Founders of Farmer’s Pick and Vitable pitch their companies

Bryce: [00:00:09] Welcome back to another episode of Equity Mates. Or should I say, Hi everyone, You are tuning into equity mates. And guess what? You've won a car. Just kidding. But you do get valuable advice on your investing journey, whether you're a newbie or a Warren Buffett in disguise. We're here to elevate you from your first stock purchase all the way to those delicious dividends. If you're a first timer to our show, a big, warm welcome to you. Now, my name is Bryce, and as always, I'm joined by my equity buddy Ren. How are you? 

Alec: [00:00:44] I'm very good, Bryce. Good to be here. As we've been doing this year, you've asked ChatGPT to play with your intro, and I've got to guess who it is. 

Bryce: [00:00:55] Yeah, He's saying yes. 

Alec: [00:00:57] I'm going to. Yeah, I'm going to guess. Oprah. 

Bryce: [00:00:59] Yeah. You have absolutely no debt. Yes. 

Alec: [00:01:03] Yeah, Yeah. Is the car the car guy?

Bryce: [00:01:05] Yeah. Big car giveaways. Big car giveaways on Oprah back in the day. That's why it was in there. It's good from scratch. Hey, did you get that, Johnny?

Johnny: [00:01:12] You know, I was thinking Larry 

Bryce: [00:01:14] Oh, yeah, yeah. 

Alec: [00:01:16] Yeah, yeah. Okay. 

Johnny: [00:01:17] But you've heard the conspiracy theory of Oprah. Is that in the 2000s, I thought there was some potential domestic terrorism related to her. That's why she told everyone to keep on looking under their seats. 

Alec: [00:01:28] Well, was. Is that a joke? A rumour. There you go. 

Bryce: [00:01:36] Well, there you go. What do I do? 

Alec: [00:01:37] I never heard that. Anyway, we should introduce you, Johnny. Yes, We've got you in the room with us. Johnny Wilkinson is the co-founder and managing director of Equities, a platform that some of the equity markets community may be familiar with may have invested on before. But we'll go through the platform, if people aren't familiar. But you're here because we're launching a new type of episode, an episode that I wanted to call Fish Tank and the price promptly shut down. But you have a steady stream of Start-Up founders coming through your door, and we're now getting some of them on the podcast to pitch their business.

Bryce: [00:02:19] It's a format that I think is going to be quite exciting because these are, you know, start-ups that are in some in their early stages, some are quite mature. I remember through equities maybe three or four years ago, I looked at a company called West Winds Gin. Right at the time, gin was taking off. I didn't make an investment. I think you could have put 2000 bucks in or something. Massive regrets because it's gone on to be incredibly exciting success. So yes. 

Alec: [00:02:45] Okay. Well, given we're talking about what you can do on the platform, Johnny, why don't you introduce people who are not familiar with equities to the platform? 

Johnny: [00:02:51] Sure. So equities is an investment platform for unlisted equities. There's a number of ways we do it, but the main way is under the equity crowdfunding regulations, which are new laws in Australia that allow everyday investors to invest in unlisted companies. We also operate in New Zealand as well under some similar laws. So we were part of getting these laws changed so that anyone over the age of 18 in Australia can invest often from as little as $250 in one of these start ups. So we've raised just shy of $100 million, 400 and 2030 companies to date, some of them like West Winds. Gin was the second company we raised for in Australia. Under the Australian laws they're doing well. Some other interesting ones are next door which got acquired by Uber. That's probably one of the more notable ones. A few companies like Mad Pause, which are listed on the ASX, and a couple of out of New Zealand that are listed too. So yeah, it's been an interesting journey and we've got lots of exciting companies coming up. 

Bryce: [00:03:50] Awesome. Well, the great thing about these episodes is often when we speak about unlisted opportunities on the show, you know, they're very difficult to get access to for our audience. The great thing is the companies that are going to be coming in and pitching in this episode and over the months to come is that you will get the opportunity, if you're interested, to make an investment through the platform. So we're excited to bring the founders into the studio, but it's probably worth just contextualising or understanding a little bit more about unlisted investments and what role they can play overall in our portfolio. So how do you think about it and how should the audience be thinking about these type of investments? 

Johnny: [00:04:25] Sure. So it depends on everyone. These are the alternatives in your portfolio, which can be anything from single digit percentage to some funds or some investors have more than half of their portfolio. So if you look at US endowment funds that have lots of money, lots of time and can be quite, quite careful in their allocation, they're willing to invest in some of these alternative assets because they know the benefits and returns a tremendous. So there's opportunities to invest in things that are uncorrelated to traditional market returns. So that's one of the benefits that can reduce the risk of your portfolio and is an effective way of diversifying potential returns. And typically over time, these assets will generate larger returns. The listed market equivalent. 

