A Los Angeles-based food technology startup known for its low-carb, high-protein frozen bagels made headlines of a different sort recently when it raised $6 million in a Series A funding round to bring its pre-money valuation to $170 million.
The startup, BetterBrand, launched its signature “Better Bagel” two years ago using a proprietary grain-changing technology that combines non-GMO and clean-label ingredients, according to a June 12 press release. The bagel has a net carbohydrate equivalent of two banana slices and features 250% more protein and 90% fewer carbs than the typical frozen bagel, with no added sugar.
Photo Courtesy BetterBrand
BetterBrand’s growth potential helped it set a record for the highest Series A valuation posted by a female founder, the Green Queen website reported. That founder, Aimee Yang, belongs to an exclusive club as one of only 150 solo female founders to raise more than $5 million in a Series A round. The valuation is also more than twice as much as leading tech names like Facebook, Stripe, and Tesla raised, according to Green Queen.
VERSO Capital led the June funding round, including participation from the Gaingels Fund, Alexis Ohanian’s Seven Seven Six, and Craft Lane. Other investors include Cruise Founder and CEO Kyle Vogt, venture capitalist Chris Hollod, and Jeff and Glenne Azoff.
BetterBrand also has financial backing from Sean Thomas, grandson of Wendy’s founder Dave Thomas, and actors Patrick Schwarzenegger and Emmy Rossum.
The main reason all of this money is flowing in from all of these investors is because of Yang’s operational and innovation skills, her partners say.
Photo Courtesy BetterBrand
“Aimee Yang is an incredible entrepreneur and a solid operator,” Vogt said in a statement. “Her company offers life-changing, clean, functional products for those who previously felt they had to give up some of their favorite foods to fit their nutritional needs. It’s an exciting journey to be a part of.”
Gaingels Managing Director Lorenzo Thione praised Yang’s “unique combination of determination, vision, and ability to innovate,” which he says sets her apart from other entrepreneurs.
“At Gaingels, we are thoroughly convinced that under her leadership, BetterBrand is poised to redefine our very relationship with carbohydrates, by combining health and taste in one innovative package,” Thione added. “BetterBrand’s vision is not just about a product; it’s about a revolution in how we perceive and consume starches, worldwide.”
Photo Courtesy BetterBrand
BetterBrand’s product development process begins by compiling a list of natural ingredients that “have been used in the past to target a specific health need,” according to its website. The company then cross-references each ingredient with the latest scientific research “to understand everything about its safety, function, and potential interactions.” Once a product is developed, it is sent to a third-party lab to ensure its purity.
Business has been good. BetterBrand reported 800% year-over-year sales growth between 2021 and 2022 and is on track for similar growth from 2022 to 2023. Last year the company launched globally in the supermarket chain Whole Foods Market, Forbes reported, and the brand is already sold in more than 1,000 retail stores, including Sprouts, Fresh Market, Gelson’s, Bristol Farms, Giant, Plum Market, and Foxtrot.
Photo Courtesy BetterBrand
“We launched into retail in a pretty significant way, and Whole Foods, as our key partner, has been incredibly supportive,” Yang told Forbes in an interview. “The most exciting part is that all our growth has been happening virtually and organically, which really speaks to the excitement the product is able to generate among the consumer and our messaging around freedom, inspiration, and empowerment.”
BetterBrand aims to avoid the typical startup mistake of spending too much money too early just for expansion.
“We haven’t spent a dollar on influencer marketing, and a lot of traffic and posting on social media just proliferate themselves,” said Yang. “We also decided on the frozen aisle in the first place because consumers are looking for products made without additives or preservatives, and we maintain a clean label.”
According to Forbes, the low-carb diet market was worth less than $11 billion in 2021, cited Data Bridge Market Research estimates. The market is projected to grow by 6.9% annually through the decade’s end.
