The FGB Digest brings you the latest news on the world’s fastest growing direct-to-consumer and challenger brands. In today’s edition: Smalls closes on America’s largest Series A round for a cat food startup; Stix raises USD$1.3m for pregnancy test and educational products; and BigCommerce share prices surge in first day of trading.
Smalls closes on America’s largest Series A round for a cat food startup
Direct-to-consumer cat food company, Smalls, has announced the closing of a USD$9m funding round led by Left Lane Capital. The company has now raised USD$12m in total.
According to the company, this is the largest Series A funding round for a cat food startup in the United States. The company began seeking funding in March, right as the COVID-19 pandemic began, meaning the funding round was conducted entirely online through Zoom.
Smalls plans to use this funding to further develop its product portfolio, placing emphasis on creating innovative formulas for “particular palettes,” as well as developing functional health supplements and cat accessories.
The company, founded in 2017, offers customisable cat diets in a variety of formats, available through its online e-commerce platform and shipped directly to consumers. According to the company, online cat food delivery sales grew 162% from March 2019 to March 2020.
Smalls hopes to bring more attention and innovation to cat food products, reporting approximately 95% of venture capital funding is provided to dog-focused companies even though there are an estimated 5 million more cats living in the United States.
Stix raises USD$1.3m for pregnancy test and educational products
The company’s founders launched the pregnancy and fertility startup that ships tests directly to a customer’s house and offers a subscription service after having their own uncomfortable experiences purchasing pregnancy tests. The startup aims to simplify obtaining and using the tests, and to provide women with education about their physical and mental health. Customers can purchase a one-time test pack, or subscribe for monthly deliveries. The company had been growing by about 180% per quarter.
Having the products directly delivered to peoples’ homes along with a library of educational health content on their website allows for some accessibility, especially in states where women’s healthcare is more restricted or were locked down heavily because of the virus. In early March, for instance, as Washington state became the first area of the U.S. to shut down, sales grew in the Pacific Northwest.
In the next six months, the newly expanded team plans on launching new products and doubling down on its educational content offerings.
BigCommerce share prices surge in first day of trading
BigCommerce, a Shopify rival that offers an e-commerce platform as a service aimed at online businesses, surged as much as 292% in its first day of trading on Wednesday.
The Texas-based company and existing stockholders sold a total of 9 million shares to the public, raising USD$216m for BigCommerce.
The initial public offering was initially priced at a range of USD$18 to USD$20, but strong investor demand led to a range raise between USD$21 and USD$23. It was eventually priced at USD$24 on Tuesday night.
Shares opened for trading at USD$67.84, and rose to USD$79.40 within three minutes before being halted for volatility. The stock then jumped to USD$91.80 before again being halted due to volatility.
Shares eventually peaked at USD$93.99, representing a gain of 292% from the IPO pricing of USD$24. BigCommerce has more than 60,000 customers across 120 countries. High-profile customers of BigCommerce include Ben & Jerry’s, Skullcandy, Sharp, and Sony.
Investors might be looking for the next Shopify, which operates a similar platform to BigCommerce and has seen its shares jump 173% year-to-date as it benefits from increased online shopping amid the COVID-19 pandemic.
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