The 1st billionaire YouTuber is going after Coca-Cola and Pepsi

Variety just revealed that MrBeast pulled in $82 million in revenue in the last year. And so many think he will be the first YouTube billionaire.

Per this survey from Twitter, almost 74% of you think he will be.

I think you're wrong.

If I'm betting, my money is on another YouTuber to become the platform's first billionaire.

Instead of Mr Beast, it’ll likely be Logan Paul or KSI

Why?

Because of their equity in sports drink Prime

Given its insane growth, PRIME may be worth $3.09B to $8.36B (the full analysis is below).

And that would make Logan Paul and KSI both potentially billionaires

Let’s break it down in this valuation deep dive.

There’s lots of data and inter-relationships among players in this space so I’ll break this valuation deep dive down and cover the following:

• Prime Energy comparables
• Comparable revenue, valuation and multiples
• The secretive CPG incubator behind Prime Energy
• How Coke & Pepsi protect their market
• Prime valuation ranges & potential acquirers
• How much are Logan Paul and KSI’s stakes worth
• Stuff worth reading

All of the commercial and financial transaction data in this valuation deep dive is from CB Insights

I’d recommend grabbing a cup of coffee or a Prime as this is detailed.

Let's go.

PRIME ENERGY COMPS

For the purposes of this analysis, I’m going to use a slightly expansive set of comparables of Prime to arrive at a valuation.

These competitors include athletic drinks, energy drinks and even 1 water company.

Here’s the 16 comps I analyzed and considered in this analysis:

1. BODYARMOR Sports Nutrition
2. Gatorade
3. Powerade
4. CELSIUS Holdings, Inc.
5. Monster Energy
6. Rockstar Energy Drink
7. Fuze Beverage
8. GHOST
9. Nutrabolt
10. Lucozade Ribena Suntory
11. Bang Energy
12. Alani Nutrition
13. Liquid Death
14. Red Bull
15. Pedialyte
16. Liquid I.V.

REVENUE, VALUATION AND MULTIPLE COMPS

Warning: There are LOTS of numbers below as I break down each of these companies.

If you are more interested in Prime’s valuation, Logan Paul and KSI’s ownership stake and the secretive incubator behind Prime, you may want to skip this section.

Ok…so if you’re still reading this section, some things to note.

• Since many of the players above are private, data availability can be mixed but what is below will be the best and most comprehensive data out there
• The numbers below are inclusive of ‘whisper’ valuations and revenue which CB Insights picks up on.
• Pay particular attention to the multiple and growth rates as they’ll be important as we think about Prime’s valuation

Source for all the below data: CB Insights

1. BodyArmor

• valuation: $8B (2021)
• revenue: $1.4B (2021)
• multiple: 5.7x (valuation/revenue aka price/revenue multiple)
• revenue growth rate: 63.4% (CAGR 2014-2021)
• status: acquired
• current owner: Coca-Cola

BodyArmor was acquired by Coca-Cola for upto $8B in 2021. Coke previously had a minority stake in the company as did Keurig Dr Pepper.

2. Gatorade

• valuation: $8.3B (2000)
• revenue: $1.8B (1999)
• multiple: 4.6x
• growth rate: 6.3% (2019-2020)
• status: acquired
• owner: Pepsi

This one is a bit trickier and older so including more as a historical reference point. Gatorade was part of Quaker Oats which Pepsi acquired in 2000 for $13.8B when it had revenue of $3B. At the time, Gatorade was $1.8B of the $3B in revenue and so I’ve allocated the total valuation in-line with Gatorade’s revenue contribution. This is likely giving Gatorade too low a valuation given that it was the growth engine of Quaker Oats.

3. Powerade

Powerade was created by and is sold by Coca-Cola.

• revenue: $1.66B (2020)
• growth rate: 0.61% (2019-2020)
• owner: Coca-Cola

4. Celsius

• market cap: $13.1B
• revenue: $952.1 (TTM)
• multiple: 13.8x
• growth rate: 108% (2021-2022)
• status: publicly traded (ticker: CELH)
• investors: Pepsi invested in 2022 at a $6.5B valuation

5. Monster Beverage

• market cap: $55.6B
• revenue: $6.69B (2022)
• multiple: 8.3x
• growth rate: 13.9% (2021-2022)
• status: publicly traded (ticker: MNST)
• investors: Coca-Cola invested in 2015 at a $12.9B valuation

6. Rockstar Energy Drink

• valuation: $3.85B (2020)
• revenue: $487M (2021)
• multiple: 7.9x
• status: acquired
• owner: Pepsi

7. Fuze Beverages

• valuation: $250M (2007)
• revenue: $90M (2006)
• multiple: 2.8x
• status: acquired
• owner: Coca Cola

