Spacegoods disrupts the functional beverage industry with mushroom-based powders

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The mushrooms are having a while. Whether in the form of a functional drinkusing mushroom root to make alternative proteincreating leather-like materials or just the mushroom In themselves, mushrooms are gaining popularity.

Space assets is the latest startup to join this craze. The London-based wellness brand harnesses functional mushrooms and nootropics to create a range of powder blends that improve energy, relaxation, mood and overall well-being.

Ecommerce entrepreneur Matthew Kelly launched the business in April 2022 after setting up a company called Neon Beach which he grew to £10 million, but Couldn’t withstand supply chain issues during global pandemic. Afterward, Kelly told TechCrunch that he was depressed and just wasn’t taking care of himself.

“I was depressed, gained weight and drank too much coffee,” Kelly said. “I started learning about functional mushrooms and trendy brands in America. Many people have similar issues with too much coffee and anxiety, so I wanted to pile on a lot of these ingredients. And in the UK, the brands all look the same on the shelves, so I wanted to stand out with something pink.

Spacegoods’ flagship product, called “Rainbow Dust,” was created to resemble coffee, but without the jitters and accidents that follow consumption. Rainbow Dust contains 80 milligrams of caffeine and comes in flavors like chocolate, vanilla, cinnamon, and chocolate orange.

It also has an “Astro Dust” product formulated for relaxation and sleep. They are intended to be mixed with water, milk, a protein shake or added to evening tea.

Matthew Kelly, Space Assets

Matthew Kelly, founder of Spacegoods. Image credits: Space assets

Both formulations include botanicals and mushrooms, including Ashwagandha, Cordyceps, and Lion’s Mane Mushrooms. Lion’s Mane, in particular, has been shown to have a positive impact on cognitive function and mood in young adults, according to a 2023 National Institutes of Health pilot study.

In the year since its launch, Spacegoods has attracted more than 75,000 customers. The company primarily targets consumers, through its website and Amazon, and sells in the UK and European markets such as the Netherlands and Germany. It is also present in 400 physical stores in the UK, including Holland & Barrett. More retailers are in the works for this year, Kelly said.

Today, Spacegoods announced a £2.5 million ($3.1 million) funding round led by Five Seasons Ventures, with participation from Redrice Ventures, Slingshot Ventures and G-FUND. In total, the company has raised £3 million, which includes a pre-seed round from angel investors.

Kelly plans to invest the capital in hiring and accelerating growth. He predicts that the company will be able to increase its revenue by 3 times compared to 2023. Spacegoods will also launch additional powder flavors and a gummy product in the coming months.

In supporting Spacegoods, Saskia Hoebée, director of Five Seasons Ventures, said in a statement that the company is “a pioneer in the new category of mushroom-based energy and supplements.”

“The company operates at the intersection of three trending markets: supplements, functional beverages and coffee substitutes, all in which strong growth is expected in the coming years due to increasing consumer demand for energy clean and broader well-being,” said Hoebée.

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