Alec: [00:05:13] Yeah. I think it's important to stress though, that that's at an asset class level. But, you know, the nature of venture capital is it's sort of zero or one in many cases. It's whether you have a great outcome or you don't. 

Johnny: [00:05:26] Definitely. And that's why we've set up the platform so that people can invest, might be in one company, but particularly if you're looking at building out a portfolio and looking at it as an asset allocation strategy, then you should be investing in ten, 20, 50 companies and the probability of generating IRR of greater than 25% is exponential as you start to add companies into your portfolio. So again, with a platform that is successful, it doesn't cost anything to invest in the way of fees. So you can, you know, put ten companies at $250 in a portfolio and build it from there. That's why we set up the platform so that everyday people can get access and start building out that part of their asset allocation. [00:06:12][45.3]

Alec: [00:06:12] Yeah, it does make a very inaccessible part of the market a lot more accessible and we love that. The one other thing we should talk about before we actually hear from two founders themselves is just liquidity, because that is something to be mindful of when you're setting up. 

Johnny: [00:06:27] Definitely. So again, getting back to these are the sort of medium to long term investments that you should be making. And the benefit and also the detriment of these types of investments is the liquidity. So you're not looking at a stock price moving up and down every day. So you're removing some of the potential emotional desire to sell something on a down day. This can be great for the companies because they're not fixated on what the stock price is, so they can focus on growing the company. But yeah, there's not always a ready way to sell shares in these companies. We have a product we're going to be rolling out soon with a few of the companies that have raised equity crowdfunding with us before. That does allow some limited trading. We built this principally for stone and wood, the brewery before they sold. So yeah, we're big believers in trying to create an efficient market and a part of that is having some facility or some access to liquidity. But by the same token, people should really be thinking about investing this in a medium to long term horizon. 

Alec: [00:07:30] Generally you get your money back when the company IPO's or when it sells. 

Johnny: [00:07:35] Yeah they're the main exit opportunities and we try and make that apparent with the deals. We also do the occasional IPO so you can invest in IPOs and we do actually do pre IPOs as well. So there is more of a line of sight to an exit or a listing. We try and make that as obvious and articulate that in the offer. But you know, it's always difficult and nothing's guaranteed around those sorts of things. We've had some companies that were raising a year or two ago with plans to list in the last 12 months and obviously the market's been terrible. So that put that on ice. We do have one of those companies that it's going to be coming back, raising again with an actual line of sight to IPO next year. And there's more flexibility in how we can help some of these companies list. We can do things like compliance listings as well. So it's a bit more technical, but if they meet profitability tests and if they have the spread and other requirements to list, they can kind of go on directly, much like Spotify actually did. 

Alec: [00:08:31] Oh, okay. 

Bryce: [00:08:33] Well, Johnny, as we progress through this over the next few months, we're excited to get you back and unpack all things that are going on in the private markets. But I think it's time to bring in our first founder. Before we do, we must say that while we all license, we're not aware of your financial circumstances. And any information on this show is for education and entertainment purposes only. All advice is general. Before we get going, we just want to thank equities for sponsoring this episode. We thank them for supporting equity mates and we do rely on our partners to continue to provide our community with free content to help you on your investing journey. Now, it is super important as well that we make it clear that you are about to hear two pitches from two founders and there is no offer being made. You need to do your own research on these companies and we want to make it clear that this is not personal advice. Any information in this episode is for educational and entertainment purposes and it is general advice only. Now run the companies. [00:09:27][53.9]

Alec: [00:09:28] Yeah. So today we have two founders coming in. The first is Larah Loutati from Viterbo and then after that we've got Joshua Brooks Duncan from Farmer's Pick. We won't explain the companies. We'll let the founders do it. They'll do a far better job than we did. So without further ado, let's get to our first pitch from Larah about Vitable. 

Bryce: [00:09:51] Larah, welcome. 

Larah: [00:09:52] Thank you. Thank you for having me. 

Bryce: [00:09:54] Now, help us understand what Viterbo is. What is it that you're trying to solve? What is it that you do? 

