Pacha

Pacha

Growth Stage

A rapidly growing organic CPG brand fueled by a super-seed: sprouted buckwheat

A rapidly growing organic CPG brand fueled by a super-seed: sprouted buckwheat

Overview

Raised to Date: Raised: $294,073

Total Commitments ($USD)

Platform

Wefunder

Start Date

04/23/2024

Close Date

08/22/2024

Min. Goal
$50,000
Max. Goal
$618,000
Min. Investment

$200

Security Type

Equity - Preferred

Series

Seed

SEC Filing Type

RegCF    Open SEC Filing

Price Per Share

$11.00

Early Bird Valuation

$10,180,530

Pre-Money Valuation

$11,198,583

Rolling Commitments ($USD)

Status

Active

Reporting Date

05/22/2024

Days Remaining

91

% of Min. Goal

588%

% of Max. Goal

48%

Likelihood of Max
extremely
Avg. Daily Raise

$10,140

Momentum
warm.svg
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Year Founded

2020

Industry

Food, Beverage, & Restaurants

Tech Sector

Non-Tech

Distribution Model

B2C

Margin

Low

Capital Intensity

Low

Location

VISTA, California

Business Type

Growth

Pacha, with a valuation of $11.2 million, is raising funds on Wefunder. The company makes organic and gluten-free bread using healthy and delicious ingredients. Pacha’s sprouted buckwheat bread does not contain any harmful additives and is made using naturally occurring wild yeast as the main ingredient. The business has reported a $3 million run rate, with a 600% year-over-year sales growth and over 70% quarter-over-quarter growth in online revenue in 2023. Adam Hiner founded Pacha in June 2020. The current crowdfunding campaign has a minimum target of $50,000 and a maximum target of $618,000. The campaign proceeds will be used for marketing and innovation.

Summary Profit and Loss Statement

FY 2023 FY 2022

Revenue

$2,085,137

$352,647

COGS

$2,135,146

$676,481

Tax

$0

$0

 

 

Net Income

$-1,116,285

$-820,637

Summary Balance Sheet

FY 2023 FY 2022

Cash

$131,389

$113,339

Accounts Receivable

$102,254

$11,880

Total Assets

$2,383,735

$1,453,669

Short-Term Debt

$840,696

$361,021

Long-Term Debt

$1,245,582

$1,006,307

Total Liabilities

$2,086,278

$1,367,328

Financials as of: 04/23/2024
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Raise History

Offering Name Close Date Platform Valuation/Cap Total Raised Security Type Status Reg Type
Pacha 08/21/2024 Wefunder $11,198,583 $294,073 Equity - Preferred Active RegCF
Pacha 06/29/2023 Wefunder $3,841,950 $1,535,348 Equity - Preferred Funded RegCF / RegD 506(c)
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Price per Share History

Note: Share prices shown in earlier rounds may not be indicative of any stock splits.

Valuation History

Revenue History

Note: Revenue data points reflect the latest of either the most recent fiscal year's financials, or updated revenues directly from the founder, at each raise's close date.

Employee History

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Analyst Report

Synopsis

Pacha is carving out a unique niche in the US bread market by focusing on health-conscious consumers with its organic and gluten-free bread offerings. Emphasizing the power of sprouted buckwheat, Pacha's products stand out for their commitment to health, taste, and sustainability. The company's sprouted buckwheat bread is not only gluten-free and organic but also vegan and free of the top 9 food allergens, catering to a wide range of dietary needs and preferences. This approach is rooted in Pacha's mission to nourish people and the planet, highlighting an unwavering dedication to sustainability beyond mere greenwashing.

Founded in June 2020 by Adam Hiner, Pacha has demonstrated remarkable growth in a relatively short period. The company boasts a $3 million run rate and has achieved a 600% year-over-year sales growth, coupled with over 70% quarter-over-quarter growth in online revenue in 2023. Such impressive figures underscore Pacha's rapidly increasing popularity and the market's effective demand for healthier bread alternatives.

Pacha's business model is primarily transactional, with a recurring revenue component that suggests a loyal customer base and consistent sales. The company operates on a B2C distribution model, directly reaching consumers who value their food choices' health benefits and sustainability. Currently in a growth phase and conducting a crowdfunding campaign on Wefunder, Pacha seeks to raise funds to fuel further marketing efforts and innovation. With a valuation of $11.2 million and having raised $1,985,820 in prior funding rounds, Pacha is poised for continued expansion and success in the health-focused food sector.

Next Section: Price

Price

Pacha is currently positioned in an exciting phase of growth within the food, beverage, and restaurant industry. It specifically targets the US bread market with its organic and gluten-free offerings. The company's valuation of $11.2 million on Wefunder, against a backdrop of impressive revenue growth—from more than $300,000 in 2022 to $2 million in revenues in 2023 and now a $3.6 million run rate—reflects a robust growth trajectory. 

