Infant formula company Bobbie takes in $70M to acquire Nature’s One

Bobbie, an organic infant formula company, has acquired Nature’s One, a 26-year-old pediatric nutrition company, in a move that gives Bobbie end-to-end control over formula manufacturing through a new facility and triples the size of Bobbie’s operations.

Laura Modi, co-founder and CEO of Bobbie, declined to disclose the financial terms of the deal, but did say the acquisition makes good on Bobbie’s $100 million White House commitment, made in September, that it would invest to domestically increase access to the infant formula supply chain and industry. This comes one year after a nationwide infant formula shortage.

“Last year’s infant formula shortage underscored the fact that we really had zero time to waste to invest in domestic manufacturing, with ‘domestic’ being the operative word,” Modi told TechCrunch. “The shortage woke us up to a lack of redundancy and resiliency that this essential good deserves to have. The shortage is somewhat over, but the crisis still remains because frankly, the industry has done little to nothing to improve the actual source of where and how this all started.”

In addition, the company closed on a $70 million Series C round of funding to acquire Nature’s One. Modi did not disclose the valuation, but said it was an increase over its previous round. The new investment was led by a $35 million infusion from PowerPlant Partners, with participation from several of Bobbie’s existing investors. This now gives Bobbie venture-backed funding totaling $142 million raised to date.

Bobbie drinks up $50M to expand infant formula product line

Bobbie was founded by Modi and Sarah Hardy in 2019 to provide a European style of infant formula. The company previously raised $50 million in early 2022 and has since grown to serve over 5% of the non-WIC market and fed over 300,000 babies since launching its products two years ago.

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Over the past year, the company has grown significantly. Bobbie grew overall 394% year over year, reaching $100 million in revenue and over 100 employees. Modi said the year-over-year growth is 6x faster than the rest of the infant formula market. In addition, Bobbie’s formula launched at Target during the formula shortage, becoming “the first and only U.S.-manufactured infant formula to get on national retailer shelves” during that time, according to the company.

When asked why Nature’s One was a good acquisition target, she explained that the acquisition provides some diversification within a U.S. infant formula market, poised to reach $6.8 billion by 2030, that is traditionally being served by “this duopoly that existed for decades.”

It also gives Bobbie exposure to what she described as Nature’s One’s “cult-like following” around its brand and use of a state-of-the art manufacturing facility that “would be the blueprint of exactly what I would build [if I were to build my own],” Modi said.

“This company has very similar DNA to Bobbie: the same product philosophy that is clean, simple, organic products,” Modi added. “After spending decades making toddler formula, they shifted to start making infant formula, and one of the things that they realized was that they woke up to a very, very different industry. The infant formula industry has disrupted faster than anyone’s ability to catch up in the last year, and I think, for them, it was a realization that we are stronger together than going at this alone.”

With the Nature’s One acquisition, Bobbie becomes the third-largest fully integrated brand in the U.S. and will grow to a 15% non-WIC market share. In addition, Nature’s One’s new manufacturing facility will enable the company to increase its output to 3x its volumes, Modi said.

Bobbie will continue to manufacture Nature’s One products under the Baby’s Only brand and will work in the next year to manufacture its own products in the facility. The company is also continuing its manufacturing relationship with Perrigo Co. with a plan to double down on the partnership, Modi said.

Nature’s One, founded in 1997 by Jay Highman, was traditionally a toddler formula maker. However, in October 2022, the company received U.S. Food and Drug Administration approval for a line of organic infant formula. Highman and Nature’s One employees will continue with the company, Modi said. Highman will take on the role of executive director of Nature’s One and will be a shareholder in the combined entity along with Nature’s One investor, Juggernaut Capital Partners.

“This is the kind of playbook that every manufacturing operation, serving vulnerable populations with an essential good, should be doing,” Modi said.This is a smart business move, and it’s exactly what will help the U.S. avoid a [formula] crisis again.”

The future of milk is … milk?