Larah: [00:10:01] Yeah. So essentially, perhaps I'll start by telling you a little bit more about my journey. Yes. Which is quite relevant to why we started viable. So I was working in a Start-Up. I was working quite hard and I started feeling some symptoms that I think a lot of people feel on a daily basis, which is, you know, brain fog, afternoon energy slump, waking up, feeling tired, digestive discomfort, like all these things that we've all felt, I think. And I didn't know what to do. So like a lot of people, I just Googled my symptoms and went down the rabbit hole. You know, there were so many different articles, so many blogs talking about different solutions. I just didn't know what to do. So like a lot of people, then I went to the chemist and I browse through the eyes of similar bottles and I just felt super overwhelmed. My chance was that I had access at my job to a nutritionist and then that Sherpas, they were working with me and my team and they were the ones who started asking me very specific questions about my diet, my lifestyle, and just explaining in simple words how this could be impacting my health and and creating nutrition and nutrient deficiencies. And so it's through that kind of, you know, access to having access to the science. But in simple terms that I started understanding what it could be doing. And then they recommended a couple of high quality supplements that I took. After a few days, felt better. After a few weeks, my energy levels were coming back and after a few months I felt better than I had ever felt before. So for me, that was an epiphany. And I just realised that, you know, that whole journey that I had been through, there was a way to just simplify it and make it accessible to all. And the way I decided to do it is by leveraging what I already knew, which was direct to consumer subscription model, which was the Start-Up that I was working at. And so that's how we created vegetables. So really what we do is that we guides people with on their own as guidance by giving them an understanding of what they should be taking based on their lifestyle, diet and health goals. And to do that, we do that through an easy quiz that you take on our websites, ask you a few questions, and then will match you to our recommendation. So we've created an algorithm to do that, and we've worked with nutritionists and not Sherpas to create it. So let's say you exercise a lot, you experience muscle cramps and you have trouble sleeping, will definitely give you magnesium. You don't eat a lot of seafood and you have you get sick very often. It's very likely that you need zinc. So we'll just match you to the right supplements and then we'll ship all your vitamins into daily sachets made from home compostable packaging and then every 30 days to your doorstep. So you don't need to think about it. You don't need to open 20 bottles every morning to get your supplements. And also importantly, you don't forget to take them because then grab and go easy for them. It. 

Bryce: [00:12:50] I love it. 

Alec: [00:12:51] Yeah. As someone who has a few half open bottles of vitamins in my desk but currently takes nothing, I think I'm probably a perfect customer. Take us through the customer side of it. You mentioned that when you go online, you do the quiz. But you know what? What are we paying? And you know what? Every 30 days you said we get it delivered. So just talk us through the customer journey a little more. 

Larah: [00:13:14] Yeah. And just back to the point that you just made, you know, you have a few vitamins in your cupboard that you're not taking. And so how do you expect them to have any effects? Right. So that's really what we're trying to address here and solve is helping people feel the effects of, you know, the solution that they went for by helping them, taking it, taking it every day for a start, and then obviously taking the right thing. In answer to a question, you come to our website to have that come. That are you you take a quick quiz. We'll ask you a few questions about your health goals first. So do you want to, you know, improve your sleep, your stress levels or reduce, you know, stress levels? Do you want to take care of your joints? You know, we have 12 health goals and then we'll ask you a few questions to understand, to kind of narrow down why you may be not sleeping well or waking up feeling tired or why do you have joint swelling. By asking specific questions about diet lifestyle such as exercise levels, what type of sport do you do? You know, Are you a vegetarian, etc., etcetera. And then based on that, the algorithm will match you to your recommendation and then you can still adjust it. So if you are taking you know, if you show it every day and you want to add that to your pack, then you can choose to add it. If you're already taking magnesium, then you want to remove it, That's fine. You can completely customise it and then you check out. And so the price our prices are just based on the on product. So if you have, we'll just add the price of each product. So as an example, our vitamin D, you might be, you know, $9 per month are ashwagandha, which is a premium. Herb will be $16 per month. Then you just add that and everything else is free. So we'll pack your vitamins for you. Every order is made, you know, customised. That whole service is free, the delivery is free above $30. And you also have access for free to our mobile app which helps you build healthy habits. So remind you to take your vitamins every day, track your progress so you see that what you're doing is working and then obviously I just order, etc.. 

Bryce: [00:15:19] What's the average order price like on a monthly basis? 

Larah: [00:15:24] So it ranges. We have customers who order, you know, your $30 order and you have customers who have was actually looking at it yesterday who have, you know, 258 hour order every month. And so it really ranges in depending on the user profile, let's say, to give you a range maybe between the 50 and 70, it would be probably the average order value. 

Bryce: [00:15:47] I mean, do you check in? So I'm just thinking now like, you know, my lifestyle is X over the next three months or it is what it is, but that might change. Like, can I then come back to you guys and say, you know, I've actually started dating a hate more fish, I don't need the zinc. Or do you check in with people as they go? 

Larah: [00:16:04] Yeah. So you can actually as your needs evolve and it's a really good question. You can just take the quiz again and just, just your answers or you can reach out to one of our team members. So our customer care people are all nutritionists and you can just, you know, ask questions like your question about, you know, not eating fish anymore and do I need zinc? And they can just help and guide you to make the choice of your next book is interesting. 

Alec: [00:16:29] So let's turn to the business story. When was it founded? How many years have you been in business? And tell us a bit about their growth and revenue. 

