billion in 2021, according to Precedence Research.

Driving the news: Recess has recently expanded distribution into 5,000 new locations with retailers, including Target, Albertsons, CVS, H-E-B, Sprouts and Winn-Dixie.

  • That brings the brand's total to 14,000 retail doors with 2,000 more expected by year-end.

Details: "Recess is a unique asset," Witte says, adding that the brand wants to replicate the success Red Bull has had in energy, but in relaxation.

  • Recess is seeking long-term investors, not those looking to flip, and wants an option for the company to remain independent, Witte says.

Of note: The beverage and supplement startup has not formally retained an investment bank, but it is something the company could consider, Witte says.

  • He says he speaks to advisers on a frequent basis and receives a lot of outreach.

By the numbers: The company's sales are around the $10 million to $20 million range and will grow 2x this year, Witte says, declining to be more specific.

  • Its sales on a monthly basis are 2.5x what they were in Q4 of last year.
  • About 60% of the company's products are still sold online.
  • It has a slow cash burn rate as it invests in growth.

Zoom in: Recess makes three products, including functional beverages, powders and mocktails.

  • Magnesium, which helps muscles relax, is a key ingredient.
  • The company considers Calm, owned by Clorox, as a key competitor.

What's next: The startup is focused on entering new retailers and expanding nationally with existing retailers, Witte says.

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