Axios Pro Exclusive Content

Infant formula maker ByHeart raises $95 million

May 13, 2024
Illustration of a battery icon, but the outline is shaped like a bottle of milk.

Illustration: Maura Losch/Axios

ByHeart, a New York City infant nutrition startup, raised a $95 million round, CEO Ron Belldegrun tells Axios.

Why it matters: The company is part of a group of new entrants shaking up an industry historically controlled by less than a handful of manufacturers.

Zoom in: The financing increases the total amount raised to $395 million, Belldegrun says.

  • Investors include D1 Capital Partners, Bellco Capital, Polaris Partners, Two River, OCV Partners, AF Ventures, Red Sea Ventures and Gaingels, among others.
  • Proceeds will be invested in U.S. sales growth and in research and development.

Catch up quick: ByHeart was founded in 2016 by Belldegrun and his sister, Mia Funt, to modernize the infant formula category.

  • The two formulated a product made of whole milk instead of skim, while eliminating corn syrup, and including the two most common proteins found in breast milk, Belldegrun explains.
  • After ByHeart couldn't find a contract manufacturer willing to make its formula, it secured its own production facility, running clinical trials to get approval from the FDA.

The latest: ByHeart added two manufacturing facilities, one in Portland, Oregon, and another in Allerton, Iowa.

  • In March, Polaris managing director Amy Schulman was named chair of the board.
  • The company most recently launched in Thrive Market and is available for sale via Babylist and Target.
  • It plans to add several more retailers by the end of this year.

By the numbers: Belldegrun declined to comment on revenue but says formula is a $6 billion category in the U.S. and $60 billion globally.

State of play: A formula shortage in 2022 highlighted the danger of leaving production concentrated in too few hands.

  • Two companies, Abbott Nutrition's Similac and Mead Johnson's Enfamil, account for 80% of the baby formula sold in the U.S. as of 2022, per the New York Times.
  • Perrigo and Nestlé's Gerber, which have been hit with a lawsuit, are behind many of the category's private-label brands.
Go deeper