Aussie hot sauce brand Bunsters has raised over $300,000 in a crowdfunded equity round in one week.
The Perth-based brand, famous for producing the cult hit 'Shit the Bed' hot sauce since 2015, wants to expand production and move into producing more condiments.
Founder Renae Bunster says equity crowdfunding is a good way of raising capital while maintaining control of the company and engaging with fans of the brand.
Fan favourite Australian hot sauce brand Bunsters has shot straight out of the gate in a round of equity crowdfunding, landing over $300,000 in the first week from fans of the brand – before the raise was even made public.
Bunsters, which was founded by Renae Bunster in 2015 to launch the wonderfully-named 'Shit the Bed Hot Sauce', currently pulls down over a million dollars a year in revenue, a significant chunk of which comes from overseas markets like the United States. 'Shit The Bed' regularly tops the hot sauce sale charts on Amazon in US.
The company has also managed to maintain growth through the coronavirus pandemic. Sales in March this year were double what they were in March 2019.
Bunster attributes that success to the fact 'Shit the Bed' was built as a direct-to-consumer product from the get-go – and not just because of its name, which would be unlikely to appear among other condiments on a shelf at Coles. "When COVID happened, we were ready to go," she said.
The equity raise, which is handled by Birchal – the equity crowdfunding "sister platform" to Pozible – was initially launched privately to fans of the product. They ponied up $300,000 within a week, blitzing the initial goal of $100,000.
The reason for the capital raise is twofold, according to Bunster. Firstly, it is money to bolster production of the company's core hot sauce product. "If we get a phone call from a big overseas market right now saying, "We want to put your hot sauce in our 10,000 stores", we don't have the money sitting there ready to be able to do that," she said.
Secondly, Bunster wants to expand the company's product range, with the same ethos of Australian-made with Australian ingredients. "What I did with hot sauce, by making delicious hot sauce with 13 different veggies in it, I'm gonna do that for other condiments."
Bunster says the crowdfunding route – which she already pursued for the first production of 'Shit the Bed' back in 2015 – is preferable to seeking venture capital, as it lets her maintain control over the product. The success of the first crowdfunding effort and the eagerness of hot sauce fans to get on board convinced her that it would be effective for the latest round.
"The only other way to get the kind of money we're after is to go to high net wealth investors or private equity and potentially lose a bit of control of the company," Bunster said.
As anyone who has dipped their toe into the world of online hot sauce fanaticism will tell you, achieving cult status in such a crowded and competitive field can be daunting. One way to get on the map is to have your sauce appear on "Hot Ones".
"Hot Ones" is a web series produced by online foodie magazine First We Feast and Complex Media, featuring host Sean Evans interviewing celebrities as they eat chicken wings drenched in progressively hotter sauces. Having their tastebuds torched by increasingly nuclear sauces while being asked probing questions leads interview subjects to be more candid, or so the thinking goes.
Bunster, who said she had been lobbying to get on the show for some time ("I'd been hassling him about it for two years") said being featured "opened doors" for the product, especially in the US.
"It's like you've been called up to play on a national sports team," she said. "It's actually quite difficult to get your hot sauce onto that show."
"Your sauce has to be made out of all whole ingredients and it has to be really tasty," she explained. "You're not allowed to use extracts. You can't be using xanthan gum for thickness."
"The guy who picks the hot sauces is like a god in the hot sauce industry and he only accepts the best."