The company's revenue multiple of 5.37x, based on 2023 revenues, is justified by its rapid sales growth, innovative product offering, and successful expansion beyond California. Pacha's strategic direct purchasing from organic and regenerative farming farmers aligns with growing consumer preferences for sustainable and health-conscious food options, potentially enhancing its market appeal and long-term growth prospects.

Next Section: Market

Market

The US bread market, valued at approximately $25.93 billion, is experiencing a modest growth rate of 2.65% annually. Within this broadly defined market, Pacha is carving a niche by focusing on the organic and gluten-free segment, emphasizing health and wellness trends increasingly influencing consumer choices. This strategic focus is particularly relevant given the primary industry driver: a significant shift in consumer demand towards healthier and nutritional food products. This shift is mainly due to rising health concerns globally and a growing awareness of the link between diet and chronic diseases such as heart disease, diabetes, obesity, and metabolic syndrome.

Pacha's offering of sprouted buckwheat bread, which is gluten-free, organic, vegan, and free of the top 9 food allergens, positions the company to capitalize on these shifting consumer preferences. The company reports a $3 million run rate, with a 600% year-over-year sales growth and over 70% quarter-over-quarter growth in online revenue in 2023, indicating strong market acceptance and a solid growth trajectory within its niche.

Despite the promising growth and high market acceptance, Pacha operates in a highly competitive landscape with established competitors such as Base Culture, Oroweat, and Canyon Bakehouse. These brands represent significant competition but highlight the demand and potential for growth in the organic and gluten-free bread sector. Pacha's focus on healthy, delicious ingredients without harmful additives and its commitment to sustainability meet the increasing demand for health-oriented products and appeal to a growing segment of environmentally conscious consumers.

However, the highly competitive nature of the market demands continuous innovation and marketing efforts to maintain and grow market share. Pacha's current crowdfunding campaign, aimed at raising funds for marketing and innovation, reflects an understanding of this necessity. The company's dedication to product quality and strategic funding use could strengthen its market position and enable it to navigate the competitive landscape successfully.

Next Section: Team

Team

At the helm of Pacha, CEO Adam Hiner brings a wealth of experience from the food and beverage industry. He has founded four companies, including Boochcraft, the first hard kombucha brand that has emerged as a market leader. His entrepreneurial journey and success in establishing and growing Boochcraft underscore his ability to innovate and scale businesses within the competitive food and beverage space. Hiner's leadership is instrumental in navigating Pacha through its growth phase, leveraging his insights to position Pacha’s organic and gluten-free bread in a burgeoning market.

Director of Marketing Madeleine Hamann has demonstrated exceptional prowess in driving Pacha's direct-to-consumer (D2C) sales from ground zero to over $120K monthly in less than a year. Her background as a PhD Oceanographer turned marketer is a testament to her adaptability and commitment to contributing towards a sustainable economy through innovative marketing strategies. Hamann’s ability to achieve a conversion rate of over 6% on the website indicates her deep understanding of digital marketing and ability to communicate Pacha's value proposition to its target audience effectively.

Mateo Sluder, the Sales Director, brings over a decade of experience in the natural Consumer Packaged Goods (CPG) industry. His notable achievement of scaling Guayaki Yerba Mate from $24M to $72M and expanding the team from 40 to 300 employees in 4.5 years reflects his sales and business development expertise. At Pacha, Sluder is focused on disrupting the gluten-free market with sprouted buckwheat as a staple, leveraging his industry knowledge and networks to foster growth and market penetration.

Next Section: Differentiation

Differentiation

Pacha distinguishes itself in the highly competitive US bread market through its commitment to health, sustainability, and quality. The company's organic and gluten-free sprouted buckwheat bread appeals to many consumers, including those with dietary restrictions such as gluten intolerance, vegans, and individuals avoiding the top 9 food allergens. This inclusivity, combined with a focus on using healthy and delicious ingredients without harmful additives, sets Pacha apart from traditional bread manufacturers and other health-focused brands like Base Culture, Oroweat, and Canyon Bakehouse.

One of Pacha's key differentiators is its direct procurement of raw ingredients from organic and regenerative farming farmers. This ensures the highest quality of ingredients and aligns with the company's mission to nourish both people and the planet. This commitment to sustainability and support for regenerative agriculture practices resonates with an increasingly environmentally conscious consumer base, providing Pacha with a unique selling proposition in a crowded marketplace.

Furthermore, Pacha's impressive revenue growth, with more than $2 million in revenues in 2022 and a current $3.6 million run rate, underscores the market's positive response to its products. The brand's expansion beyond California, with its breads now sold through distributors across the country and featured in Whole Foods, demonstrates its growing national presence and consumer demand. This growth is further evidenced by a 600% year-over-year sales growth and over 70% quarter-over-quarter growth in online revenue in 2023, highlighting the effectiveness of its business model and the scalability of its operations.

