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Yes to Carrots, the plucky, paraben-free personal care line, has attracted the karats needed to power its North American expansion.
This story first appeared in the July 29, 2008 issue of WWD. Subscribe Today.
Yes To Inc., the Israeli-based company that markets the brand, plans to announce today it has closed a $14 million funding round led by private equity firm San Francisco Equity Partners. The San Francisco-based private equity firm Simon Equity Partners also participated in the first round. Both firms are co-investors in Method Products, which has sought to decommoditize household cleaners with natural formulas and sleek packaging.
Introduced abroad in 2006, Yes to Carrots launched Stateside in May 2007 in Walgreens. It since has garnered considerable attention from retailers, press and shoppers with its paraben-free, antioxidant and Dead Sea mineral-powered products, coupled with its bright orange packaging and carrot logo. The line recently expanded to Duane Reade and Ulta, and has appeared on the TV shopping network HSN. The brand, which is available in 17 countries, currently is carried in about 8,000 U.S. doors, and plans to expand to a total of 12,000 by year’s end.
Yes To chief executive officer Ido Leffler, whose business card declares him “carrot lover,” has crafted the line’s positioning and spirit.
At WWD’s Beauty CEO Summit in May, Leffler’s orange watchband, laptop cover, binder and business-card holder made him easy to spot for interested retailers. Earlier this month at the National Association of Chain Drug Stores’ annual product trade show, Yes to Carrots invited visitors to sip on carrot juice while browsing the firm’s upcoming items, including Yes to Cucumbers tailored to sensitive skin, and Yes to Tomatoes for combination and oily skin. Leffler playfully acknowledged he recently added “Ferrari red” Pumas to his wardrobe and is scouting out green items as well to support the new lines.
“It was important to us that the happy-go-lucky nature of the brand was never in jeopardy,” said Leffler, referring to the company’s search for a financial partner. The two private equity firms, “want that spirit to continue.”
He added the funding will allow Yes To to build its U.S. sales and marketing, and establish headquarters here, to be located in San Francisco.
Neither of the firms involved would comment on retail sales, but industry sources project the brand could generate $40 million to $50 million by 2009.
Scott Potter, managing partner of San Francisco Equity Partners, said the fund generally invests in later-stage growth companies that are $10 million to $30 million in size with aspirations of growing to $50 million to $100 million. As it has done with Method, the fund aims to bring specialty products to the mass market to encourage consumers to trade up. Referring to the similarities between Method and Yes To, Potter said, “Very rarely in our business do we get to reuse a playbook, but in this case we do.…Yes To is the Method of personal care.”
William Blair & Co. and Poalim Capital Markets represented Yes To on the transaction, while Demeter Group advised the two private equity firms.