Larah: [00:16:36] Yeah, so we started volleyball in 2019, so we got initial funding from Roquette and Doughnuts. Who are the same investors as, you know, the iconic or of fresh they so they invested in March 2019 and then we launched our products and our service towards October 2019. So it's just before COVID, which was an interesting time. We then went on to kind of build out our whole solution, which, you know, didn't exist at all in Australia. So it was kind of complex to build in terms of supply chain technology but also regulatory landscape. So we did that and then we grew quite fast to reach $12 million to approximately $12 million sorry, revenue run rates as of June this year. And in total we had we have acquired 200,000 customers approximately, and not only in Australia, no, 25% of our revenue is done internationally. So Hong Kong, Singapore, New Zealand, Malaysia as well. 

Alec: [00:17:44] That's great.

Bryce: [00:17:45] So talk us through the competitive landscape because Alec and I both were in retail and walking. Down the health and beauty aisle. It seems there's always a new brand coming and it feels like in vitamins particularly, it is really about the branding and the marketing because I would hope at the end of the day, a magnesium tablet is a magnesium tablet. So how do you think about that and how do you position yourselves against, I guess, the big brands that you can just walk in and buy off the shelf? 

Larah: [00:18:11] Yeah, very good question. So essentially our solution. So we're not another vitamin brand essentially. And really what we focussed on when we build Vitable is to really address the main friction points of the current customer journey and what they are and not touch kind of briefly on that earlier is the fact that people don't know what they need to do, don't know what brand to trust, you know, they don't know what dosage of vitamins they need to take for how long. That's a major pain point. And people still end up buying something. But that's one of the reasons why they end up in the cupboard, is also because they're like, oh, I don't really know if I should be taking this. So that's number one. And number two is if you're if you take more than two vitamins per day, then you're like opening your bottles. You need if you can't take them in an empty stomach in the morning, what do you do? You just you can't take your vitamins with you at work and at the gym. So we solved that problem with the daily sachets. And then another friction point is, you know, I forget to take my vitamins. I have them and I just forget to take them. So again, you don't feel the results. And so that's why we're addressing with the digital solution. So really what we do differently from another vitamin brands is the fact that we mix a high quality supplement and a digital solution. So technology solution to help you build healthy habits and feel results on your health. And so through that, we also get a lot of data about about consumers. So we understand their unmet needs, but in real time. So to give you maybe an idea, just an example, when COVID hit in March 2020, our suppliers contacted us and they said you should you have to lock in vitamin C and zinc. Everyone will want immunity products where everyone will run out. So you should just place a big order. But that's not what we were saying in our seeing in our data are that which again, it's real time was showing us that people wanted sleep and stress products because they were stuck at home, because COVID was, you know, they were narrow, no cases in Australia. And so people were just stuck at home and stressed and with their kids and, you know, kind of overwhelmed. So we shifted our marketing and our communications to talk about how to reduce stress and to we developed also sleep products that became a bestseller very, very quickly. And the big brands, the big retailers only heard about that or knew about that six months, 12 months later. So that's really, I think a key, a key competitive advantage is the amount of data that we have about consumer behaviour, not market research. 

Alec: [00:20:36] So you've grown to $12 million revenue run rate in three years, 100,000 customers. Things seem to be going well. Why rise now and what do you want to do with the funds?

Larah: [00:20:47] So as I think as founders, we always try to, you know, accelerate our growth and accelerate the delivery of our vision. So that's why, you know, we always raise capital when that's available. And what we did recently is that's through our existing investors and new venture capital firms. We raised convertible notes of more than $7 million. And so we thought and you know, I've known Journey for a while as well, so we thought that it would be an amazing time to actually also open this round to our community. So as I said, you know, we acquired 100,000 customer throughout our journey. We have customers who, you know, love us. We have a 4.9 star rating on TRUSTPILOT. People are super happy with the product, so why not also offer them do opportunity to be part of this journey and of our success by allowing them to become shareholders? So that was really the idea. And we also we also kind of see it as being a really good way to, yeah, kind of create a little bit of brand awareness around vertical as well through the crowdfunding. 

Bryce: [00:21:54] Yeah. Can you help us understand for those that are interested in becoming part of the journey, help paint the picture of what you think viable looks like in ten years. 