While Pacha operates in a highly competitive market with low barriers to entry, its focus on quality, sustainability, and inclusivity, combined with its strategic growth and distribution achievements, positions the company as a distinctive player in the US bread industry. These attributes and its strong commitment to not-just-greenwashed sustainability make Pacha a compelling choice for consumers seeking nutritious and environmentally responsible food options.

Next Section: Performance

Performance

Pacha has demonstrated remarkable performance in the highly competitive food and beverage industry, particularly within the niche market of organic and gluten-free bread. The company reported an impressive revenue of over $2 million in 2022, with a current run rate of $3.6 million. This growth trajectory is further highlighted by a staggering 600% year-over-year sales growth from 2022 to now and a remarkable 70% quarter-over-quarter growth in online revenue in 2023. Such metrics not only underscore Pacha's rapid market penetration but also its ability to scale effectively.

The expansion of Pacha's distribution network is a key factor in its performance. Initially focused on California, the company's products are now available across the country, including prestigious retail partners like Whole Foods and MOM's Organic Market and through the UNIFI Warehouse. This nationwide distribution has undoubtedly contributed to Pacha's revenue growth and brand recognition.

Pacha's commitment to sustainability and health is evident in its direct procurement of raw ingredients from organic and regenerative farming farmers. This ensures the quality and healthiness of their products and appeals to the growing consumer demand for sustainable and ethical food options. The company's sprouted buckwheat bread, free from harmful additives and the top 9 food allergens, is a testament to its commitment to producing nutritious food while nurturing the health of both people and the planet.

Financially, Pacha has secured $1.99 million from prior funding rounds, likely supporting its operational and growth initiatives. With a monthly burn rate of $149,000 and cash on hand of approximately $169,950, it's clear that Pacha is investing aggressively in its growth. Given the company's rapid revenue growth and market expansion, this investment strategy seems to be paying off.

Pacha's performance is impressive, particularly for a company in its growth stage. Its successful expansion into national distribution channels, significant revenue growth, and commitment to sustainability position Pacha as a strong contender in the organic and gluten-free bread market. As the company continues to navigate the challenges of scaling in a competitive market, its innovative product development and marketing approach will be crucial to sustaining its growth momentum.

Next Section: Risk

Risk

Investing in Pacha presents several unique risks that potential investors should consider. First, the company operates in the highly competitive food, beverage, and restaurant industry, specifically within the niche market of organic and gluten-free bread. Competing with established brands like Base Culture, Oroweat, and Canyon Bakehouse could pose substantial challenges in market share and customer loyalty. The extremely competitive landscape may pressure pricing, margins, and profitability.

Another significant risk is related to production and quality control. Maintaining consistent quality and supply chain integrity is crucial as a company focused on producing organic and gluten-free bread. Any disruption or compromise in the quality of ingredients or production processes could negatively impact the brand's reputation and customer trust.

While Pacha has shown impressive sales growth, the company is still in a pre-profit stage, with a net income of -$1,116,285 in the most recent fiscal year. This highlights the ongoing financial risk as the company invests in growth and expansion. The high burn rate ($93,023.75 monthly) compared to the cash on hand raises concerns about the sustainability of its growth without securing additional financing.

The food and beverage industry is also subject to high market approval and license regulations. Compliance with food safety standards and organic certification processes can be costly and time-consuming. Any failure to comply with these regulations could result in financial penalties, product recalls, or damage to the company's reputation.

Last, Pacha's decision to raise funds in a down round could dilute existing shareholders and reflect underlying valuation or growth expectations challenges. This scenario may affect investor confidence and should be considered when evaluating the investment opportunity.

Next Section: Bullish Outlook

Bullish Outlook

Pacha's remarkable journey in the competitive US Bread market showcases a promising trajectory, driven by its unique organic and gluten-free sprouted buckwheat bread. The company's impressive 600% year-over-year sales growth from 2022 to now, coupled with a more than 70% quarter-over-quarter increase in online revenue for 2023, demonstrates the product's market acceptance and Pacha's adeptness at scaling its operations and marketing effectively. This growth is particularly commendable given the challenging and highly competitive landscape of the Food, Beverage, & Restaurants industry.

The company's focus on health, inclusivity, and environmental sustainability aligns well with current consumer trends toward organic and allergen-free diets. Pacha's commitment to using natural, healthy ingredients without harmful additives taps into the growing consumer demand for clean eating, while its dedication to sustainability addresses the increasing consumer preference for environmentally responsible brands.

