Aussie non-alcoholic spirits startup Lyre’s raises a glass to $37 million in fresh funding

Aussie non-alcoholic spirits brand Lyre’s has raised $37 million in funding in a bid to ramp up global growth, and founder Carl Hartmann has his eye on becoming the fastest independent drinks brand to hit unicorn status.

Already the business is well on its way, with the latest round giving it a valuation of $500 million, just two-and-a-half years after it launched in 2019.

The funding round was led by D Squared Capital and Morgan Creek Capital Management, a repeat backer and early investor in the likes of SpaceX, Lyft and Allbirds.

DLF Venture, VRD Ventures and Maropost Ventures also contributed to the round, all with repeat investments.

Founded out of Sydney by Hartmann and Mark Livings, Lyre’s makes non-alcoholic versions of 14 premium spirits, capable of creating virgin versions of 90% of the world’s best-selling cocktails.

This funding follows a $16 million raise in September last year.

Since then the business has launched in 20 new regions, including China and the Middle East, bringing its total reach to 60 countries.

It has also launched 20 new retail listings and added four new e-commerce stores.

Revenues are up more than 450%, year-on-year, Hartmann tells SmartCompany, and in 2021 the team manufactured their 1 millionth bottle.

All of this growth was achieved during a global pandemic, with borders closed and global supply chains disrupted.

It’s been “scaling on hard mode”, Hartmann says. However he claims Lyre’s products are now the most well-distributed in this space globally.

COVID-19 driving a global non-alc boom

Lyre’s funding news comes as the alcohol-free beverage segment ramps up. According to data from Neilson, global off-premise sales of low-alcohol or alcohol-free drinks reached $3.1 billion.

In 2020, volumes in Australia increased by 2.9%, with the category expected to grow by a further 16% by 2024 — and by 31% worldwide.

Hartmann partly puts this down to increasing consumer awareness, and a shift towards healthier choices.

That was only accelerated by the COVID-19 pandemic, which saw increased sign ups to health and fitness apps, increased demand for meat alternatives, and increased demand for alcohol-free beverages alike.

“COVID-19 forced people to really assess a lot of things in their life,” Hartmann says.

That doesn’t mean they cut out booze entirely. Most of Lyre’s customer base do not abstain from drinking entirely, he notes. Rather they’re looking for options when they’re driving, for example, or when they just don’t fancy a hangover.

The team also sees people choosing Lyre’s to make what Hartmann calls a “wedge drink”, something in between two boozy cocktails, to help stave off intoxication.

“There’s only so much sparkling water you can drink in a night,” he says.

A non-alc unicorn

This funding will be used to further bolster Lyre’s sales in overseas markets, and to increase headcount to support further growth.

If this growth trajectory continues, the founders believe they could be the fastest ever independent drinks brand to become a unicorn, worth US$1 billion ($1.38 billion).

“It’s an inevitability,” Hartmann says.

Next year, the business will move into 20 or 30 new markets, he adds, and the category is growing fast worldwide.

“We focused on building a great business and a loved brand, and we’ll see when we get to,” he adds.

“We’re still getting started.”