SmartyPants Vitamins, which specializes in delivering vitamin formulas via a gummy delivery system, has raised $2.59 million via a crowd funding platform to drive new growth. Getting the money was nice, but saving time was even better, said company co founder Courtney Nichols Gould.
Traditional methods of raising funds for a startup that is starting to show some growth can require a lot of face time, Nichols Gould told NutraIngredients-USA. And that’s an asset that is in critically short supply for a small, rapidly growing company.
So SmartyPants partnered with a crowd funding platform called CircleUp that brings qualified investors together online where they can hear companies tell their stories and can also view backing documents via a secure server.
Time is of the essence
“When you are smaller CPG company, a lot of the traditional funding routes aren’t available,” Nichols Gould said. “I’m not raising enough money where venture capital is going to be interested and private the equity guys are like, if you want $20 million, then give me a call. If you are going out and beating the street and talking to angel investors, it takes an enormous amount of time."
“This took three phone calls where we got all the potential investors together. When you’ve got a small staff that makes a huge difference. For us it was a home run,” she said.
“With a wealth of experience, talent and outstanding growth, SmartyPants fits the trend of high quality, healthy brands in which investors and consumers are interested,” said Ryan Caldbeck, Founder and CEO of CircleUp.
CircleUp is an online social marketplace that helps small consumer and retail companies raise money directly from a community of individual investors. The crowdfunding startup focuses on high-growth consumer product and retail private companies and provides them with an efficient way to access a wide ranging, sophisticated investor network. In addition, CircleUp provides consumer and retail companies access to a community of value-added partnerships including General Mills, Procter & Gamble, SPINs and Presence Marketing.
Company founded to solve a problem
SmartPants was founded on the idea of addressing what Nichols Gould said is one of the key issues in the supplement sphere—compliance.
“The problem we were trying to solve was compliance. There are so many great vitamin products already out there. Quality is not the issue,” Nichol Gould said.
While there are certain subsets of supplement users who faithfully take their doses, such as sports nutrition devotees or dieters, it’s hard to imagine any them who would enthuse about swallowing capsules.
“If it sits on the shelf it’s not nutritious,” she said.
The gummy delivery format is popular with kids, Nichols Gould said, and adults like them, too, if the company’s growth curve is any measuring stick. SmartyPants launched about three years ago with a single children’s product that combines a full suite of vitamins with omega-3s from fish oil. The company later added adult gummies and gummies with added fiber. Since the launch of the company’s first products, sales are up about 1,000%, Nichols Gould said. A prenatal product and a product for the 55-plus set are in the works, she said.
“We’re not trying to over promise and we are trying to be very transparent with consumers and I think that resonates,” Nichols Gould said.
Growing the right way
The company started with online sales and then delved into the natural channel via distributor. Now the company is in national distribution in CVS pharmacies.
“We stared out online because we wanted communication with customers to see what works and what doesn’t work,” Nichols Gould said. The new capital infusion will help with marketing to support the new distribution and inventory to support the resultant growth.
“We want to accelerate our growth. Part of that is to have enough inventory on hand to handle surges like when we sign someone like CVS. You can get killed by growth just as you can by not selling anything,” Nichols Gould said.
“We don’t want to get as big as we can as fast as we can. We want to do it right,” she said.