Larah: [00:22:03] I can tell you about our vision and you know, from day one, I've always been very, very passionate about creating products and solutions that can help people achieve the health goals. That's really kind of the vision. And to do that for us, it's using our ability to leverage technology and smart systems so we can help people essentially take the guesswork out of their health and wellbeing. We know that everyone is busy. We know that, you know, not everyone has the time to do the research and to go to the stores. So how can we help people with convenient, simple solutions and also honest guidance, which I think sometimes a little bit is a little bit lacking in the industry. You know, it's really hard to understand science. It's really hard to understand how your body works and. And what would be good for you. And I think that a lot of brands and not everyone, but I think a lot of brands, unfortunately thrive on consumer confusion by creating, you know, sort of magic pills and solutions. But it's better that they don't really know, you know, what's in it. So what does to answer your question for us, it's putting together all the possible, you know, products and solutions to help people address all the health goals throughout every single stage of their life journey. So recently we launched a prenatal vitamins as an example, and we're continuously developing solutions to help, you know, women and men at every stage of their of their journey. So whether they, you know, you start ageing and you're thinking about menopause, for example, or you're starting or you're thinking about join health or bone health, we're just developing, you know, the best quality products and digital solution to help you find the right solution. Yeah, at every stage. 

Alec: [00:23:46] And so maybe we should have clarified this earlier, but when we were first talking about the business, I thought you would just be sourcing your vitamins from like wholesale suppliers and really delivering a direct to consumer solution. But then you mentioned you're actually formulating your own vitamins and stuff like that. So tell us a little bit about the development side of the business. 

Larah: [00:24:06] Yeah. So one thing it's interesting what you're saying because it's a question that we get asked a lot where the vitamins come from. So all our vitamins are made in Australia to manufacture in Australia and they're our own formulation, so we don't buy white labelled products. And the reason behind that is I think you said earlier you hope that every, you know, magnesium is. 

Alec: [00:24:28] Going to pick up that. 

Larah: [00:24:30] Well, it's not true. So you have different forms of nutrients that actually can be best absorbed by the body and others that are harder for the body to absorb. And we always try to source, you know, the best quality ingredients in the forms that are the best absorbed by the body. And unfortunately, it's not the it doesn't it it means it's not always the cheapest ingredient. And that's not where we're going. We really want to bring premium solutions to customers. So we work with health experts, so nutritionist, naturopath, pharmacists to formulate our products. We choose the best quality ingredients. And then because we cut the middlemen, meaning we don't pay retail margins which are actually quite high, we are able to distribute that margin into the quality of our products and giving back to the customers essentially. So that's how we're able to do premium vitamins, but at a price that is super, super affordable essentially. So where the price of your standard generic brands that you would find at a chemist, but for quality that is actually much higher. 

Bryce: [00:25:33] Well, it's probably worth just chatting about the deal itself. Johnny, are there any sort of call outs? How much are you trying to raise? What should our investors know? 

Johnny: [00:25:43] Yet so everyone can invest from $250? There's investor rewards and discounts and other benefits that people can get. And again, getting back to one of the benefits of equity crowdfunding is you get these brand advocates, you get people that are out there telling their friends about it. So it's a fantastic way of being a part of something that you believe in. The company is raising between 250 and $3 million on top of the seven and a half that they've already raised. And the offer closes on the 14th of September. 

Bryce: [00:26:13] Nice. So you've got about a week or so if you're listening to get involved in that. What I do like is the investor rewards, which is pretty cool. So if you go on to the landing page, there'll be a link in the show notes. Lara and the team, depending on how much you invest, you actually get rewarded. So for example, if you invest between 250 bucks and 999, you actually get a lifetime discount of 10%. It's pretty cool. And then it progresses from there. So the next one is if you invest between 1000 and 2499, you get that 10% lifetime discount as well as free, clean grains, powder nice. And then it just continues. 

Larah: [00:26:52] All the way up to the exclusive jumper. Vitable jumper. 

Alec: [00:26:59] Premium. 

Larah: [00:27:00] Premium. 

Bryce: [00:27:00] So if you go 10,000 or more, you're looking at a 20% lifetime discount free claim grains, powder, collagen, plus highly high. 

Alec: [00:27:09] Like what? Maybe, maybe just go to.

Bryce: [00:27:12] Go to the website. A lot of bonuses if you if you do become an investor. But all that information is available on the landing page. The deal terms everything you need to know. Company overview, highlight investment highlights the team, financials, everything you need to make an investment decision. And Lara, thank you so much for coming in and being one of the first to be involved in our series with equities. We do really appreciate it and love hearing from the stories and good luck with the rice. 

Larah: [00:27:39] Thank you. Thanks for having me. 

Alec: [00:27:41] All right. So was Larah Loutati, the co-founder of Vitable, fascinating company. We're going to take a quick break here and on the other side. We're going to speak to another founder, Joshua Brooks-Duncan. He is the co-founder of Farmer's Pick, and they're trying to work on the massive challenge of food waste in Australia. Welcome back. We are doing a new type of episode here at Equity Mates. We are hearing founders come on and pitch their companies. The companies that are listed on the equities platform. So people like us, retail investors, everyday investors can invest in these companies, which is exciting. It's making this whole world more accessible. Before the break, we heard from one founder, Larah Loutati, talking about her company Vitable. Now we have Joshua Brooks-Duncan talking about his company, Farmer's Pick.

