The luxury candy brand for adults, famous for Champagne- and rosé-flavored gummy bears, is looking to raise about $25 million, via StartEngine Crowdfunding Inc., an equity crowdfunding platform based in West Hollywood.
“We’ve been asked why we chose crowdfunding as our vehicle to raise these funds in lieu of partnering with venture capital or private equity, and the answer is simple — the potential and strength of this brand are a convergence of the dreams, delights and demand of Sugarfina’s loyal audience,” Chief Executive Scott LaPorta said in a statement. “Instead of commissioning big money, we’re inviting those who support and sustain the business to join us first.”
The funds will be used to increase online, wholesale and international distribution; launch new products; increase marketing; build inventory to meet demand from expanded distribution; and open a central fulfillment center in Las Vegas, according to the company.
Rosie O’Neill and Josh Resnick co-founded Sugarfina in 2012, selling imported candy neatly packed in small, clear plastic cubes. By 2017, the company had 24 boutiques and 14 shops inside Nordstrom stores and generated about $25 million in revenue.
It also raised $35 million from Boston-based private equity firm Great Hill Partners mainly to finance its international expansion.
Two years later, Sugarfina, with 44 stores in tow, filed for bankruptcy after being “negatively impacted by a challenging retail environment,” according to Resnick and O’Neil.
Bel Air-based Bristol Luxury Group acquired Sugarfina in 2019 for $15.1 million.
The company now has 111 full-time and 67 part-time employees. It operates 25 candy boutiques, with six in Canada and 19 in the United States, including 10 shop-within-a-shops in Nordstrom, as well as two franchise stores in Hong Kong. It buys candy and packaging from various manufacturers, which are then sent to a facility in Tijuana, Mexico, for assembly and shipped to a third-party logistics center in San Diego and its two warehouses for distribution and fulfillment.
For the first half of 2020, Sugarfina posted a net loss of $4.1 million on $9.7 million in revenue, “primarily as a result of the effects of the global Covid-19 pandemic,” according to documents it filed with the Securities and Exchange Commission.
For reprint and licensing requests for this article, CLICK HERE.