8. Ghost

• revenue: $262M (2023)
• status: private
• investor: AB InBev

9. Nutrabolt

• valuation: $2.78B (current)
• revenue: $653.6M (2022)
• multiple: 4.3x
• status: private
• investors: Keurig Dr Pepper

Nutrabolt is the creator of brands such as C4 and Cellucor

10. Lucozade

• valuation: $2.1B (2013)
• revenue: $775M (2012)
• multiple: 2.7x
• status: acquired
• owner: Suntory

11. Bang Energy

• valuation: $362M (2023)
• revenue: $300M (2019)
• multiple: 1.2x
• status: acquired
• owner: Monster Beverage

Monster bought Bang Energy out of bankruptcy after Bang Energy lost a legal case that required them to pay Monster $293 million for false advertising.

12. Alani Nu

• valuation: $3B (2023) - rumored
• revenue: $343M (2023)
• multiple: 8.7x
• status: private
• investor: Congo Brands

Note: Alani Nu’s valuation is rumored as the company was reportedly for sale. They were incubated by Congo Brands - a name we’ll dig into below.

13. Liquid Death

• valuation: $700M (2022)
• revenue: $130M (2020)
• multiple: 5.4x
• growth rate: 259.4% (CAGR 2019-2022)
• status: private
• investors: Live Nation Entertainment, Science

Liquid Death is the sole water brand on this list of comps.

14. Red Bull

• revenue: $10.2B (2022)
• growth rate: 27.5% (CAGR 2021-2022)
• status: private
• owners: Yoovidhya family (51%), Mateschitz family (49%)

15. Pedialyte

• revenue: $102M (2013)
• owner: Abbott Labs

16. Liquid IV

• revenue: $1B (2020)
• owner: Unilever

Notes:

• The 1 company I was hoping there was more data about is 5-Hour Energy. It’s doing $1B in revenue and $300 net, but beyond that, founder Manoj Bhargava keeps info about the company quite limited. Ridiculously impressive company.
• BioSteel is another player worth highlighting that recently shut down. It was majority owned by cannabis company Canopy Growth and also backed by the likes of Patrick Mahomes but was shuttered in September 2023 after Canopy decided they’d no longer fund the business.

THE SECRETIVE INCUBATOR BEHIND PRIME

While the faces of Prime are influencers / YouTubers like Logan Paul and KSI and also now Jidion who is part of the Prime Squad, the company behind Prime and other beverages keeps a lower profile.

But it has developed a formula for launching influencer-led beverages.

The company behind the brand is Congo Brands.

What is Congo Brands?

Per CB Insights,

“Congo Brands is a full-service product CPG product incubation firm. It helps organizations with talent management, logistics, branding, merchandising, and product development services. It was founded in 2014 and is based in Louisville, Kentucky.

They are described as a white-label beverage manufacturer. Generally, their playbook is to partner with influencers who they work alongside to create beverages that they can jointly create and market to the influencer/content creator's audience who the influencer than markets to in exchange for equity in the entity.”

Its most notable brand is obviously Prime Energy but they also incubated Alani Nu, an energy drink targeting females and has worked with the likes of Kim Kardashian to launch limited-edition flavors. Alani Nu as you can see in the valuation, revenue data above was rumored to be on the block for $3B recently.

Congo Brands was founded by and is owned & operated by Trey Steiger and Max Clemons and appears to have built a playbook for incubating and launching beverage brands. Their other incubated brand per CB Insights is 3D Energy Drinks.

COCA-COLA & PEPSI: KEEP FRIENDS CLOSE, KEEP ENEMIES CLOSER

While 百事 has a clear lead in the athletic drink market (via its ownership of Gatorade) and 可口可乐公司 has a solid lock on the #2 spot (via Powerade), the 2 are incredibly nimble and aggressive when it comes to protecting their market share.

As the list of comps above highlights, 7 of the 16 players in the market are owned by or have been invested in by Pepsi or Coca Cola.

• Pepsi owns Gatorade and Rockstar Energy and invested in rocketship Celsius.
• Coca-Cola owns Powerade, BodyArmor and Fuze and invested in energy drink behemoth Monster.

If you are making moves in the athletic drinks market, Coca-Cola or Pepsi are aware of you and may eventually be a capital and distribution source via an equity investment or even via acquisition. Until then, they will be formidable competitors.

PRIME ENERGY VALUATION ESTIMATES

So what is Prime actually worth?

That’s the billion dollar question.

There is a range of valuation possibilIties.

The first important thing to settle on is Prime’s revenue.

