SuperMush has a valuation cap of $11 million. SuperMush has shown promising growth with $1.2 million in revenue for 2022, making this valuation appropriate. A 9x revenue multiple is on the lower end for the online private markets, indicating a good deal for potential investors. 

The functional mushroom market is gaining traction as more consumers become aware of the potential health benefits. According to a report by Grand View Research, in the US alone, the market size for functional mushrooms is estimated to be approximately $3.2 billion, growing annually at 11.6%. 

Several trends are driving the functional mushroom supplement space. Consumers are increasingly seeking natural and holistic health solutions, leading to increased demand for functional mushroom supplements. These supplements offer a convenient and natural way for individuals to incorporate the health benefits of functional mushrooms into their daily routines. Second, ongoing scientific research on functional mushrooms and their potential in areas such as immune support, gut health, and mental well-being is driving consumer interest and confidence in these supplements. Finally, expanding product offerings, including proprietary blends of medicinal mushrooms, provides consumers with a wide range of options based on their specific health needs. The increasing availability of functional mushroom supplements through mainstream retail channels enhances accessibility and market reach.

SuperMush was co-founded by Alli Schaper and Brian Friedman. Schaper began her career in consulting at EY. Shortly after, she gained exposure to the consumer goods sector by founding Zigii, a wellness products subscription box she sold to her first employee. She is very involved in mushrooms, founding a collective to educate people on the benefits of microdosing psychedelics.

Friedman is also a serial entrepreneur, he raised $2.5 million from leading investors, including Marc Benioff (CEO of Salesforce) and Tim Draper to build Loopd, a smart badge for in-person events. The company was acquired by Aventri. 

The pair has impressive experience in the consumer goods space and as successful entrepreneurs. There is little doubt in their ability to lead and execute. 

SuperMush faces a competitive market with lots of direct and indirect competition, especially as functional mushroom use becomes increasingly trendy. For example, an energy supplement like mushroom mouth sprays could indirectly compete with coffee, energy drinks, and shots. Nothing can be done to create a moat of defensibility beyond consumer traction and brand loyalty. The company’s partnerships and ability to establish a strong brand presence will be crucial in differentiating itself from the numerous competitors in the market. And Supermush is off to a great start. Alli and her team have made it a point to highlight Supermush as a lifestyle brand. The parent company, Multiverse, has established an industry presence through events, education, and community, all funneling into e-commerce. 

She considers Four Sigmatic and MudWtr closest direct competition, though both are functional mushroom-infused coffees and beverage powders, not mints or sprays. Both Four Sigmatic and MudWtr paved the way for the broader adoption of functional mushrooms, perhaps doing more good for SuperMush than harm by means of competition. From a branding standpoint, SuperMush is tailored more toward a younger audience. There is certainly no shortage of functional mushroom brands, but SuperMush relies heavily on branding and marketing to stand out, targeting a younger crowd. This seems to have worked well, given the early traction. Functional mushroom supplements are trendy but unnecessary, and targeting a younger generation means targeting a customer base with less expendable income. 

SuperMush has demonstrated strong traction since its inception. The company generated $1.5 million in revenue within the first 14 months of operation, indicating a successful market entry and consumer demand for its products. SuperMush has already sold over 55,000 superfood supplements. SuperMush has high product margins (around 96%), indicating efficient cost management and the potential for near-term profitability. According to Alli, the company has five months of runway, with a monthly burn rate of $40-$55k. Ideally, a startup should have 12-18 months of runway, but investors are hesitant in the current market, and five months is more than we see for most startups raising online. This Wefunder raise should contribute to a more robust financial standing, and Alli and her team have already drastically improved burn.  

SuperMush is backed by notable venture capital investors, including Vibrant VC, Humans VC, and Mystic VC, further validating the company’s potential. Angel investors include Marc Randolph, co-founder and CEO of Netflix, and NHL player Auston Matthews. There is a clear interest in the functional mushroom space from these celebrities and big-name investors, and the trendiness is backed by impressive early traction. Alli believes the team is on track to bring in $4 million in revenue for 2023.

SuperMush operates in the highly competitive industry of wellness supplements, facing stiff competition from various established and emerging brands. Plenty of direct and indirect competitors can eat up this market share. Additionally, though the Supermush products are not psychedelic, there will likely be hesitation among consumers unfamiliar with functional mushrooms, which may impact product adoption. The early adopters may represent a more knowledgeable subgroup. Over time, revenue growth may decrease as customer acquisition expands beyond early adopters. 

Targeting younger generations may also be risky, as the products are not cheap. At $18 for a pack of mints and $27 for a mouth spray, SuperMush may be out of the price range for a large segment of this young target audience.

SuperMush faces particular challenges in the competitive wellness supplements industry. The market is crowded with both direct and indirect competitors that can potentially erode its market share. Although SuperMush’s products do not contain psychedelic substances, there may still be consumer hesitation among those unfamiliar with functional mushrooms, which could affect product adoption. Early adopters may represent a knowledgeable subgroup, and as customer acquisition expands beyond this group, revenue growth may slow down. Targeting younger generations is also a risk, given the relatively high prices of SuperMush products, $18 for mints and $27 for mouth sprays, which may be outside the budget of a significant portion of the young target audience.

Led by co-founders Alli Schaper and Brian Friedman, SuperMush has achieved impressive early milestones, generating $1.5 million in revenue within its first 14 months and selling over 55,000 superfood supplements. With notable backing from venture capital investors and angel investors, including Vibrant VC, Humans VC, and Mystic VC, SuperMush is well-positioned for growth. The functional mushroom market is trending and has an impressive annual growth rate, driven by increasing demand and ongoing research on the health benefits of functional mushrooms. The brand’s emphasis on targeting younger consumers and its status as a lifestyle brand further contributes to its success. The founders’ previous entrepreneurial exits add to their credibility and expertise in leading SuperMush toward continued expansion. Additionally, SuperMush stands out from the crowd by offering supplements in mouth sprays and mints. Most other competitors offer beverages. This is a more direct route to ingest the supplements, is more portable, and may appeal to those who don’t like the taste of the mushroom beverages offered by the competition.

SuperMush is a functional mushroom supplement brand that has achieved impressive early milestones. The company generated $1.5 million in revenue within its first 14 months and has sold over 55,000 superfood supplements. Backed by venture capital and angel investors, SuperMush is well-positioned for growth. However, the brand operates in a highly competitive industry, facing the risk of losing market share to numerous competitors. Additionally, consumer hesitation towards functional mushrooms and the potential slowdown in revenue growth beyond early adopters pose challenges. Targeting younger generations may also be risky due to the relatively high prices of SuperMush products. Nonetheless, with the founders’ experience and the projected growth of the functional mushroom market, SuperMush has potential opportunities for success.

Report written by KingsCrowd Investment Research Manager Olivia Strobl on July 14, 2023.