The Naked Market Acquires Haus in California

The Naked Market, a seller of healthy, consumer packaged goods, based in California, United States, acquired Haus, an aperitif (a dry or fizzy alcoholic drink) producer based in California, United States, on June 30, 2023. Haus had been looking for a buyer after it exhausted its venture capital funding and failed to raise fresh capital in August 2022. 

Transaction Summary

The Facts of the Acquisition

  • Target: Haus sells flowery, low-alcohol aperitifs – an alternative to hard liquors and a little stronger than wines. In August 2022, the company failed to secure USD $10 million in Series A funding when the lead investor, Constellation Brands, pulled out of the investment. Since then, Haus has been on sale.
  • Acquirer: The Naked Market is a producer of healthy, consumer packaged goods. The company was formed in 2019 and has raised USD $33.5 million in seed and Series A funding.

Our Take on the Acquisition

While Haus (target) uses local and organic ingredients like The Naked Company (acquirer), it isn’t immediately obvious why an aperitif producer would fit in with a company that aims to sell healthy snacks and beverages. 

Haus was able to generate social media hype around its products and more than USD $10 million in revenues in 2022 before closing operations in August 2022. The sales volumes based solely on organic growth and online channels may mean there’s potential for growth when the products are sold through conventional channels. While the target price was not disclosed, Haus had been on sale for more than 11 months. It is likely The Naked Market acquired Haus at a discount.

The Transaction

Date:June 30, 2023
Purpose: To expand the product portfolio.
Acquirer’s Statement:Harrison Fugman, co-founder and CEO of The Naked Market “It’s incredibly difficult to build an iconic brand in the food and beverage space, but Haus did so and in short order. Our goal in acquiring Haus is to bring an outstanding brand back to market and build off of the strong community it created, with an increased focus on unit economics.”
Alex Kost, co-founder and CEO of The Naked Market – “While we had no plans on our roadmap to enter the alcohol industry, when the opportunity arose to take over a brand as strong as Haus, we quickly put the process in play to get a deal done.”

Target/Seller: Haus

Company Information

Industry: Alcoholic Beverage
Type:Private with five rounds of venture capital funding
Employees:5 (Source: TechCrunch)
Locations:Head Office: Healdsburg, California, United States
Total Funding:USD $7.5 million
Investors:Bossanova Investimentos: Brazilian micro-venture capital firm focused on pre-seed stage technology companies.
Coefficient Capital: Venture capital firm, based in New York, that invests in transformational consumer shifts.
Evolution VC Partners: Venture capital firm, based in New York, that invests in and supports businesses across every stage
Sahin Boydas: Angel investor and head of payroll software developer RemoteTeam

Product Information 

Products:Citrus Flower – Aperitif made with lemon, subtle elderflower, and hints of cinnamon
Grapefruit Jalapeno – Aperitif that blends fresh grapefruit, makrut lime leaves, pink peppercorn, and fresh jalapeno
 Pomegranate Rosemary – Aperitif that blends pomegranate and berries with earthy juniper and rosemary
Market Reach:(Online only) United States

Financial Information 

Revenue:N/A – Due to closure of ongoing operations

Target/Seller Overview: Haus

Haus launched in 2019 in answer to a generation’s craving for a more transparent alcohol brand, raising millions in venture funding. It sells citrus, spice, and flowery low-ABV aperitifs, meant to be an alternative to hard liquors and a little stronger than wines. Made in Sonoma, California, Haus also promised a product made with all-natural ingredients with a key differentiator: users could order it online and get Haus bottles delivered to their doorsteps.

Until 2o22, the company had passed USD $10 million in revenue and announced it was in talks with a national distributor. The pandemic hit the company hard, and Haus faced a series of challenges with supply chain and marketing. Additionally, Haus was in talks with Constellation Brands for Series A funding. However, the funding did not materialize, and Haus has been looking for a strategic buyer.

Haus offers three flavors: citrus flower, grapefruit jalapeno, and pomegranate rosemary.
Haus’s aperitifs can be mixed with soda or on the rocks and are traditionally consumed before dinner.

Did You Know?

Aperitifs are a category of spirits with complex flavors that come from fruits, herbs, roots, and botanicals. They have a 15-20% ABV, less than traditional spirits, more than wine. After steeping, or soaking, whole fruits, herbs, roots, and botanicals in brandy to extract flavor, the extractions are blended into naturally fermented and distilled grapes with a small amount of raw cane sugar. Aperitifs originated from Italy and are usually consumed before food. In Italian culture, it’s customary to sit down with a drink and a little salty snack before dinner.

Buyer/Acquirer: The Naked Market

Company Information

Buyer:The Naked Market
Industry: Food and Beverage Healthy Consumer Packaged Goods 
Type:Private with private equity funding
Employees:23 (Self-published on LinkedIn)
Locations:Head Office: 2050 Union St, San Francisco, California, United States
Investors:Clearco: Venture capital firm based in Toronto, Canada, investing with e-commerce founders
Great Oaks Venture Capital: Early stage venture investment firm, based in New York, that invests in tech-based startups
HV Capital: Venture capital firm based in Germany, investing in market-leading digital companies
Integrated Capital: A private advisory and investment firm based in Los Angeles, California
Pacific Tiger Group: An investment fund based in Hong Kong, investing in real estate, hospitality, manufacturing, retail, oil distribution, and IT
Rich Rieder: Angel investor and Blackrock’s Fixed Income global chief investment officer 
Sequoia Capital: Venture capital firm investing in all stages across the technology sector. It is based in California and has assets under management of USD $85 billion
Sope Creek Capital: Venture capital firm leveraging the entrepreneurial experience and capital to invest in the next generation of entrepreneurs
Yves Potvin: Angel investor and president of Pacific Institute of Culinary Arts

Product Information 

Products:Avocrazy – Healthy puffs made from avocados for snacking
Flock – Crispy rotisserie chicken skin chips, low in carbs and high in protein
Project Breakfast – Ready-to-drink protein breakfast drink made from healthy vegan products
Rob’s Backstage Popcorn – Combination of sweet and savory artisanal popcorn 
Beach House Bowls – Ready-to-eat smoothie bowls crafted from fruits and organic granola toppings
Market Reach:United States

Financial Information 

Revenue:USD $6.1 million (Unconfirmed Source: ZoomInfo)
Revenue per Employee:USD $265,217 (i.e., USD $6.1 million / 23 employees = USD $265,217 – estimated based on the self-published number of employees and revenue from ZoomInfo)

Buyer/Acquirer Overview: The Naked Market

The Naked Market was created in 2019 by three friends, Harrison Fugman, Alex Kost, and Tim Marbach, who came together over a combined love of food and a displeasure with the lack of truly healthy options on the market – particularly from the category leaders that are familiar household names. The mission of The Naked Market is to create the consumer packaged goods company of the future. The Naked Market has built an omnichannel, online and via retail partnerships, food and beverage platform that creates and launches health-oriented brands/products across a variety of categories. The company has raised USD $33.5 million in seed and Series A funding from venture capital firms like Sequoia Capital and Integrated Capital.

The Naked Market’s line of healthy snacks and beverages are made with organic ingredients.

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