- BetterBrand wants to be the "Beyond Meat of carbs" with its high-protein bagels.
- The food-tech venture makes baked goods without refined carbohydrates.
Food-tech startup BetterBrand wants to change the way we eat. But instead of plant-based meat, it's using bagels.
BetterBrand, which makes low-carbohydrate, high-protein Better Bagels, closed a $6 million Series A funding round, it said on Wednesday. The round valued the company at $170 million, not counting the new investment, according to the company. The valuation is similar to what Facebook and Tesla achieved when they raised Series A funding, the startup said in a press release.
BetterBrand attracted several investors in its latest round, including Verso Capital, which led the round, as well as returning investors including Gaingels Fund and Seven Seven Six, Reddit co-founder Alexis Ohanian's venture capital firm.
The Better Bagel contains 90% fewer carbs than a traditional bagel, BetterBrand's website says. Each bagel contains about as many carbs as two slices of a banana and one gram of sugar — roughly as much as in a stalk of celery, according to the company. It's particularly focused on making products that are lower in refined carbs, which are processed and generally contain fewer nutrients, such as fiber, than unprocessed ones.
Instead, each bagel contains between 24 and 26 grams of protein. "We are transforming carb-heavy foods into foods that are functionally great for you that don't release the same sugar content and don't have the same effects," Aimee Yang, BetterBrand's founder and CEO, told Insider.
BetterBrand's goal is to become the "Beyond Meat of carbs," Yang said. While the bagel is the company's only product at the moment, it has plans to launch new products later this year, she said.
The market for alternatives to traditional carbohydrates is larger than the one for alternative proteins, Yang said. Startups have rushed into the alt-protein world even as demand for plant-based protein has fallen off. Sales of plant-based meats fell 1% to $1.4 billion in 2022, according to the Plant Based Foods Association.
Even big names, such as Beyond Meat and Impossible Foods, have laid off staff as pandemic-era demand for the companies' burgers and nuggets has eased.
"You've heard how much funding has gone into plant-based and just how saturated that market has gotten," Yang told Insider. By contrast, she added, BetterBrand is part of a smaller group of companies trying to create low-carb versions of food.
BetterBrand plans to boost sales, release new products
Unlike other startups that made lots of new hires over the last few years, BetterBrand limited its headcount. The company has fewer than 10 full-time employees, and it works with contractors whenever possible, Yang told Insider. The company developed its own formulation and production process for its bagels, but it uses co-manufacturers instead of owning its own production facilities, for example.
BetterBrand also plans to grow sales to between $30 million and $40 million over the next 12 months, Yang said. Over the last 12 months, the company generated between $5 million and $10 million, she said. The company already sells bagels in stores from Whole Foods to Foxtrot, and it plans to release new products later this year.
Many startups are downsizing or folding altogether as funding dries up. But Yang told Insider that keeping costs low and having a clear plan to increase sales made BetterBrand an easy sell to venture capitalists. "Investors are looking for opportunities that are safer," she said.