Organic tea producer Bhakti Chai recently raised over $850,000 in capital from angel investors and through the online platform CircleUp.
Capitalizing on a shift in consumer preferences toward healthy alternatives, Bhakti has successfully differentiated itself within the $6.7 billion tea and ready-to-drink tea market through unique ingredients and a proprietary manufacturing process. The Boulder-based company uses blends of fresh-pressed organic ginger, fresh-milled natural spices, and Fair Trade organic certified black tea at its carefully managed micro-brewery.
After experiencing topline growth of 97% from 2011 to 2012, the business concept had been validated and the transformation from a local, niche player to a nationally recognized brand was complete. With Bhakti’s added scale came the need for additional investments in manufacturing, new product development, and additional key team members.
CircleUp provided a platform for Bhakti Chai to raise the funds necessary to make these critical investments. For CircleUp, the business was a great fit. “We were impressed by the authenticity of the Bhakti Chai brand and the company’s consistently strong growth and momentum," said Katie Fitzgerald, Senior Associate of Business Development at CircleUp. "The product is highly differentiated from other chai beverages on the shelf and leverages several key long-term trends we are seeing in the sector including fresh, organic, gluten-free, and non-GMO, among others.”
3 things that attracted investors
The CircleUp investment community was highly receptive to the opportunity that Bhakti Chai presented for a number of reasons.
- The business had a multi-channel sales presence and reached consumers through retail, foodservice, and direct-to-customer avenues. The fact that Bhakti had strong traction in the natural grocery channel with national accounts like Whole Foods Market and specialty customers like New Leaf Community Markets demonstrated a clear retail channel strategy that focused on growth while preserving the integrity of the brand.
- Bhakti’s product was a clear category leader with a terrific taste profile evidenced by industry awards from The North American Tea Championship, Natural Products Expo, and the National Association of Specialty Foods.
- Investors on the platform shared Bhakti’s demonstrated commitment to social responsibility, which was verified by the company’s certification as a B Corp.
Many great small consumer brands similar to Bhakti Chai lack access to the capital they need to reach the next level of scale. In addition to providing a platform for these businesses to access growth capital efficiently, CircleUp provides connections to investors who have common values and experiences. Guidance and advice from these experienced consumer investors can often be just as valuable to a company as the funds that they provide.