Mushroom Coffee Maker Ryze Could Be The Next Billion-Dollar Drink—Or A Warning Of A Bubble

Key Concepts

• Mushroom Coffee: A beverage combining coffee beans with extracts from medicinal mushrooms.
• Functional Beverages: Drinks marketed for health benefits beyond basic hydration (e.g., immunity, digestion).
• EBIDA: Earnings Before Interest, Taxes, Depreciation, and Amortization – a measure of profitability.
• Customer Churn: The rate at which customers stop subscribing to a service.
• Retail Sales vs. Revenue: Retail sales represent total sales at the point of purchase, while revenue is the income a company actually receives.

Rise: A Potential Billion-Dollar Brand or a Bubble?

This report examines Rise, a leading mushroom coffee brand, assessing its potential for continued growth and identifying potential challenges. The company, founded in 2020 by Rashad Hussein and Andre Wernern, has rapidly expanded, capitalizing on the growing functional beverage market.

Market Overview & Rise’s Position

The functional beverage market reached $50 billion in annual retail sales in the past year, with projections estimating $62 billion by 2027. Mushroom coffee brands, including Rise, Everyday Dose, Mudwater, For SIGMATIC, and M, collectively generate approximately $1 billion in annual retail sales, according to Grand View Research. Rise has emerged as the bestselling mushroom coffee brand in America, achieving over $300 million in annual revenue in the last year – a 50% increase from the previous year. This growth has been achieved entirely through direct-to-consumer online sales, primarily via subscription models ranging from $80 to $100 per month, with a 6oz bag of coffee costing $45.

Expansion into Brick-and-Mortar Retail

Rise recently launched in over 1,900 Target stores, marking its first foray into brick-and-mortar retail. This launch includes three exclusive latte flavors alongside its signature instant coffee and sticks. CEO Rashad Hussein stated, “This is giving us the validation that everything we've built over the past 5 years really has legs to be a true coffee disruptor. We'll be launching in a big way and going to make the most out of it.” The expansion aims to meet growing demand and broaden access to functional coffee.

Product Composition & Marketed Benefits

Rise’s blend consists of six organic mushrooms – lion’s mane, cordyceps, reishi, turkey tail, shiitake, and king trumpet – combined with Arabica coffee beans from Mexico. These mushrooms are marketed for their potential to boost energy, support mental clarity, and promote gut health. While mushrooms are known to contain antioxidants and have been the subject of scientific studies regarding their individual benefits, there are currently no clinical studies specifically supporting medical claims about mushroom coffee itself.

Financial Performance & Valuation

Forbes estimates that Rise could be valued at $600 million in an acquisition scenario, representing twice its current revenue. The co-founders, Hussein and Wernern, collectively own an estimated 60% of the company. Rise has raised a relatively modest $4.15 million in funding from PS27 Ventures and Riverbay Investments. However, the company was reportedly for sale in 2025 but failed to attract credible buyers. Forbes estimates a 2025 EBIDA margin of just 3%, indicating barely profitable operations.

Concerns Regarding Sustainability & Customer Retention

Industry insiders suggest that Rise invests heavily in online marketing and customer acquisition, leading to “insane churn” among subscribers who eventually cancel their subscriptions. The company declined to disclose its repeat purchase rate, instead highlighting its private Facebook group with approximately 500,000 members as evidence of strong customer engagement. The rise in popularity also coincides with increased coffee prices – up as much as 50% at the end of 2025 – due to droughts and US tariffs on coffee-producing countries, potentially providing favorable economic conditions for Rise’s growth.

Founder Dynamics

The report notes a potential internal dynamic regarding the Forbes 30 Under 30 list. CEO Rashad Hussein was included in the 2023 class, while Chief Marketing Officer Andre Wernern was not, reportedly because Hussein did not include her in his application.

This report is based on information from Khloe Svino’s article on Forbes.com, as reported by Kieran Meadows from Forbes.