The investment, of which the venture capitalists now hold 7% of the startup, will be used to finance distribution plans, recruit additional manpower and expand existing product lines as Square One outline their ambitions adding "We believe in both the direction of market and the strength of the team.
“Saturo has the potential to establish a new category of meal replacement drinks and will soon be an integral part of our beverage range, like Red Bull or Coca-Cola."
Saturo, founded in early 2017, has made available its ready-to-go range of meal replacement drinks, a product formulated to contain a balanced blend of proteins, lipids, carbohydrates, minerals and vitamins needed to fuel the body.
They are primarily aimed at individuals with busy lifestyles, with one bottle (500ml) containing up to 25% of the daily balanced nutrient intake. The product is also available in 330ml bottles.
A convenient alternative to fast food
According to Saturo’s founder Hannes Feistenauer, this ensures the individual is satiated for more than three hours, providing a convenient alternative to unhealthy fast food.
"We look forward to further expanding into the European market with Square One Foods as a strong partner, and to continue developing innovative products for our customers.”
"We have achieved a lot over the past 18 months and are already the leader in the European sector for ready-to-drink Complete Food,” he claimed.
Confidence in the food and beverage industry, specifically in the functional food arena, remains high especially the concept of personalisation, although for Square One Foods’ partner Andre Schneider admits this is a relatively recent thing, with mobile technology hogging most of the recent limelight.
“With much of the startup support landscape (venture capital as well as state financed grants) focused on tech and apps, food and beverage startups had a hard time getting the attention they deserve though we see that this is slowly improving.”
“Apart from a shortage in capital, food and beverage startups are also facing strong competition from established brands entering the retail market and finding their place on the shelf.
“This is why we as Square One Foods have made it our priority to help our portfolio companies define their sales strategy and increase their distribution through our retail collaboration network.”
In delving into the startup support available, Feistenauer adds that the firm kept the current financing round deliberately small as they also received significant funding from the Austrian government.
Feistenauer also expects a large Series A within 6-9 months and are already involved in early talks.
“We are working on becoming a global leader and North America and Asia are both obvious markets for us,” he said. “We will soon have great news specifically for US customers.”
Saturo represents the fourth food-related startup that Austrian-based Square One have committed to combining a financial investment strategy with a support network available that gives the best chance of success.
“At Square One Foods, we are focusing on early stage companies because this is where we can deliver most value-add (apart from cash),” said Schneider.
“We support our portfolio companies for example through our collaborations with retail chains, media houses and banks and spend a significant amount of time with each team sparing ideas and defining their strategy.
“This is usually very helpful in the early-phase we invest in and less so in the later stage where other investors might be the better fit.”
Other functional food trends
Schneider added that Square One’s early-stage intervention works well for personalised nutrition – an industry still considered in its infancy.
“Other trends such as health conscious consumption (think low sugar) are already much further developed although we still see a lot of potential in this space too,” he added.
“Another interesting observation is the continuous search for sustainable alternatives to meat based products (insects or veggie alternatives) but also in the field of packaging (bio-degradable packaging).”
In addition to Saturo, the startups Trinkkost, Runtime, Bertrand and Huel compete in the high-calorie drinks and powder meal segment in Europe.
Over in the US, Soylent are considered the pioneers of this kind of food, having launched its powder in 2014. The company have since expanded its range with ready-made drinks becoming available at the end of 2015.
For Feistenauer though being at the start of something he truly believes will be revolutionary is the ultimate motivation as he outlines long-term goals that include plans for personalised meals for each customer.
“Obtaining a technological advantage in regards to this will be a significant hurdle for our competitors,” he said.
“Personalised nutrition will take 2-3 years to really take off, but then it will gradually become one of the largest changes in the food industry in the last decades.”