Bobbie, a startup bringing European-style organic infant formula to the U.S. market, raised $50 million in its latest fundraising round. The financing includes $40 million in venture capital and $10 million in inventory debt.
As one of the few direct-to-consumer organic infant formula companies in the United States, Bobbie has seen skyrocketing demand. Because the infant formula market is going through a shortage, there is space for Bobbie.
Bobbie’s valuation has tripled within the past 10 months. “It was pretty extraordinary. We had been heads-down on growth and innovation, and what is clear is we have hit product-market fit,” stated Laura Modi, the CEO of Bobbie. “This is the product parents have been waiting for.”
Founded in 2018 by two ex-Airbnb employees, Laura Modi and Sarah Hardy, the idea for the startup stemmed from their personal experiences as working parents.
The company’s mission statement revolves around supporting modern parents and their lifestyle needs. The company’s website says, “Parenthood is evolving and we believe it’s about time companies caught up. We are building a new type of workplace that supports today’s parents, a world where flexibility & compassion co-exist with efficiency and ambition.”
Bobbie will allocate its latest funding toward organic infant formula product development and solidifying its relationship with its manufacturing partner, Perrigo. It will also use the funds to support research and development. This includes their virtual laboratory, called Bobbie Labs, which engages in infant feeding research and innovation.
Bobbie’s infant formula recently gained approval from the U.S. Food and Drug Administration (FDA). They overcame a setback in their first year of operation when the FDA found product labeling errors in their products. In response, Bobbie voluntarily recalled their infant formula for a short period of time. It was a humbling learning lesson for the founders. The startup has since put that setback behind it and gained FDA approval.
The recent $50 million funding came from a group of investors that included Park West, VMG, and NextView. Over 100 new investors who are part of AirAngels, Airbnb’s alumni investment network, also participated in the financing round.
Soaring Demand for Organic Infant Formula
Demand for high-quality organic infant formula has far outpaced the expectations of Bobbie’s founders. Revenue for 2021 was $18 million, greatly exceeding their estimates of $4 million.
Many U.S. parents have sought out European-style infant formula on the black market since European-style organic infant formula is considered higher quality. Bobbie is pursuing these customers.
Startups in the Healthy Infant Formula Space
By 2026, the market for infant formula is estimated to be at $103 billion. Despite the market size, innovation has been slow around advancing nutrition for feeding babies.
Bobbie is not alone in the organic infant formula space. Other startups that have gained ground in the space include ByHeart, Biomilq, and Helaina.
Siblings Ron Belldegrun and Mia Funt founded ByHeart in 2016. They underwent a large clinical trial to build a highly nutritious recipe for breast milk formula. The recipe consists of an 80:20 whey to casein ratio that mirrors early breast milk. Their product has received FDA approval.
“To truly innovate to our standards, we couldn’t rely on existing clinical research as the industry has—for the most part—for decades: owning our manufacturing and R&D, having direct relationships with every single supplier, and finally conducting our own clinical trial has allowed us to innovate, to control every ingredient in the formula, and to get closer to breast milk in ways that will be new to the market, all for the benefit of the baby’s foundational health and wellness,” stated co-founder Ron Belldegrun.
Cell-Cultured Human Milk
Biomilq has touted its product as the “world’s first cell-cultured human milk outside of the breast.” The woman-owned biotech startup arose out of co-founder Leila Strickland’s experience completing her postdoc at Stanford University as a young mother. Her struggles to produce enough breastmilk led her on a journey to understand milk biosynthesis.
Using a precision fermentation process to program yeast cells to develop human-identical proteins, the startup Helania is working to produce an infant formula product that is equivalent to human milk. Helaina recently raised a $20 million Series A financing round from a group of investors that included Spark Capital and Siam Capital.
“Helaina is the first company to bring human proteins to food. No one else has done this before,” stated Laura Katz, the founder of Helaina and a food scientist by training. “As we expand technology to parents to feed growing children, we are creating this new category that is like consumer immunology.”