A SoHo-based baby formula startup focused on reducing additives and harmful chemicals in infant food has raised $72 million amid a federal crackdown on the industry, a federal filing shows.
ByHeart, launched in 2016 by siblings and co-founders Mia Funt and Ron Belldegrun, sold $72 million in equity and other options to undisclosed investors, according to a document filed with the U.S. Securities and Exchange Commission last week.
The new capital brings ByHeart’s total fundraising to $470 million, according to Belldegrun, the company’s CEO. He said the funding will support research and development and the company’s expansion into more than 6,000 retail stores. ByHeart began selling its formula in Walmart, Whole Foods and Wegmans last year.
ByHeart’s baby formula – which costs $42 for a 24-ounce can, or $39 with a subscription – includes a patented protein which it says is the next best thing to breast milk. The formula is made with whole milk from organic, grass-fed cows and does not include additives such as palm oil, GMOs or corn syrup, the company says. Other formula brands including Enfamil or Similac cost approximately $35 for a similar sized can.
The startup has aimed to differentiate itself from the rest of the industry by focusing on nutrition and relying on its own manufacturing facilities, with three FDA-registered plants in Iowa, Pennsylvania and Oregon, Belldegrun said. Three major manufacturers capture 90% of the infant formula market, according to ByHeart, raising concerns about the availability of baby formula as well as the overall nutrition and quality.
Industry concerns have garnered attention from U.S. Health Secretary Robert F. Kennedy Jr., who announced a plan called “Operation Stork Speed” last month targeting supply chain issues and harmful contaminants. Kennedy met with executives from major baby formula manufacturers, including Abbott, Perrigo, Reckitt Benckiser and Bobbie last to discuss supply chain issues and quality, including the rationale behind using seed oils in formula production, according to media reports.
“We see Operation Stork Speed as a huge opportunity to deliver the change in this industry that we’ve been championing from the outset,” Belldegrun said.
