Pepsi Co buys POPPI for $1.95 Billon !! I have so much to say!!

The sale includes $300 million of anticipated cash tax benefits; net purchase price of $1.65 billion.

Two weeks ago I wrote an article, “I’m an Investor in Olipop and Poppi…” and I gave a run down on my thoughts. As an investor I knew exits were near, but my estimation was ~1 year out for Poppi and ~1-2 years out for Olipop. Well, just last Friday whispers emerged of an imminent Poppi sale and I’ve been watching the story unfold ever since.

This morning, Monday, March 17th, the PepsiCo CEO and Poppi CEO announced the deal, subject to regulatory approval.

If you’re only just hearing about Poppi (gasp!), Poppi is a low calorie and functional soda founded by Allison and Stephen Ellsworth. Poppi, formally Mother, uses apple cider vinegar and prebiotics as their differentiator, and the fruity sodas have no more than 5g of sugar per serving.

After partnering with Rohan Oza on Shark tank and landing the Cavu deal ($400,000 investment for 25% stake), the soda rebranded from Mother to Poppi, and became a national sensation, partnering with the biggest influencers and celebrities, and even appearing in Superbowl commercials.

Here are my thoughts:

1. The Soda War is OVER!

Or is it? As I discussed in my substack two weeks ago, the media and venture communities loved turning the brands into rivals, but a win for one is wildly positive for the other. The category is on fire, and traditional soda has been reporting constant year over year growth, as opposed to the newbies, Olipop and Poppi, reporting double and triple digit growth.

This year, beverage giants Coke and Pepsi tried to enter the market with their own functional sodas, creating fears that the giants would not be the acquirers of Poppi and Olipop. News broke last week that Pepsi would not be launching theirs; clearly the brand recognition of Poppi in their portfolio proved superior.

As for Olipop. Who will acquire them??

Ever since news broke that their latest funding round was led by JP Morgan Private Capital’s Growth Equity Partners, people have been speculating that Olipop may go the public route. I personally think they’ll exit to a large acquirer, like Coke or Keurig Dr Pepper.

Regarding the ‘war,’ Olipop just closed their funding round at a $1.85b valuation, while fully profitable and growing at triple digit speed. I’m optimistic Olipop exists at a $3B+ price in the next 1-2 years.

2. The sale implies a 3.3x sales multiple.

I’ve discussed in several of my last venture capital posts on social media that multiples have come down over the years. Why? Because it’s not about the sales.

What is the profitability? Is there debt? Growth rate?

With that said, 3.3x is in-line to better than what we’re seeing in the venture space, and I think the deal is fairly valued.

And while Poppi’s revenue may have been higher than Olipop in 2024, their profitability may not have been better. The better your profitability, the better your sale.

3. Acquisitions are back, and beverages are on fire!

Spindrift sold for +650 mil to private equity.

Alani Nu sold for 1.8 B (2.8x)

OWYN sold for 280 mil (2.3x)

The venture market cooled off big time in the last few years, but late 2024 into 2025 the market came back and deals are coming in big! If you think about it, we saw a huge emergence of better-for-you brands from 2018-2020, so it would track that 2025 would bring in some exits. I think the momentum will continue!

4. This is another big win for Pepsi off the back of their Siete acquisition in October 2024.

And off the back of their November 2024 Sabra acquisition. The Pepsi’s of the world are quickly realizing you can’t create culture, but you can acquire brands who have mastered it.

One of Poppi’s superpowers is their social media strategy. They are notably one of the most viral CPG/beverage brands on TikTok, and GenZ often tauts their merch (available at target) while sipping on their cold beverages. GenZ is a generation Pepsi needs to tap into.

IN SUMMARY: I think Poppi was always ready to sell first (as opposed to Olipop). There aren’t many buyers in the beverage space, so if Olipop moved first, with better fundamentals, it would be tougher for Poppi to get the number they wanted and the acquirer they wanted.

The sale is a WIN for the beverage industry.

The sale is a massive win for CAVU, their lead venture partner. Assuming they maintained their 25% stake, this is a $400 million dollar + exit.

And MASSIVE congratulations to Allison, Stephen, and the Poppi team. From Shark Tank to a household consumer STAPLE- what an accomplishment!