Alice Mushrooms Raises $8m as Functional Food Replaces Snacking and Alcohol
- Marc Violo
- Sep 17
- 2 min read
Updated: Sep 18
Too long to read? Go for the highlights below.
Functional mushroom chocolate brand Alice Mushrooms secures $8m Series A led by NewBound Venture Capital, with backing from Unilever Ventures and DJ Tiësto
Company expects eight-figure revenue this year with 40% year-over-year growth, targeting expansion into 1,300 retail doors
Launch coincides with declining alcohol consumption amongst Americans, particularly young adults, as functional foods gain mainstream acceptance
The Rise of Functional Indulgence
The American snacking landscape is undergoing a fundamental shift. Where highly processed, artificially enhanced products once dominated supermarket shelves, consumers now gravitate towards protein-rich options free from seed oils and enhanced with adaptogens. Alice Mushrooms has been positioning itself wisely to fit this evolving consumer trend.
Founded in October 2022 by Lindsay Goodstein and Charlotte Cruze, the brand offers four distinct chocolate products targeting specific consumer needs: sleep, focus, arousal, and social elevation. The latest addition, Party Trick, launched Tuesday alongside the company's $8 million Series A funding announcement.
NewBound Venture Capital led the oversubscribed round, with participation from Unilever Ventures and electronic music producer Tiësto. The investment firm previously backed hair care brand K18, which Unilever acquired in 2023, suggesting a strategic pipeline for portfolio companies.
Replacing Social Lubricants
Alice Mushrooms' timing appears prescient. Alcohol consumption among American adults has declined to 54%, according to recent Gallup data, with young adults leading the retreat. The demographic that once drove nightclub revenues—those aged 18-34—has seen drinking rates plummet from 59% in 2023 to 50% today.
This cultural shift creates opportunities for alternative social enhancers. Alice Mushrooms plans to demonstrate this thesis through chocolate-themed bottle service at Los Angeles nightclubs, positioning functional ingredients as sophisticated substitutes for traditional intoxicants.
The company's products eschew common sleep aids like melatonin in favour of organic Lion's Mane, Cordyceps extracts, Ashwaganda, and Reishi mushrooms. This formulation strategy reflects broader industry trends identified in market analysis: whilst both American and Canadian functional mushroom brands focus on immunity, energy, and stress relief, American companies emphasise lifestyle integration over pure potency.
Commercial Trajectory
Alice Mushrooms achieved seven-figure revenue in its first twelve months, with the team projecting eight-figure earnings this year through 40% year-over-year growth. Current retail distribution includes trendy outlets like Erewhon and Pop Up Grocer, with expansion into 1,300 doors across two undisclosed chains planned for October.
The brand expects wholesale retail sales to surge 250% year-over-year in 2025, reflecting mainstream acceptance of functional foods. This trajectory aligns with industry observations that American brands successfully leverage retail partnerships alongside direct-to-consumer strategies, contrasting with Canadian competitors who remain primarily online-focused.
Market Positioning Strategy
Alice Mushrooms' branding deliberately balances intrigue with accessibility. Rather than embracing overtly psychedelic aesthetics, the company employs subtle visual cues that capture attention without alienating mainstream consumers. This approach enables expansion beyond traditional adaptogenic mushroom enthusiasts into broader wellness demographics.
The strategy appears effective in driving social media engagement, with the juxtaposition of "chocolate mushrooms" compelling users to pause their scrolling. As functional food emerges as one of the most dynamic growth areas in consumer wellness, Alice Mushrooms' innovative retail approach positions it advantageously within this expanding market.
