Organic skin-care brand Goddess Garden has raised a Series A round with plans to take up more shelf space.
The round came from Renewal Funds, the Vancouver, British Columbia-based fund that backed household products and personal care business Seventh Generation, which Unilever recently bought for $700 million. Terms of the round were not disclosed, but Nova Covington, chief executive officer and founder of Goddess Garden, confirmed Renewal will take a minority stake in the business and that Renewal vice president Kate Storey will take a board seat.
“We were really specific in the partner we chose at this particular time in our growth trajectory because they really support our larger position…creating a positive impact for people and the planet with the products that we launch,” Covington said. Renewal’s Seventh Generation experience also hit home for Covington — “that went pretty well,” she noted. Renewal has also invested in personal care brand Sensible Organics as well as organic snack brand Prana.
“We see Goddess Garden as a brand that can transcend the natural channel,” said Storey. “There are a lot of people who buy at Whole Foods where a brand like Goddess Garden would be a natural fit, but this brand specifically is one that we think would be something families that shop at all different types of retail stores would be interested in. People who shop at drugstores like CVS to families who shop at Walmart.” Resonating outside of the natural channel is something Renewal is betting that Goddess Garden can do because of the brand’s trust levels surrounding efficacy, Storey added.
Renewal’s investment should help Goddess Garden, best known for its natural sunscreen products ($3.99-$21.99) as it plans to increase its store presence significantly for 2017 – going from roughly 10,000 doors to 17,000 with its organic sunscreen, according to Covington, who projected the business would grow at about 70 percent because of the additional distribution. Part of Goddess Garden’s plan is to take over more shelf space, she added. “Our plan is to make investments in people and infrastructure to support our distribution expansion,” Covington said.
“Why we did the Series A was to set us up for growth…we did talk to a lot of people…many traditional private equity groups, and many of them frankly wanted to do a larger minority stake and that was one thing we weren’t really ready for. To us, it was all about the partner we chose, and at the end of the day that’s why we went with Renewal Funds.”
The capital will also help Goddess Garden expand its newly launched skin-care line, called the Sun Repair System, which includes products like Face the Day Primer with SPF 30, $17.99, and Erase the Day Mineral Removing Cleanser, $16.99. Now in about 500 doors, the seven-product lineup is expected to hit more shelves next year. Goddess Garden sells its products on its web site, on Amazon, in Whole Foods and in other natural grocery chains. The 2017 expansion will add more CVS and Walgreens doors into the mix, as well as take the Sun Repair System to Whole Foods Canada and into the grocer’s Rocky Mountain region, according to Covington.
New products and categories are also in the works, she hinted. “We are going to go into new categories and expand our brand in adjacent areas but we’re not quite ready to talk about that yet,” Covington said. She’s also heading up a nonprofit called Protect Our Mother that focuses on the health of coral reefs, a cause Goddess Garden has a history of focusing on through its Goddess Garden Foundation.
Goddess Garden’s investment comes roughly a week after beauty startup Glossier announced a $24 million Series B round, led by IVP with support from Index Ventures.
Financial sources have suggested that the VC markets have become more willing to invest recently because of the sizable exits that some VC-backed businesses have provided, namely, Dollar Shave Club, which was sold to Unilever for a reported $1 billion. Over the past year, investors have been skittish after flops from some previous consumer-goods darlings, including Gilt, sold for $250 million after a $1 billion valuation, and Fab.com, sold for a mere $15 million after a one-time $1 billion valuation. Aside from Dollar Shave, mergers and acquisitions activity in the beauty space has been on fire, with valuations like IT Cosmetics’s $1.2 billion sale to L’Oréal (a 6.1 times multiple) and Too Faced’s sale to Estée Lauder (a 5.5 times multiple).