Vejii acquires Vegan Essentials and announces CAD$10m capital raise: 'We anticipate going public'
Vejii, which launched its online business approximately four months ago in the US, and in Canada last week, carries over 3,000 SKUs of often hard-to-find plant-based products. Its target audience is flexitarian consumers who may still eat meat but are looking to incorporate more plant-based foods into their diet, says the company.
Vejii Express items - the site's most popular SKUs - are shipped from Vejii's warehouse in Austin and arrive in a single shipment within two-business-days, while all other items in a single order can come from multiple warehouses through its partners and may arrive in separate shipments.
"Based on consumption habits we have seen in the US, we believe that over time US plant-based products sales could grow to in excess of a US$20bn total addressable market opportunity," said Darren Gill, Vejii president.
Operating since 1997, Vegan Essentials has a well-established reputation among vegan consumers -- its core audience -- in the US, said Zelickson (Vegan Essentials' unaudited 2020 revenue was C$3.57m, mainly driven through organic search traffic, with a gross profit of approximately C$785,000).
"In terms of direct competition, there’s only about three competitors in the US right now," Zelickson told FoodNavigator-USA, who clarified he's referring to online retailers that only sell plant-based products (i.e. excluding companies such as Amazon, Instacart, and Thrive Market which sell animal-based products as well).
Years of consumer insights
With the acquisition of Vegan Essentials, Vejii will be able to tap into the organic SEO strength and years of consumer insights data the business has built online since launching online over twenty years ago, said Zelickson.
"As a website that’s been around for so long, they really have a lot of domain authority, which means that when you search for any vegan products online they naturally show up in the top rankings on Google without any paid advertising," he said.
"It makes it a very profitable business and a great addition to Vejii," said Zelickson, who said the company will begin to introduce paid digital advertising to Vegan Essentials' online business while operating the two sites -- ShopVeji.com and VeganEssentials.com -- separately, rather than folding one into the other.
"Vegan Essentials has quite a different value proposition than Vejii, so we're very comfortable continuing to run the sites in parallel to one another," he said.
Future growth: 'We anticipate going public'
Along with the acquisition news, Vejii also announced that it has signed an engagement letter with Eight Capital, as lead agent, to undertake a syndicated brokered private placement of special warrants and subscription receipts to raise CAD $10,000,000 to fund its rapid growth.
"We need to continue to raise capital for growth in a high-growth industry. The funds are going to be used for financing growth in marketing, inventory purchasing, and technology development," said Zelickson who said Vejii plans to expand to international markets in the near future.
"As we anticipate going public in the future and raising more capital, this really gives Vejii a great boost in trying to gain as much of the online market share for grocery e-commerce as possible," he said.
Vejii partners have access to a vendor portal allowing them to upload new products, monitor or track sales data and "manage integrations that are best for your business (whether through an API, custom integration, or simply receiving and processing orders as a PDF)," says the company.
For vendors that drop ship, says the company, "transactions are processed through our site and passed directly to you, for fulfillment, with no hidden fees or costs – and your account will be settled on a weekly basis to help you manage your cash flow appropriately."