Bryce: [00:28:46] So in the studio today, we have co-founder of Farmer's Pick, Joshua Brooks-Duncan, Welcome. 

Joshua: [00:28:51] Thank you. Thanks for having me. 

Bryce: [00:28:52] So Farmer's Pick. Give us the pitch. 

Joshua: [00:28:56] Yeah. So in Australia, 2.4 million tons of food never leaves the farm, or that equates to about 30%. And the reason for that is it doesn't make the sort of market beauty standards. So it's a little bit bendy, it's too big, it's too small, it's blemished, it's marked, and that food is left to rot on the farm. Or if it makes it out of the farm, it gets sent to landfill. If the supermarket knocks that back. So within Australia, that's a huge proportion of waste from our farms and also a huge contributor to greenhouse gases and climate change. So Farmer's Pick, we learn about that and sort of went, well, there's got to be something that we can do. So we set up a business that works really closely with those farms to take that produce, box it up and deliver it as a home delivery service either weekly or fortnightly to customers across the East Coast. 

Alec: [00:29:52] So I guess tell us a bit more about the story. Like when did you when did you first come across this problem? When did you found it? And what's been the journey from there? 

Joshua: [00:29:59] Yeah, so we came across this problem in COVID, said 2020. My co-founder Josh and I were at a local farmer's market walking around and some of the produce there was a little bit interesting, like, you know, there were some carrots with two legs. There's like big eggplants and you're like, I don't see this at the supermarket. So what's going on? And before that, we had no idea about this waste issue. So we did a lot of research and learn about that problem. And then, okay, something we can do. Let's just set up like a test business and say if there's a market for it. So we did that for a year working in corporate out of Josh's carport for a week. And then we were like, okay, we need a warehouse. Yeah, kind of built it from there into Now we've got our own facility in Melbourne and Brisbane and we're shipping thousands of boxes out a week. Well, speaking of thousands of boxes, what's been the growth story? Tell us about the revenue growth, some of the sort of specifics around where you've come from to today? Yeah. So first year we turned about 150. That was what we work our corporate jobs day, one day awake. And once we took the plunge and this is all as well, I fully commit to something and that's when you start to say the benefits are fully committed. And the following financial year we turn 2.7 million and then the fly that's just gone. We're hit 7.8 million, pretty decent price boxes. Is that roughly? So at the moment we're doing about 5000 wage. Yeah. So we started at like 70, went to 700 in a week and then kind of like scaled up from there. So I think yeah, we had 2 to 300% growth within like three months. 

Alec: [00:31:42] And the growth story, there's two sides to this growth story. There's the customer growth story and then I guess scaling up with farmers as well. So tell us about how you've managed that, brought more farmers on how they've responded to what you're doing and then the customer growth story as well. 

Joshua: [00:31:58] Yeah, So the farms like early key part of this for us. It's like one of the things that we say is a strength in our business is the investment in time and relationships we've built with the farms. Early days it was pretty hard, but it was like a kind of a foreign concept, like, why do you want that produce? But as we could have visited, took them all, they really came on board and now we've built up a supply chain that basically covers us for all our product lines and able to source in different locations throughout the year. So yeah, we've managed to build a really strong supply chain from the farms and they've really been receptive to it. I mean, it took a little while, but now, you know, we get phone calls every way from new farms wanting to come on board with us, which is great for us and also great for them because they now realise that there's another market that they can move this products in rather than just throwing it out. 

Alec: [00:32:51] So you mentioned briefly in the introduction the impact that food waste has on climate change. As food waste breaks down in landfill, it releases methane for people that aren't as familiar with that story. Give us a bit more colour on just the impact that food waste has on climate change. 

Joshua: [00:33:06] Yeah, so said 2.4 million tonnes gets wasted on farm. That's only a proportion of food waste in Australia. So 7.6 million tonnes is the total number of food waste within Australia. And just to put that into perspective, it's more than oil and gas production and flying combined. So it's a huge contributor to greenhouse gases within Australia. So the reason food waste contributes so much is when it breaks down, anaerobic lakes are in landfill or buried with that and it releases methane, which is more potent, like it's 30 times more potent than CO2. So for food to end up in landfill is kind of the worst place for it to be. It's great in a compost farm because it can break down aerobically and doesn't replace those gases. But it's even better if it's eaten and consumed as it was intended to. 

Bryce: [00:34:00] Ren and I used to work in Woolies and Coles, and while we were there, at least while I was at Woollies, they launched the odd bunch lines, which doesn't cover all fruit and veg and products, but it certainly covers some of your basics the two legged carrots and the odd shaped sort of potatoes. So how do you think about that in the competitive landscape and how is your customer different to, I guess, those that are going in and buying the odd bunch from Woollies and Coles?

