The objective is to develop a “conversational commerce” channel that uses text messages to change the way consumables are sold.

Iris Nova Ltd., a beverage startup that sells directly to consumers via text messages, has for the first time added third-party brands to its platform.

The retailer announced Tuesday at the Groceryshop conference in Las Vegas that four new brands join Iris Nova’s own Dirty Lemon beverage brand:

  • Minna, brewed sparkling tea with no added sugar or sweeteners.
  • Sanzo, a line of Asian-inspired flavored sparkling water.
  • Halo Sport, sports drinks manufactured by a female- and minority-owned company. Halo makes beverages with organic lemon juice, ionic electrolytes and 72 trace minerals.
  • Vina, a sparkling apple cider vinegar beverage blended with organic juice launching later this fall.

Iris Nova plans to have 12 beverages on its platform by the end of 2019, says Iris Nova CEO Zak Normandin.

The retailer has lofty goals. The brand launched to challenge the traditional distribution systems that exist in the beverage sector, Normandin says. The objective is to develop a “conversational commerce” channel that uses text messages to change the way beverages—and eventually, other consumables—are sold.

Iris Nova CEO Zak Normandin

Iris Nova CEO Zak Normandin

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“We launched one single product. But to support that, we built a technology platform which…allows customers to order products over text message,” Normandin says. After its initial launch of Dirty Lemon, Iris Nova added 14 beverages to the line, which it manufactures.

From that point until now, Iris Nova developed a software-as-a-service platform that other brands can use and gather data from, allowing them to build a direct relationship with their customers. Consumers using the Iris Nova service never have to re-enter payment and shipping information to order brands added to the platform.

Iris Nova ships orders for one-day delivery from seven warehouses in the United States. The company has plans to expand to Europe later this year and expects to launch same-day delivery in Chicago, Los Angeles, Miami and New York City by the end of 2019, Normandin says. The company sells products in about 500 retail stores, he says.

The wholesale part of the business “is a marketing initiative” intended to support customer acquisition. “By selling into retail stores, we actually have the opportunity to acquire customers profitably, which is great,” he says. Iris Nova operates a single cashierless New York City store—called The Drug Store—where customers pay for drinks via text message. The beverage merchant says it has processed about 90% of its orders via text.

Iris Nova has attracted some big-name backers. In December 2018, it raised a $15 million round of seed funding and is in the process of closing on an additional funding round. That round valued the company at about $60 million, according to Bloomberg News.

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The December funding round included an investment from The Coca-Cola Co.’s Venturing & Emerging Brands unit. Other investors were venture capital firms, including GGV, Greycroft, CASSIUS, Imaginary Ventures, Betaworks Ventures, Lakehouse Ventures and Nebari Ventures, along with retired New York Yankee Alex Rodriguez and actress Kate Hudson.

Eventually, Iris Nova plans to go public, Normandin says, which will be under consideration after it gets to $100 million in revenue and is profitable. However, that could take three to five years, Normandin says. He declined to reveal the company’s current annual revenue.

Iris Nova used its funding so far to expand its portfolio of brands and further develop the capabilities of its SMS-based distribution platform, the retailer said.

Iris Nova also allocated $1 million to invest in the early-stage beverage brands it’s adding to the platform, Normandin says. In June, the retailer announced plans to invest $100 million over the next three to five years in startup consumer brands.

“We’re in a place now where we can actually really scale. And the goal is to be competing with Coca Cola and Pepsi one day,” along with other manufacturers of consumable products, Normandin says.

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Eventually, Iris Nova plans to offer other kinds of frequently replenished consumables.

“The technology and the infrastructure that we’ve built could easily be applied to any consumer category,” Normandin says. He says new categories could include beauty products, personal care and consumable home products.

Consumers can order Minna now by texting Iris Nova. Halo will launch later this month. Vina and Sanzo will launch in October.

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