Despite the low barriers to entry in the bread market, Pacha's extraordinary revenue growth rate of 491.28% between 2022 and 2023 and a reported $2 million in revenues in 2023 showcase its strong market differentiation and potential to capture a significant market share. The company's products cater to a wide range of dietary needs, including gluten-free, vegan, and those free of the top 9 food allergens, positioning it as a frontrunner in a niche yet expanding segment.

Furthermore, Pacha's lean operational model, evidenced by its low capital intensity and strategic direct-to-consumer distribution approach, allows for greater agility and responsiveness to market demands. This operational efficiency and its noteworthy online revenue growth suggest that Pacha is well-equipped to continue its upward trajectory.

In conclusion, Pacha's innovative product offering, impressive growth metrics, and alignment with consumer trends in health and sustainability underscore a bullish outlook for the company. Its ability to thrive in a highly competitive market and its strategic focus on health-conscious and environmentally aware consumers positions Pacha as a compelling investment opportunity with significant growth potential in the organic food sector.

Next Section: Bearish Outlook

Bearish Outlook

While Pacha's impressive year-over-year sales growth and strong performance in the online market segment highlight its potential within the organic and gluten-free bread market, several bearish factors merit close consideration. The company operates in the highly competitive US Bread industry, facing stiff competition from established brands such as Base Culture, Oroweat, and Canyon Bakehouse. This competitive landscape is exacerbated by the low barriers to entry in the food and beverage sector, which could lead to increased competition and pressure on margins over time.

Another point of concern is Pacha's financial health. Despite the reported high growth, the company is pre-profit with a significant monthly burn rate of $93,023.75 and a net income most recent fiscal year end of -$1,116,285.00. This burn rate is notably high relative to its cash, which is $169,950.00. Such a financial position could necessitate additional fundraising in the near term, potentially diluting existing shareholders or burdening the company with debt.

Moreover, Pacha's lack of patents for its sprouted buckwheat bread product may pose a risk. Nothing stops competitors from replicating Pacha's products without intellectual property protection, potentially eroding its market share and unique value proposition.

Lastly, while the company's focus on a rapidly growing niche within the bread market—organic and gluten-free products—is commendable, the overall bread market in the US is mature, with relatively slow growth rates. This could limit the overall market opportunity for Pacha despite its impressive individual performance metrics.

In summary, while Pacha demonstrates strong growth and a compelling product offering, potential investors should carefully consider the challenges posed by the competitive landscape, the company's current financial health, the lack of intellectual property protection, and the characteristics of the broader market in which it operates.

Next Section: Executive Summary

Executive Summary

Pacha, a burgeoning organic consumer packaged goods brand, is making significant strides in the food, beverage, and restaurant industry with its unique sprouted buckwheat bread. Founded in June 2020 by Adam Hiner, Pacha has quickly established itself as a leader in producing organic and gluten-free bread that caters to various dietary needs. Beyond its gluten-free and organic certifications, Pacha's products are vegan and free from the top 9 food allergens, making them a versatile choice for consumers seeking nutritious and inclusive food options.

With an impressive revenue growth, Pacha reported more than $2 million in revenues in 2022 and has now achieved a $3.6 million run rate. This growth is underpinned by a 600% year-over-year sales increase and a remarkable 70% quarter-over-quarter growth in online revenue in 2023. Such traction is further evidenced by the company's successful distribution through national retailers like Whole Foods and MOM's Organic Market. This indicates a broadening consumer base and increased market penetration across the United States.

The company's commitment to sustainability and direct procurement of raw ingredients from farmers practicing organic and regenerative farming underscores its mission to nourish people and the planet. This approach ensures the quality and integrity of Pacha's products and aligns with growing consumer demand for environmentally responsible and health-conscious food options.

Despite operating in the highly competitive and low-barrier-to-entry US bread market, Pacha distinguishes itself through its innovative product offering and solution. The company's use of naturally occurring wild yeast and the absence of harmful additives in its breads set it apart from competitors like Base Culture, Oroweat, and Canyon Bakehouse. Moreover, Pacha's significant revenue growth and strategic use of proceeds for marketing and innovation position it well for continued expansion and success.

However, potential investors should consider the challenges associated with the food and beverage industry, including the need for continuous innovation and marketing to maintain consumer interest and loyalty. Additionally, Pacha's pre-profit status and reported net loss in the most recent fiscal year highlight the financial hurdles the company must overcome to achieve profitability.

In conclusion, Pacha's impressive growth trajectory, commitment to quality and sustainability, and strategic market positioning make it a compelling opportunity for investors looking to support a company with a strong potential for impact and returns in the food and beverage sector.

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Pacha on Wefunder 2024
Platform: Wefunder
Security Type: Equity - Preferred
Valuation: $11,198,583
Price per Share: $11.00

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