• Reports put 2022 Prime revenue at $250 million.
• Based on some run rate trend data from CB Insights, Prime may be on track for $540 to $672 million of revenue in 2023. For simplicity, we’ll take the average of $606 million.
• Given whisper revenues by private companies are often overstated for PR benefit, we’ll apply a 25% discount to this $606 million to be conservative giving us revenue of $455 million.

Now the question is what multiple should we use?

If we look at the multiples from above for publicly traded companies or deals done since 2020, we’d use the multiples of Body Armor, Monster Beverage, Rockstar Energy, Nutrabolt, Celsius and Liquid Death.

The median revenue multiple of those companies is 6.8x.

The high valuation multiple to use would be that of Celsius Holdings which trades at a 13.8x multiple.

It’s not unrealistic to assume Prime could trade at a Celsius multiple given growth rates are significantly above market and revenues are in a similar neighborhood.

So we’ll use those 2 multiples and the revenue estimates to come up with a range of valuations for Prime.

Scenario 1: Median industry multiple + conservative revenue

Valuation: $3.09B

(6.8x multiple x $455 million revenue)

Scenario 2: Median industry multiple + aggressive revenue

Valuation: $4.12B

(6.8x multiple x $606 million revenue)

Scenario 3: Celsius multiple + conservative revenue

Valuation: $6.28B

(13.8x multiple x $455 million revenue)

Scenario 4: Celsius multiple + aggressive revenue

Valuation: $8.36B

(13.8x multiple x $606 million revenue)

I’m going to keep things simple and take the average of the above 4.

This gives us a valuation for Prime of $5.46B.

Candidly, I think this may be conservative.

Prime’s ability to lock down major sponsorship deals with the likes of Arsenal, The UFC, FC Barcelona and BASE Sports Group among others and its rapid growth make it very possible that it trades at the high end of those valuation scenarios.

Those commercial transactions are also taken from CB Insights.

POTENTIAL ACQUIRERS

The beverage market for energy and athletic drinks is incredibly large and messy. That is good news for Prime as it means there are multiple potential suitors.

The obvious choices are, of course, Pepsi and Coca-Cola. They’re aggressive and nimble when it comes to protecting and growing their share of the market either via investment, distribution partnerships or outright acquisitions.

But there are several other players who’d love to find a way to make a splash in this market including:

• Keurig Dr Pepper Inc.
• 安海斯 - 布希英博
• 联合利华
• Beam Suntory

Celsius and Monster because of existing tie-ups with Pepsi and Coca-Cola seem less likely to be potential acquirers of Prime.

SO HOW MUCH ARE LOGAN PAUL & KSI WORTH?

Given Congo Brands is behind Prime, it is unclear how much Logan Paul and/or KSI own of Prime.

However, media reports suggest Paul owns 20% of Prime.

At $5.42B, that would make Logan’s stake worth $1.08B. It may also mean KSI is on track to be a billionaire.

And those are your first YouTube billionaires - not Mr. Beast.

And the YouTube billionaires that Coca-Cola, Pepsi or any number of others hoping to enter the market should be tracking closely.

As always, if you believe any of my assumptions in the above are incorrect, please comment and I'll update the analysis if the additional context dramatically changes the results

If you like nerding out to analyses like this, sign up for the CB Insights newsletter and join 600,000+ others.

Sign up here >>> www.cbinsights.com/newsletter

STUFF WORTH READING

Prime Energy CB Insights profile - https://app.cbinsights.com/profiles/c/ZxnQg

Congo Brands CB Insights profile - https://app.cbinsights.com/profiles/i/gM93b/overview

• https://cstoredecisions.com/2022/04/05/energy-drink-sales-surge-as-innovation-continues/
• https://www.lifestyleasia.com/bk/culture/people/red-bull-family-net-worth
• https://huddleup.substack.com/p/patrick-mahomes-backed-sports-drink
• https://www.beverage-digest.com/articles/843-unilever-owned-liquid-iv-focused-on-1b-brand-status
• https://www.wsj.com/articles/pedialyte-sales-growinto-an-adult-market-1431560650
• https://www.wired.co.uk/article/congo-prime-sports-drink
• https://frontofficesports.com/logan-paul-ksi-prime-hydration-youth-sports/
• https://www.coca-cola.com/za/en/media-center/sprite-limelight
• https://www.cnbc.com/2022/11/26/liquid-death-ceo-mike-cessario-we-chose-the-dumbest-possible-name-for-water.html
• https://www.foodnavigator-usa.com/Article/2014/08/14/Coca-Cola-enters-strategic-partnership-with-Monster-Beverage-Corp
• https://www.reuters.com/markets/deals/energy-drink-maker-alani-nu-explores-options-including-sale-2023-07-18
• https://www.therichest.com/rich-powerful/the-prime-hydration-story-how-it-became-a-big-name-in-the-beverage-business/