Primal Life Organics

Primal Life Organics

Growth Stage

100% Truly natural, organic oral & skincare products that improve your health!

100% Truly natural, organic oral & skincare products that improve your health!

Overview

Raised to Date: Raised: $262,516

Total Commitments ($USD)

Platform

Republic

Start Date

01/04/2021

Close Date

04/29/2021

Min. Goal
$25,000
Max. Goal
$1,070,000
Min. Investment

$100

Security Type

SAFE

Series

Series A

SEC Filing Type

RegCF    Open SEC Filing

Valuation Cap

$18,000,000

Discount

20%

Rolling Commitments ($USD)

Status
Funded
Reporting Date

05/01/2021

Days Remaining
Funded
% of Min. Goal
Funded
% of Max. Goal
Funded
Likelihood of Max
Funded
Avg. Daily Raise

$2,283

# of Investors

558

Momentum
Funded
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Year Founded

2012

Industry

Beauty & Personal Care

Tech Sector

Non-Tech

Distribution Model

B2B/B2C

Margin

High

Capital Intensity

High

Location

Copley, Ohio

Business Type

Life Style

Primal Life Organics, with a valuation cap of $18 million, is raising funds on Republic. The company makes organic, vegan, and gluten-free oral hygiene and skincare products. The products of Primal Life Organics do not contain any synthetic fragrances, chemical preservatives, and toxins. Trina Felber and Josh Felber founded Primal Life Organics in January 2012. The proceeds of the current crowdfunding raise, with a minimum target of $25,000 and a maximum target of $1,070,000, will be used to build the retail strategy, bring on key hires, and grow direct-to-consumer marketing. Primal Life Organics has over 300,000 customers and almost $5 million in annual sales. The company has retail partnerships with Walmart, Natural Grocers, and Palko Distribution and projects to reach $21 million in revenue by 2021.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$3,695,154

$4,684,669

COGS

$592,144

$813,081

Tax

$0

$0

 

 

Net Income

$3,497

$94,736

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$100,924

$113,010

Accounts Receivable

$55,013

$9,363

Total Assets

$300,031

$277,823

Short-Term Debt

$487,926

$165,740

Long-Term Debt

$0

$20,191

Total Liabilities

$487,926

$185,931

Financials as of: 01/04/2021
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Synopsis

In the 20th century, consumer goods companies could insert a huge range of toxic chemical ingredients into their products with little scrutiny from consumers. We didn’t yet have scientific advancements that linked certain plastics to cancer or revealed the hazards of high doses of fluorides. These days, that’s no longer true. Consumers pay attention to labels and almost 70% believe that it is important to consider ingredients when deciding which products to buy. 

Consumers’ preference for all-natural, organic products has extended from the food and beverage industry all the way into the cosmetics and beauty industry. Natural deodorants, natural toothpastes, and more now have dedicated sections on supermarket shelves, and Primal Life Organics is one of many companies taking advantage. 

Primal Life is an e-commerce brand selling natural oral and skincare products. The company offers a wide range of products, from toothpastes, toothbrushes, and electronic tooth whiteners to face washes, acne products, and deodorant. The company has generated millions in annual revenue for several years, largely from Amazon and direct-to-consumer sales, and will soon expand its retail distribution partnerships. 

Primal Life Organics’ current Republic raise has been rated a Neutral Deal by the KingsCrowd investment team. 

Next Section: Price

Price

Primal Life Organics is raising a Crowd SAFE at an $18 million valuation with 20% discount. This price seems somewhat reasonable from the perspective of revenue multiples. Annual revenues have hovered around $5 million in recent years, and a roughly threefold multiple is reasonable for a consumer products brand. Therefore, Primal Life’s price score is quite strong. 

Next Section: Market

Market

Primal Life Organics is serving a handful of niche markets. For instance, the market for natural deodorant was valued at just $62.9 million. Even with a projected CAGR of 14.1%, the market will be tiny for a long time to come. The market for natural toothpaste is somewhat larger at $1.5 billion market value, though that niche is roughly one-thirtieth of the overall $31.7 billion oral care market. Arguably, Primal Life’s addressable market is decent-sized if adding together each of the markets it serves. Thus, the company’s market score is above average.

Next Section: Team

Team

Primal Life Organics is run by husband-and-wife team Trina and Josh Felber. Trina, the company’s founder and CEO, is a nurse and “biohacker” with experience in the natural beauty space. She authored a natural skincare book — Beauty’s Best Kept Secret: 3 Simple Steps to Power Your Skin — and also positions herself as a thought leader in natural oral care. 

