The tea product supplier has become the fourth business backed by University of Maryland Momentum Fund.

Zest Tea, a US-based tea product supplier, has received $1m in a round co-led by University System of Maryland’s venture vehicle Maryland Momentum Fund, reported on Tuesday.

Lord Baltimore Capital also co-led the round, with participation from assorted angel investors. Momentum Fund and Lord Baltimore Capital each supplied $300,000.

Founded in 2014, Zest Tea sells flavoured tea products with similar caffeine content to coffee to retail and convenience stores.

Zest’s first product, a canned tea drink available in three flavours, launched in late 2017 and the company now also offers tea bags and loose tea products. The funding will enable it to extend distribution in the mid-Atlantic and New York markets.

Zest Tea had previously raised a total of $1.2m in debt across three rounds, according to regulatory filings, including $60,000 received from undisclosed investors in May 2018. It is listed as a portfolio company of Empire Angels and Baltimore Angels.

Maryland Momentum Fund is a $25m vehicle focused on USM-linked businesses which launched in March 2017 with a $10m contribution from the university system.

Zest Tea is the fund’s fourth investment, following University of Maryland College Park-founded jet propulsion company North American Wave Engine and smart stove producer MF Fire, and NextStep Robotics, a medical device maker based on research from several Maryland institutions.

James Fayal, co-founder and CEO of ZestTea, said: “One of the biggest hurdles for new beverage companies is building a strong ground game to demo and merchandise the product on shelves in order to increase sell-through.

“[This round] gives us the ammunition we need to compete against the well-capitalised incumbents in the tea and energy drink markets.”

Feature image courtesy of Zest Tea