Ayoba is raising a Crowd SAFE at a $7 million valuation with 15% discount. This price is one of the strongest selling points of Ayoba’s offering. That $7 million valuation represents a very fair revenue multiple of roughly 3.5x (based on 2019 revenues), which is significantly lower than the often inflated multiples common on crowdfunding platforms. The added 15% discount makes Ayoba an even better deal for investors, who could reap strong returns by getting in as the business continues to grow. Therefore, Ayoba’s price rating is very high. 

Ayoba sits most directly in the beef jerky market, which is fairly niche. The market was valued at just $3.9 billion in 2019, and demand isn’t increasing explosively. Grand View Research does note that market growth is tied to millennials’ interest in more natural, high-end jerky products, and Ayoba certainly meets that demand. However, Ayoba’s total addressable market within beef jerky is still pretty small. Its obtainable market in competition with leading, well-known jerky brands is significantly smaller. 

Arguably, Ayoba could also capture a share of the broader snack foods market and perhaps the subset of healthy snack foods. However, in this category Ayoba is facing the challenge that few Americans are aware of biltong. When compared to the entire landscape of snack foods, it’s unlikely that Ayoba can quickly divert dollars away from mainstay products like protein bars for health-conscious consumers — and even less likely that it can compete with candy and chips. 

Altogether, Ayoba is serving a niche market and faces a particular challenge in raising awareness about South African biltong among the crowded snack food shelves of supermarkets and gas stations. As a result, Ayoba’s market rating is its lowest.

Ayoba was co-founded by brothers Wian and Emile van Blommestein, who appear to be native South Africans transplanted to the U.S. When they moved stateside, they discovered that biltong is not a common snack in America and began developing products that resemble, but are much healthier than, beef jerky. 

While the van Blommestein brothers are authentic South African biltong manufacturers, they don’t have very much experience in business and even less in CPG. Wian’s primary professional experience is in accounting for a transportation equipment company. Emile used to work at the same company, with experience in procurement. Ayoba’s third senior team member and VP of Sales, Matt Harris, lends a bit more relevant experience. He’s spent the last eight years in sales for CPG brands, including five years at Health Warrior, which was acquired by PepsiCo. 

Overall, the Ayoba team has limited experience in DTC startups or the CPG space. While the co-founders’ authentic story as longtime lovers of South African biltong is valuable for the brand, there’s ultimately risk that Ayoba is being run by inexperienced operators. Thus, the company’s team score is low. 

Ayoba’s entire brand relies heavily on differentiation from traditional beef jerky. While jerky is heavily processed with sodium, sugar, and nitrates to develop flavor quickly, Ayoba’s biltong and droëwors is air dried for up to 14 days to achieve strong flavor naturally. Ayoba’s products are meaningfully higher in protein and lower in sugar than traditional jerky, perfect for healthy snackers looking for that meaty beef jerky chew without the processed ingredients. Because biltong is still very uncommon in the U.S., Ayoba doesn’t face strong competition within its specific niche. However, the company is in constant competition with traditional beef jerky sellers who are a staple on supermarket shelves. 

Ayoba faces a threat from these mainstream competitors, and that threat is intensified by the company’s lack of defensibility. While biltong is indeed unique, at least in the American market, it’s easily replicable by any large manufacturer. If brands like Jack Links and Oberto recognize growing demand for biltong, they could quickly introduce it themselves and have better luck than Ayoba reaching consumers given their near-universal distribution. 

Overall, while Ayoba does offer products that are obviously distinct from traditional beef jerky, the company faces strong competition from name brands with little product defensibility. As a result, the company’s differentiation rating is middle-of-the-road.

Based on the financial information provided to prospective investors, Ayoba is performing very well. In 2018, the company generated more than $650,000 in revenue and was narrowly profitable with a net income of about $6,000. In 2019, revenues grew significantly to almost $1.2 million, growth of almost 100%. Profitability was sacrificed with this growth though, and Ayoba’s 2019 net loss was more than $190,000. Still, year-over-year growth was impressive in this period, likely due to a strong presence on Amazon and increased distribution at leading stores like Whole Foods, Wegmans, and Erewhon. 

It’s important to note that Ayoba does not provide 2020 financials. Prospective investors reading closely will also notice that Ayoba boasts “$2M+ revenue in the last 24 months.” Given that 2019 revenues were $1.2 million, that statement seems to imply that 2020 revenues were lower than 2019. 

Those suspicions aside, Ayoba demonstrated strong growth between 2018 and 2019. Non-financial metrics like growth in number of stores (700 in 2020) and percentage of revenue from DTC sales (65%) are also positive signals. Consequently, Ayoba’s performance score is very high.

Ayoba’s risk metrics are relatively low, with no significant areas to note. The few factors that cause mild risk — similar to that of other early-stage startups — are team, funding, investment terms, time, and financials. The Ayoba team is pretty inexperienced, and the company hasn’t secured significant outside funding. The Crowd SAFE discount is slightly lower than some similar investment opportunities, and the lack of 2020 financials leaves an open question about how Ayoba performed last year. Overall, though, Ayoba is a relatively de-risked investment compared to other crowdfunding listings.

There are two primary areas that might cause prospective investors to shy away from becoming a shareholder in Ayoba. First, the company’s team is quite inexperienced. The co-founder brothers have held low-level positions at an unrelated company and don’t have any expertise in building any type of startup, much less a CPG brand. Second, we can’t assess 2020 financials, and there are small signals that 2020 growth may have been slower than that of 2019. It would be particularly interesting to discover Ayoba’s net income last year, given that the company was profitable in 2018 but dipped to a nearly $200,000 net loss in 2019. On the whole, though, there are many positive signals that Ayoba has room to continue growing, at least at a moderate pace.

Ayoba is an attractive investment opportunity, particularly when compared to similar crowdfunding listings. Perhaps most importantly, investors can get in on Ayoba at an excellent price. A $7 million valuation when the company generated $1.2 million in revenue in 2019 is a very competitive revenue multiple, and the deal is sweetened by a 15% discount for Crowd SAFE investors. 

Moreover, Ayoba demonstrated almost 100% year-over-year revenue growth in 2019, and there are several other positive indications. Ayoba has won various small accolades — like “Best Meat Snack” from the TODAY Show. It continues to expand its distribution footprint in major nationwide chains, has solid reviews on Amazon, and a good social media presence. 

While biltong is uncommon in the U.S., there are reasons to believe that more and more consumers will be interested in alternative meat snacks. Ayoba’s value proposition as a healthier alternative to beef jerky is a strong one given trends toward healthier snacking. Continued innovation and consumer interest in snack discovery makes it an exciting time to offer new products. Ayoba’s business fundamentals — at least through 2019 — are strong, and the company occupies a promising space with good prospects for future growth. 

Ayoba is a snack foods company, one of the first offering all-natural biltong and droëwors (South African dried meats similar to beef jerky) to the American audience. The company demonstrated significant revenue growth between 2018 and 2019. Investors can get in at a low valuation of just $7 million even though Ayoba has made over $2 million in revenue over the last two years. 

That being said, Ayoba hasn’t shared 2020 financials. There are a few risks around team experience, the size of the beef jerky market, and the uncertainty inherent to an early-stage business that hasn’t achieved consistent profitability. However, Ayoba seems to be a company with a strong consumer audience and good potential for expanded distribution and simultaneous high-margin DTC sales. That’s why it’s been rated a Deal to Watch. 

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com.