He explained Soylent considered fundraising and partnering with other brands, but because Starco is a publicly traded company accessing capital should be “a little bit easier … than a private company.”
Starco appealed to him as a partner because it “had figured out a way to really use creative marketing to accelerate growth," and because "they're very comfortable with innovation, and they're really looking at ways to acquire these behavior-changing brands ... to grow the business and take it further," he added.
Soylent brings to Starco "a little bit of bulk economically, and we're bringing a little bit of a more mature organization," Vangelov said.
On the personnel side, Soylent is “trying to create as much continuity,” and “everybody who works for Soylent will continue to work for Soylent.” Not only will Vangelov stay on as the brand’s CEO, but he will also join Starco’s board of directors. Additionally, Soylent’s current shareholders “aren’t cashing out,” and he’ll serve as a representative for those shareholders to Starco.
Proskauer Rose LLP represented Starco, and Sheppard Mullin represented Soylent in the transaction. Details of the deal weren't disclosed as of press time.
Not about profitability, all about growth
While some plant-based food and beverage companies are dealing with economic headwinds and scrambling to find funding, don’t count Soylent among them, Vangelov said. Since joining the company in 2018, Vangelov has prioritized sustainable growth for the brand, which has led to profitability, including a positive cash flow, profit, and income.
“It's not really about how do we survive another quarter, or we're looking for another investment to do so,” Vangelov said. “We're actually doing the opposite. Soylent is kind of the bigger, more mature business that is joining Starco that's a little bit earlier in its trajectory.”
Soylent also plans to bolster its positive economic metrics by exploring synergies with other Starco brands.
While the exact synergies will take time to develop, Vangelov highlighted Starco’s Art of Sport brand as one that Soylent can work with by finding ways to innovate around healthy living and wellness. Looking to Starco’s alcoholic-infused whipped cream brand Whipshots, the brand was able to leverage its skillsets, connections (including with Cardi B), and the abilities that led to one of the most successful alcohol launches ever, which demonstrated Starco’s ability to market, he added.
"We can see how a brand like [Art of Sport] can cooperate with a product like ours and really create products that are new, that are engaged, and actually piggyback on ... Soylent's technology that we have developed … but also piggyback on their brand to really tap into new audiences and into new consumers," Vangelov said.
“Soylent’s potential to grow its base and expand in adjacent category whitespaces will be game-changing,” Starco CEO Ross Sklar said in the press release.
Ensuring flavor and function moving forward
Soylent also plans to continue down the path it laid three years ago “to create an economic and a business model where … function and taste are hand-in-hand,” Vangelov said.
As proof of this plan working, Vangelov shared that Soylent was recently recognized with the 2023 Product of the Year USA Award under the meal replacement category. While the plant-based segment overall might be facing some challenges, Vangelov noted that Soylent and others find success when they continue to innovate and provide consumers with products he says are great-tasting and also functional while keeping an eye on profitability and growing smartly.
“The companies that do well, they innovate and iterate… It's a slow process where you start with something, and you just can never be satisfied. You need to continue to improve; you need to continue to do things, and this has been … our mantra internally.”