PepsiCo announced on Monday that it is purchasing the prebiotic soda brand Poppi for $1.95 billion. This acquisition provides PepsiCo with a rapidly growing brand in the increasingly popular functional beverage market.

PepsiCo's Chairman and CEO, Ramon Laguarta, emphasized that consumers are increasingly seeking convenient and delicious options that align with their lifestyles and reflect their growing interest in health and wellness.

The deal involves an expected $300 million in cash benefits, resulting in a net purchase price of $1.65 billion for PepsiCo.

Allison Ellsworth, co-founder of Poppi based in Austin, Texas, stated that teaming up with PepsiCo will enable Poppi to expand its market presence. Acknowledging the uniqueness of Poppi, Ellsworth expressed confidence that PepsiCo will support the brand's future growth and innovation.

Poppi, previously known as Mother Beverage, was created by Ellsworth in 2015 out of a personal need for a healthier soda alternative. The product gained traction in 2018 after a successful appearance on "Shark Tank," leading to a rebranding overseen by investor Rohan Oza. This rebrand resulted in the colorful and fruit-centric cans that define Poppi.

Rohan Oza, co-founder of CAVU Consumer Partners, which has previously invested in successful beverage brands like Oatly and Bai, expressed excitement about the partnership with PepsiCo and the opportunity to introduce Poppi to a broader audience.

While Poppi has experienced significant success, it has also faced challenges, such as a class-action lawsuit filed last summer by a consumer questioning the brand's claims related to gut health benefits.