Josh Felber is a “growth hacker” with more than 20 years of experience in business. He has founded several businesses, including a crossfit studio in Akron, OH, a chiropractic clinic, and a startup consultancy. Felber’s LinkedIn profile states that he is “a serial entrepreneur with 28+ years of starting and growing multiple multi-million dollar companies (including one with $5 billion annual revenues).” He currently serves as CMO for Primal Life Organics, in addition to multiple other positions.

Trina Felber brings strong industry knowledge, and her husband is a serial entrepreneur. However, neither has deep experience in running a CPG company. Balancing these factors together, the company’s team score is middle of the road.

Next Section: Differentiators

Differentiators

Differentiation is one of Primal Life Organics’ biggest weaknesses. The company appears to be a semi-faceless distributor of natural beauty products on Amazon and a nondescript website, and it lacks any obvious brand value. It seems as though a consumer seeking natural toothpaste or natural deodorant could stumble upon Primal Life and make a purchase but might just as easily find another company selling similar products and buy those instead. In fact, it appears as though one of Primal Life’s only clear differentiators is price — and not in a good way. The company’s products are very expensive, with a tooth whitening kit retailing for more than $400 and toothpaste selling for more than $40. Therefore, Primal Life’s differentiation score is its lowest across all five metrics.

Next Section: Performance

Performance

Primal Life Organics generates a remarkable amount of revenue for a relatively simple consumer products business. The company has seen more than $2 million in revenue each year since 2016, with record revenues of $4.68 million in 2018. However, it must be noted that revenues declined in 2019 by almost $1 million, so Primal Life’s performance is quite volatile. 

In addition, Primal Life has been operating profitably for the last three years. The company still turned a small net profit even when revenues declined in 2019 and has reportedly maintained profitability in 2020 (though 2020 financial data is not available). 

By the scale of revenue figures alone, Primal Life has impressive performance, and thus the company’s performance rating is quite high. However, prospective investors should note additional context around these metrics: Primal Life did experience a significant drop in revenue in 2019, which is unexplained in the company’s raise materials, and it’s not clear whether 2020 revenues bounced back. 

Next Section: Other

Bearish Outlook

It’s easy to focus on Primal Life’s large annual revenues and assume that the company is a strong performer. However, there are several additional data points that paint a more complicated picture. 

First off, it’s concerning that the company’s revenue declined so significantly in 2019 and even more concerning that Primal Life doesn’t explain this decline in its raise materials. Prospective investors might even wonder why the company is raising capital at this time. It has been running profitably for the last several years and has clearly grown steadily without outside investment. In addition, the company does not have strong brand value and sells non-differentiated products in multiple niche markets at once. This formula does not typically add up to a business with stable growth. 

Overall, it seems as though Primal Life may have reached a growth plateau. From the founders’ perspective, the business is already quite valuable and is generating a profit. They could reasonably be satisfied with progress so far. Investors, though, wouldn’t gain any dividends from low growth and might not reap a return if the business fails to exit (which seems relatively unlikely at this time, given low brand value and products that aren’t obviously proprietary).

Next Section: Bullish Outlook

Bullish Outlook

While Primal Life offers some confusing signals about financial performance and differentiation, at the end of the day, the company generates millions of dollars in revenue. It’s easy to point out inconsistencies and missing data points, but investors shouldn’t neglect the fact that Primal Life has grown from zero to millions in sales with no outside investment. 

In addition, the company is entering a new and potentially lucrative stage of growth. Primal Life has already forged a distribution partnership with Walmart and Natural Grocers, and inking more deals with national retail chains is a major focus for 2021. Even if e-commerce sales are plateauing (as they seem to be, based on recent years’ lack of revenue growth), the company has yet to unlock a major new channel of revenue. If retail sales take off, the company could reach an entirely new market and reap many more millions in revenue.

Next Section: Executive Summary

Executive Summary

Primal Life Organics sells natural oral and skincare products, from toothpastes and teeth whitening devices to deodorants and face washes. The company’s top-line revenue is its greatest selling point. E-commerce sales on Amazon and the Primal Life website have generated at least $2 million in revenue for the last several years, peaking at almost $5 million in 2018. 

On the other hand, Primal Life may be struggling to grow beyond current levels. Revenues declined significantly in 2019, and the company doesn’t share 2020 revenue figures. Notably, this fact is not discussed on Primal Life’s raise page. Concerns about differentiation and market size also throw the company’s long-term exit potential into question. Therefore, Primal Life Organics has been rated a Neutral Deal. 

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

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Primal Life Organics on Republic
Platform: Republic
Security Type: SAFE
Valuation: $18,000,000

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