Joshua: [00:34:27] Yeah, it's a great question and something that we kind of watch pretty closely with what the managers are doing. I think there's a couple of things to look at here. The first is they do offer. That, however, is not in the same format as they offer their regular fruit and veg. It's in one kilo bags, it's completely separate. And if you want to buy that produce, you have to buy a kilo or you've got to buy, you know, ten avocados or whatever it might be. So that's kind of the first element for it, offering it, but it's not in the fully convenient way that they offer their, let's call it perfect fruit and veg. The second bit is like there's sort of a disconnect because I'm always here to push this product because it costs the same to grow a perfect zucchini as it does an imperfect detainee. The return to farmers is less on the imperfect, it is on the perfect stuff. So if Cosmologies were to push this really hard, they'd be hurting their top line revenue, which would then hurt their bottom line profits on their fruit and veg line. So we do watch it, but it sounds like in some instances it doesn't make a whole lot of sense for them to really push, push this and become a big player in the better safe space. 

Alec: [00:35:34] I want to come back to the Coles and Woolies comparison because I think there's some interesting threads to draw on there. But I think before we get into that, we should just cover the basics of the customer. I go to farmerspick.com.au, and I want to sign up, talk me through the customer journey in particular, talk me through what I'm paying as a customer and compare that to what I'd be paying if I just rolled down to the local shops. 

Joshua: [00:35:59] Yeah, so we've set up a fully online experience so customers jump on, they sign up, it's a subscription service or weekly or fortnightly, and that will just ring you on, which are the cadence the customer chooses. We've got three sizes small, which is six kilos of solar couples, which is ten, and then our family which is 15 and they start at 36, 46 and 62. We sort of work out the pricing on our solo boxes between breakeven and about 10% cheaper than the supermarket. Our couples box is about 20% cheaper and then our families can be up to 40% just depending on the time of the year and what produce is available. So yeah, there's some real savings for consumers to be had by buying imperfect produce. So if you are couples, is that 40 bucks a week or it's when you order the box, like you have to look into a subscription. Yeah. So it is a subscription but there's no locking contracts. You know, we're not, not a gym. Yeah. If you want to pause or cancel, you can at any time.

Alec: [00:37:03] So about break-even to supermarkets. 20% cheaper, 40% cheaper. Yeah. When we think about the majors, they have incredibly efficient supply chains and still have incredibly razor thin margins. So talk us through the unit economics for your business. 

Joshua: [00:37:19] Yeah, so that was something that we sort of battle with when we set out like what is the most efficient way that we can do this and to make sure that we can pass on the cost savings to our customers. And we did that through a few steps. So the first is utilising the existing supply chain. So the farms send product into the markets every day. Today I will just tack our product onto what they're already sending. So we kind of use that supply chain. The second is really quick turnover of product. So whereas say something and within 48 hours it's out of our warehouse and in most cases delivered to the customer's door. So we try and cut down the steps in the supply chain compared to the supermarkets, and that helps us save cost. 

Alec: [00:38:01] But I do want to drill down on that because the challenge that all retailers face is the last mile like that, delivering to a customer's door is incredibly expensive. So how are you adding that part of the journey on and still, you know, making money make money?

Joshua: [00:38:16] Yeah. So the last mile we worked with a third party to help deliver our last mile. The reason for that is, one, it gives us like a really good geographic range. So we deliver pretty much all of regional Victoria, New South Wales and then Brisbane, Gold Coast, Sunshine Coast. So if we didn't do that ourselves, it would be a huge capital investment and, you know, fleet management and whatnot. So we tack on with a third party to do that. But it also means that we get the benefit. Because they're aggregating volume, the rates are cheaper. So, yeah, the more volume that we push through and that other parties push through, the cheaper rates that everyone gets and the cheaper it is to deliver. 

Alec: [00:38:57] So I've got one more question about the business and then let's turn to the raise and how that's going. Subscription businesses, it's all about, you know, getting the customer cheaply and then keeping them. So can you talk about some of those key metrics? Are customer acquisition cost and then your LTV, a long, long lifetime lifetime value? There we go. And also, what's your churn rate been on subscribers so far? 

