Californian startup Alice Mushrooms has closed an $8M funding round to expand its functional vegan chocolate empire, following seven-figure revenues in its first year.
Celeb-favourite functional chocolate brand Alice Mushrooms has brought on more celebrities to its shareholder table.
The US startup has raised $8M in an oversubscribed funding round led by NewBound Venture Capital, with support from Unilever Ventures and Dutch DJ and music producer Tiësto.
It comes a year after the company secured a significant capital raise from VC firm L Catterton and actors Zac Efron, Pedro Pascal and Kevin Hart.
The latest investment will help Alice Mushrooms develop new products and expand distribution into 1,300 retail stores, and comes as the business forecasts 40% year-on-year growth this year.
Mushroom chocolates tap into sober-curious trends
Founded in 2022 by Lindsay Goodstein and Charlotte Cruze, Alice Mushrooms combines the fruiting bodies of mushrooms with nootropics and adaptogens in what it says is a food-is-medicine approach.
It offers four core products across different functionalities: sleep, focus, social elevation, and arousal. Its best-selling SKU is Nightcap, a sleep supplement chocolate packed with reishi mushrooms for stress management and restful sleep cycles, chamomile for calm, L-theanine to promote relaxation, and zinc and magnesium to boost the body’s natural melatonin.
Brainstorm is centred on increasing focus, and contains lion’s mane and corcydeps, guarana, and phosphatidylserine (a fatty acid that maintains cognitive function).
Meanwhile, Alice Mushrooms’s arousal product is called Happy Ending, and combines cordyceps, ashwagandha root, maca root, ancient plants like tribulus, mucuna, damiana and horny goat weed, Ceylon cinnamon, and cayenne.
The startup’s latest product, unveiled this month, is Party Trick, which is targeted towards sober-curious consumers. Only 54% of Americans drink alcohol now (the lowest in at least 90 years), with those aged 18-24 (50%) abstaining more than the rest. This is driven by health – the share of consumers who think even moderate drinking is bad for you has risen from 39% in 2023 to 53% this year.
According to Alice Mushrooms, Party Trick is designed to target the body’s serotonin, dopamine and GABA receptors, making use of cordyceps, kanna, mucuna pruriens, gotu kola, L-taurine, guayasa, and popping rocks.
Alice Mushrooms marries functional food with women’s wellness
All the semi-sweet dark chocolates are low in sugar and calories, and based on a vegan recipe of chocolate liquor, sugar, cocoa butter, sunflower lecithin, vanilla, and coconut oil.
Alice Mushrooms’s quirky branding and premium packaging – approachable and familiar with a hint of trippiness – have helped its products attract a lot of attention, from Hollywood personalities to Instagram and TikTok influencers. It also partnered with HBO hit The Last of US for a special edition of Brainstorm.
“It does intrigue people,” Cruze, who was named in Inc.’s Female Founders 500 list with Goodstein this year, told Forbes. “They see the words ‘chocolate mushrooms’; it does stop them in their tracks, and definitely stops the [online] scroll.”
In the company’s first 12 months, revenues hit seven figures, and its turnover is projected to reach eight figures in 2025. The products are already available in Erewhon, Sprouts Farmers Market, Pop Up Grocer, Clean Market, and independent stores nationwide, but Alice Mushrooms expects its footprint to grow by 250% this year, thanks to a significant expansion in two retailers next month.
“Functional food is one of the most dynamic growth areas in consumer wellness, and Alice is at the forefront of driving its expansion, particularly through their innovative retail strategy that continuously captures consumer attention throughout the store,” Sydney Couval, principal of NewBound Venture Capital, told Forbes.
The company will launch two new products this year, including one formulated by OB-GYN Jen Ashton, an investor and its chief medical advisor. This will be focused on the $1T women’s wellness market, adding to the expanding roster of planet-friendly foods, beverages and supplements specifically catering to women.
This year alone, seven companies have introduced products featuring Helaina’s precision-fermented lactoferrin ingredient, Effera, which offers targeted support for immunity, iron regulation, gut health, and recovery. These include Levelle Nutrition’s cycle-syncing protein powders, and Kroma Wellness and SwissRX’s colostrum alternatives Super Core and Revitalize, respectively.
TurtleTree, meanwhile, launched an animal-free lactoferrin supplement with prebiotics to support iron regulation, improve energy levels, and enhance gut health for women, and beanless coffee startup Minus Coffee introduced an Instant Oat Milk Vanilla Latte targeting women’s wellness and cortisol balance, featuring half as much caffeine, a dose of L-theanine, and 6g of pea protein.
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