Healthy soft drinks start-up Happy Drinks Group plans IPO

The Happy Drinks Group, previously Skinny Drinks, has launched a crowdfunding campaign it hopes will raise £7.5 million. The sum will be put towards funding new bottling and canning lines at its factory in Liverpool that the start-up’s two co-founders will allow it to grow quickly enough to see it launch an IPO within 18 months.

The Happy Drinks Group was founded as Skinny Drinks three years ago and is the first company to offer a zero-sugar, zero-calorie tonic water and created Drnk, a sugar-free children’s drink in partnership with the Emoji brand. The company’s two co-founder’s, who were friends before launching the start-up, are Steve Wilkinson and Ian Minton, and were inspired by Minton’s struggles to find soft drinks suitable for him as a diabetic.

Happy Drinks Group, which also sells the Edin Bay premium tonics brand, have been approached by larger companies interested in buying the start-up but Wilkinson, who previously worked in the City, says the pair are focused on an IPO rather than an exit. He believes the £7.5 million the company is currently raising through the Seedrs crowdfunding platform will allow them to take the company to that stage alone. He says:

 “We’re not looking for an exit route. An IPO would enable us to pursue a game-changing revolution in the soft drinks market.”

The co-founders are convinced they are targeting an uncatered-to niche highlighted by Minton’s own soft drink struggles. He explains:

“I went for a life assurance medical and was told I had diabetes. I’d never even come across the word diabetic. It was a life-changing moment and I was put on insulin. Even today I can’t get a product that suits me. I can’t even have Fevertree, whereas with us you can have your tonic and drink it.”

Excluding the new funds, the Seedrs crowdfunding campaign implies an equity value of £48 million for Happy Drinks Group. The start-up’s existing investors include WH Ireland, Harwood Capital, GPIM and the British Business Bank Future Fund which invested in a 6.5% stake at a valuation of £9.8 million. Mr Wilkinson and Mr Minton still own 11% and 18% of the company respectively.

The company’s products, an initial six flavours were originally sold via Amazon, are now stocked by Waitrose, Marks & Spencer, Lidl and Booths. By September, Asda and Iceland will also be selling the company’s zero-sugar, zero-calories lines.