Infant formula maker Bobbie raises $70M, acquires production plant

Bobbie, an infant formula producer, raised a $70 million Series C round led by PowerPlant Partners, increasing the total raised to $142 million.

Why it matters: The new funding, plus additional debt financing provided by JPMorgan, will back the purchase of pediatric nutrition company Nature's One.

• That acquisition includes an infant formula manufacturing facility in Ohio, CEO Laura Modi tells Axios.

How it works: Founded in 2018, Bobbie is a San Francisco-based maker of organic European-style infant formula, made up entirely of lactose with no corn syrup or maltodextrin.

• Because infant formula is heavily regulated by the FDA, it took the brand three years to bring its first product to market.

Details: PowerPlant Partners contributed $35 million of the $70 million in what was an up round for Bobbie, which is profitable, Modi says.

• Existing investors, including Ingeborg Investments, also participated in the fundraise.
• The fundraising effort began about six months ago tied to the deal for Nature's One, both of which were being negotiated simultaneously.
• Nature's One founder Jay Highman and Juggernaut Capital will become key shareholders in Bobbie.
• Perella Weinberg Partners served as Bobbie's financial adviser,

By the numbers: Bobbie generated $18 million in sales solely via a DTC model in 2021.

• Last year Modi told Axios that revenue was expected to grow five times, which would equate to about $90 million.
• Annual revenue actually hit the $84 million mark in 2022.
• The addition of Nature's One and the production plant increases Bobbie's capacity to service 15% of the non-WIC infant formula market, or triple its current capacity.

Be smart: "I’m not blind to the fact that every next $100 million jump (in revenue) is a big leap," Modi says.

• "I don’t want anyone to assume we got this in the bag," she says, adding it will take a lot of work and execution, but the team is confident it can do it.

Catch up fast: Last year Bobbie raised a $50 million Series B growth round at a valuation of more than $100 million.

State of play: The infant formula market is reported to be a $4 billion industry, but an infant formula shortage has plagued the U.S. for the last year.

• In May, the Federal Trade Commission launched an investigation into the shortages.
• The bare shelves have been driving the sales of startups such as Bobbie and ByHeart, as legacy players struggled to meet demand following a product recall by Abbott Nutrition due to a Cronobacter infection.
• Earlier this year, ByHeart acquired a manufacturing facility in Allerton, Iowa, after buying a packaging and blending facility in Portland, Oregon, which are in addition to its plant in Reading, Pennsylvania.

What's next: Asked when Bobbie could consider an exit, Modi says: "We had owning our own manufacturing facility slated for 10-15 years down the road and here we are today, less than three years in. All that to say, nothing is off limits," she says.

Editor's note: This story has been corrected to note that Perella Weinberg Partners served as Bobbie's financial adviser, not JPMorgan