When Aura Bora was launched during the tail end of 2019, the husband-and-wife team behind the bootstrapped sparkling water startup, Paul and Maddie Voge, didn’t anticipate the consumer hype as they see today.
It’s a tough business after all given the beverage industry is still dealing much with Covid-induced supply chain constraints, an increasingly competitive yet a tad fatigue seltzer market, and most importantly, investors who are acutely cautious in deploying capital due to a challenging macroeconomic situation.
Three years later however, after selling across thousands of national retailers, including Sprouts, Thrive Market, Whole Foods, alongside a few Albertsons
ACI
Constant Investments In Back-End Supply Chain
XCN2
Aura Bora, made with zero added sugar, appeals to the core seltzer consumer looking for healthy options, while replying little on citric acid as an expedient to carbonate the water; Its herbal extracts-based ingredients give away a more natural aroma, allowing drinkers to easily explore different cocktail recipes; The brand’s quirky, character-driven illustration also makes its packaging indisputably eye-catching. But the company’s largest investor reveals there’s more depth to how it operates.
Husband-and-wife team, Paul (left) and Maddie Voge (right), launched Aura Bora in 2019.
Cofounder and co-managing partner of Siddhi Capital, Melissa Facchina, who has become acquainted with Mr. Voge since Aura Bora’s launch, attributes the company’s meteoric rise to its constant investment into back-end scalable supply chain.
“Aura Bora has changed manufacturing partners a couple of times, not necessarily because the manufacturer couldn’t service them, but because Paul had a much bigger vision, and knew he had to invest in greater volume,” said Facchina. Additionally, the company has also invested heavily in stocking up on inventory, sourcing packaging at affordable price points — “that’s hard when you’re raising capital on a consistent basis, and you need those dollars to pedal your brand forward,” she added.
To put it into perspective, Aura Bora once betted nearly 65% of all the money it raised on buying raw materials and cans, according to Voge, who claimed the company at the time had around 10 times as many empty cans in the warehouse as final products it shipped to retailers. “Looking back now,” Voge said, “we’ve made the right decision” to tackle can shortages.
That’s also helped Aura Bora ultimately earn the trust from a growth equity firm that typically invests in companies generating $15-20 million in annual run rate.
“For years, we’ve prepared Paul that we were likely not the right investing partner because we thought the beverage category has so many challenges from tolling fee to accessibility to packaging,” Facchina explained, “but he never shied away from building what we would consider a very cost efficient, scalable supply chain, and he continued to trust Siddhi on providing services that help build a solid operating infrastructure. That’s how we became very comfortable with Paul as a founder.”
She added: “We strive as a firm to build trust and empathy in our partnerships first and foremost. Obviously, we cannot make investments where we feel like returns are not viable; but for us to have an impact in a business, the company needs to leverage the value we bring” — that includes everything from offering pricing and channel strategies to providing marketing opportunities throughout the lifecycle of Siddhi Capital’s portfolio.
“We show up with talent, and that talent changes as the life cycle of a business changes,” said Facchina. “As Aura Bora continues to grow, what it’s going need from Siddhi as a partner will be more than just capital.”
Creating A Better Food System
Siddhi Capital closed fund I at $68.65 million in 2020 (PitchBook data), and has since evolved during fund II from investing in early-stage CPG to mostly growth-stage companies. That enables the firm to make safer investments since these businesses are more maturely developed, according to Facchina.
“Capital markets have changed dramatically, and this is a result of the macroeconomic environment,” she said. “Young brands are going to have challenges getting funded, and we cannot be the only funder at the table. It’s not realistic, so we had to move upstream where the growth rates, and the consumer traction are more proven than early brands.”
Siddhi Capital’s goal is to create a better food system, Facchina added, “whether that means supporting products that have mass market appeal and are just slightly better than legacy brands in the center aisle, investing in infrastructure for a decade or two down the road, or crafting brand new food types, such as fermentation and cellular agriculture.”