Yumi, a startup backed by a long list of prominent Silicon Valley investors that makes high-end organic baby food, is raising a down round that values the company at around $40 million, Business Insider has learned.
The funding represents a substantial discount from Yumi’s Series B round in 2021, which valued the company at more than $300 million, according to Pitchbook data. It also means Yumi has burned through more than twice as much cash, nearly $90 million dollars, as it is currently worth.
Amidst a brutal funding environment for consumer startups, Yumi was forced to raise the down round after running low on cash when a deal to raise venture debt became too onerous, according to internal communications seen by BI.
A Yumi spokeswoman declined to comment.
Yumi generated $13 million in revenue in 2023, according to these documents, though it is projecting revenue to climb to $30 million this year as it begins a new deal with Walmart and continues a 2022 deal with Target. Yumi also launched at Whole Foods, Sprouts and Meijers in the last few months. The company projected $100 million in sales in 2021.
Yumi was cofounded as a subscription delivery service for healthy baby food aimed at affluent millennials in 2017 by Evelyn Rusli, a former New York Times and Wall Street Journal reporter, and Angela Sutherland, a former private equity executive.
“People want more from a food brand — this is not Gerber,” Sutherland told BI in 2017. “Millennials want transparency. That’s one of the reasons why our food is transparent. It’s in a see-through container, so you see what you’re getting.”
Sutherland and Rusli brought on prominent investors including 23andme cofounder and CEO Anne Wojcicki, actress Gabrielle Union, New Enterprise Associates, Uber, SoulCycle, Sweetgreen, and Warby Parker.
Its $67 million Series B round was structured so that it could be led by female investors and women-led firms, including Goldman Sachs executive Christina Minnis, City National Bank CEO Kelly Coffey, Day One Ventures founder Masha Drokova, and Nasdaq executive Lauren Dillard.
Startup fundraising tumbled to a five-year low in 2023 with funding for e-commerce and shopping startups down 60%, according to Crunchbase data. The number of down rounds more than doubled from 2022.
After venture funding dried up in 2021 and the IPO market froze, Silicon Valley has been bracing for what some investors termed an “extinction event” that threatens the survival of hundreds of startups.
Upwards of 3,200 venture-backed U.S. startups went out of business last year, a grim figure expected to rise this year as the funding drought continues and startups run out of cash.
Convoy, the freight startup that was once called the “Uber for trucking” and raised more than $1 billion, shut down in November. Once valued at $4 billion, Olive AI — a healthcare startup that sold revenue cycle automation tools — shut down in November, 11 years after it was founded.
“The factors that led to the slowdown essentially remain in place,” Pitchbook analysts wrote in their recent 2024 outlook.
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