In February, parents were shocked when a report from the U.S. House Committee on Supervision and Reform showed that some commercial baby foods were found to contain “dangerous levels” of toxic metals.
This caused a barrage of information in the media about the effects and what parents can do to avoid it, which included controlling ingredients. The growing awareness of nutrition also benefited food companies that focused on offering more nourishing options for babies and older children.
Amara is the latest startup in this field to raise funding, announcing today that it has raised $ 12 million in Series A funding to expand its nutritional food product line created for children up to seven years of age. The investment comes 18 months after a $ 2 million seed round and growth that caused the company to go from 100 to 1,000 stores.
The latest round of funding was led by plant-based food company Eat Well Group in a majority partnership with the current management in place, which values the company at $ 100 million, founder and CEO Jessica Sturzenegger told TechCrunch. Existing investors from the seed round also participated, including Pharmapacks.
Sturzenegger and her team launched Amara’s first products in Whole Foods in 2017 after three years of working with the technology. The company developed proprietary technology that locks taste, texture and nutrients into a shelf-stable bag of fresh baby food. It has 10 SKUs and a baby food line designed to be mixed with breast milk, breast milk substitute or water.
Packaged foods found on grocery store shelves today are often fruit-based and high in sugar, and come in at a price of $ 3 to $ 7 per serving. meal, and which must also be stored cold or frozen, she added. In contrast, Amara’s meals start as low as $ 1.80 per serving.
This year, Amara expanded it to produce its Yogurt Smoothie Melts, which Sturzenegger highlights as “the only melt-in-your-mouth snack for babies and toddlers without added sugar.”
“Studies show that the food you eat from zero to seven years old affects how you think, feel and perform later in life,” Sturzenegger told TechCrunch. “‘You are what you eat’ can be a cliché, but studies show that it’s true too, and parents are mindful.”
Before receiving Series A dollars, Amara was already profitable on every order; in fact, it grew three times year over year organically and through word of mouth, but after the baby food report came out in February, Sturzenegger said the company received increased attention from both parents and venture capital firms.
“Amara has proven an impressive ability to scale through retail distribution and e-commerce excellence, and the funding and industry expertise from the Eat Well Group will help accelerate Amara’s growth as we enter 2022,” said Marc Aneed, President of Eat Well Group, in a written statement.
The funding will enable Amara to grow rapidly to meet demand as it invests in hiring, product development and brand awareness. In addition to grocery stores, the company sells through its website, Amazon, and grocery stores mostly in California, but in Sprouts nationwide. Over the next 12 months, Sturzenegger plans to get Amara’s products into more grocery stores.
Meanwhile, the shift to nutrition leaves room for many startups to disrupt the baby and baby food market. As such, the global baby food market was valued at $ 67.3 billion in 2019 and is expected to grow to $ 96.3 billion in 2027, with $ 6.3 billion of this revenue coming from the US market at present.
Venture capital firms have noticed this and are pumping fresh capital into food companies focusing on infants and children, like Little Spoon, which raised $ 44 million in Series B funding in July, while Serenity Kids, which offers low-sugar baby food, received 7 million in Series A support in June.
“There’s room in the market, and for everyone to target different parents and price levels,” Sturzenegger said. “Our niche is good food for everyone. If we are to change the way the next generation eats, it must be accessible. “