Joshua: [00:39:22] Yeah, So that's an interesting point. I mean, all brands out trying to find customers. I think since COVID was pretty easy to find customers or everyone was on their phones, they had time, they wanted to try things. So I saw a really low catch through COVID. Since COVID, we've had to adjust a little bit with our marketing. And one thing that we say is really beneficial is brand building. So we've spent a lot of time to build the brand of Farmer's pick and to make it notable. And we say that through our like social followings, we've had a huge increase in the past 5 to 6 months, which has really helped drive traffic and awareness to go to our site and to our brand. So yeah, there's some areas in digital that are proving to be to return or low cost of acquisition. And I think with TikTok now coming through and that as an emerging channel, that's a space that we're looking at and continuing to play. And in terms of churn and lifetime value, I'd love to sit here and say we never lose a customer. So churn, we see churn kind of go in cycles with us. So our product is best suited for consistency and routine. So when that gets broken, we say customers channel pause or cancel, and that's usually around school holidays. So they break that routine, they go, Cool, we want to eat out and go on holidays and whatnot. And then the challenge for us is then getting them back into the flow and the routine of getting a farmer's pick box every week. So I think for us, that's a really good area of focus for the next 6 to 12 months of like, how do we do that really efficiently? And you know, there's some good learnings out there from the Hellofresh Molly, sparing you guys who have been hammering this of how they do it and, you know, really trying to leverage that and what they do. Nice with Josh let's. So you're looking to raise through equities and give us a sense of what you're trying to raise and what it will go towards. Yeah. So we completed a raise about 12 months ago and we got about 900,000 out of that rise that we've used to continue to expand our business in customer base, which we've done pretty successfully. We've implemented a new IT solution and we've bought capital equipment into the warehouse to improve labour and cost. And this rise really is about like expanding our national footprint. We've just launched in Brisbane, Ohio, and this rises really to fuel, that expansion as well as getting some key personnel. I think one thing that we've learnt over the journey is you can do a lot and you can do things pretty quickly, but resourcing right and really focusing on it is the key to success. So that's what this rise will also support us and K hires to help help us grow and help us do it sustainably. So we've got Johnny here from equities. Perhaps if you can just talk us through for those that are listening and interested, what, what are the specifics around it, how the audience can get involved? 

Johnny: [00:42:23] Sure. So it's very easy. Come to Equities.com. There is a deal page for Farmer's Pick which has an overview of everything to do with the offer. So you can see the terms, you can see the price per share, the valuation, all those sorts of things. You can very quickly create an account, go through digital ID sort of stuff like your 100 point ID test and you can invest. So any Aussie resident over the age of 18 can invest from $250. You become a shareholder. So you buying ordinary shares in the company much like you get on the ASX with a company? Only difference is they're not listed, so you buy shares and then you're along for the journey and until an exit event occurs, they lose their acquired or something else happens. Then you along for the journey and get to be part of the success. 

Bryce: [00:43:12] Awesome. So we'll include a link in the show notes to that landing page. It's pretty comprehensive. It's got all the information that you will need as a potential investor. It is worth pointing out that the round closes on the 14th of September at 10 p.m.. I think so. If you are interested, time is limited. I should preface that this is not going to be the only company that comes on to join the equity mates pitch session. So whatever we're going to call it. Yeah, Yeah. And one final question from me, Josh, I think to help people that are interested in your story, what will Farmer's pick look like in five years? 

Joshua: [00:43:46] In five years, we would be a national brand. I think we've always viewed this as a national problem. It's a huge problem and requires something that addresses it nationally. So we're going to be a national brand in five years. And the second bit of it is like as we mature in the fruit and veg space, there's an opportunity here to offer the option to buy other products which face similar issues such as long life milk. You know, if it's got six months on it, the supermarket won't take it because that's not long enough. So, you know, there's plenty of time to drink milk. So there's a heap of those things out there that we can start offering into our collection and then really start getting more share of wallet. So as a geographic expansion here in five years. And then there's also a product expansion here in five years. And I would say within that five years we have a pretty comprehensive product suite as well as the geographic range to service our customers. 

Bryce: [00:44:39] Nice. Thanks so much, Josh. We thoroughly enjoyed that. A reminder that there will be a link in the show notes for you to check out the landing page on equities for all the information. If you are interested in investing and going along on the journey with Josh and the team for Farmer's Picks. So Johnny, thank you very much. And Josh, thank you. 

Joshua: [00:44:56] All right. Thanks a lot. Thanks for having me. It's been great to chat.

Bryce: [00:44:59] Well, we want to thank both of our founders for coming into the den, into the fish tank, whatever you want to call it. But we do need your help. Equity Mates, we have a name for this segment or this episode. Please hit us up at contact at equitymates.com or on our Instagram page. 

Alec: [00:45:14] And if you agree with me that this episode should be called Fish Tank, make sure you submit that and I'll try and convince Bryce. 

Bryce: [00:45:21] Yeah, no good. But look, we really enjoyed having both of those founders in. Thank you, Josh. Thank you, Larah. And also thank you, Johnny. But we'll leave it there and we'll pick it up next week. 

Alec: [00:45:31] Sounds good.