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Apr 08, 2018

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Good Morning: Detox Shot Morning Recovery Raises $8.2 Million

Arnold Schwarzenegger. “Our thinking was the biggest value add that we can get from investors would be non-tech, so people who have created beverages, who are in the CPG space, or even VCs who are more into beverage,” he said. “With these guys, we sort of work with the guys where we personally connected and liked the most.” Lee said the investment would be used to support research initiatives, help grow the company’s retail presence and boost marketing efforts ahead of this week’s launch of the new version of Morning Recovery, which will feature new packaging and a new formulation that improves the efficacy of its unique natural ingredient. Beverages and supplements such as Hangover Joe’s, PartyAID, and Life Support, a 3.4 oz. shot which also uses the same active ingredient as Morning Recovery, have all positioned themselves as tonics for rebounding from a night of heavy drinking, but the broader viability of a hangover-based category is still unclear. By taking a science-based approach to treating hangovers, Lee is betting that Morning Recovery will be the brand to unlock what he views as a $113 billion global market opportunity. While working as a project manager at Tesla, Lee discovered dihydromyricetin — aka DHM, the active ingredient in Morning Recovery — during a trip to Korea. During the course of nights spent drinking with the locals, he noticed that alcohol detox drinks made with DHM — a flavonoid extracted from the fruit of a Japanese raisin tree (Hovenia Dulcis) with a long history in traditional Asian medicine — were everywhere. “Everyone was obsessed with these hangover drinks,” which are meant to be consumed before falling asleep, Lee said. Upon further investigation, Lee discovered research by Dr. Jing Liang, MD, PhD, a professor at the School of Pharmacy at the University of Southern California (USC), which showed how DHM could help minimize the effects of alcohol in animals. Liang subsequently joined the company as a partner, and has helped give 82 Labs the scientific foundation needed to explore hangovers in a way that hasn’t previously been done. The brand has developed an extraction method that it claims produces a DHM extract with higher bioavailability than other processes. “Part of the funding is also to understand that we need to take some of the money and flip it around; instead of going for solution first with DHM, we need to look at the problem first and understand fully what’s happening on a molecular level to your body when you consume alcohol,” Lee said. That commitment is backed by financial resources; around $1.8 million from this round of funding will be directed towards research projects, supplementing a $250,000 contribution to support DHM studies at USC that occurred before the investment. Lee’s interest in the subject goes beyond how the body actually deals with too much alcohol; he talked about exploring the economic impact of hangovers, which he said cost the U.S. economy $170 billion in lost productivity annually. That approach will fuel 82 Labs as it extends beyond hangover remedies; “The idea has always been that we are going to create products that foster mental sharpness and productivity,” Lee said. However, he noted that any other potential SKUs are over two years away, giving the company time to focus on building Morning Recovery. “At the end of the day, we’re a business, not a research unit,” he said. “[Research] has to have a clear goal of how we can use what we’ve found so we can come up with a better formulation that helps people detoxify.” In addition to its background in science, Morning Recovery also had another card to play: access to a network of influential contacts in Silicon Valley.

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