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. 

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.

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.

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.

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. 

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).

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.

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.