Art of the Deo: American Provenance Raises $500K to Go National
American Provenance, a Blue Mounds, WI-based startup that sells handmade deodorants, after-shave, and other grooming products, has raised a $500,000 round of equity funding to help fuel its growth, says founder and CEO Kyle LaFond.
The company will use some of the proceeds from the seed funding round to create digital marketing campaigns for its products; they’re sold in all 50 states by more than 700 retailers, as well as directly to consumers online through American Provenance’s website and Amazon (NASDAQ: AMZN), LaFond says. Those campaigns will likely appear on social networks such as Facebook (NASDAQ: FB) and Instagram, as well as on YouTube and Web pages that display Google ads and search results, he says.
“I plan to spend about $250,000 on digital marketing in the next year,” LaFond says.
American Provenance’s seed funding round was led by the Winnebago Seed Fund, one of the “recipient” funds created under the state’s public-private Badger Fund of Funds program. Winnebago provided three-quarters of the $500,000 total, with the rest coming from Chicago-based Tru Fragrance & Beauty, a marketer of perfumes and colognes, LaFond says.
The investment valued American Provenance at $2.5 million, says LaFond, who founded the company in 2015.
Deodorant—varieties for both men and women—is the startup’s most popular product, but it also makes and sells beard and lip balm, pomade, body spray, candles, and other goods made from oils and butters.
The ingredients in American Provenance’s products include almond, hazelnut, coconut, beeswax, shea butter, and arrowroot, a starch made from tropical plants that the company claims helps absorb sweat.
With the exception of lip balms, which American Provenance works with a contract manufacturer in Iowa to produce, LaFond says his startup makes all of the products it sells by hand in a converted machine shop on his grandfather’s farm in southern Wisconsin. That means manually pouring out and mixing ingredients, many times in two-quart Mason jars, and then capping, labeling, and packaging finished products together, he says.
LaFond says that even with the new funding at his company’s disposal, it’s unlikely to try to automate major parts of its production processes. “The plan is to continue making things the way we are now,” LaFond says.
American Provenance’s revenues eclipsed $315,000 in 2017, and the startup is projecting more than $700,000 in total sales this year.
The retailers that sell the company’s wares include pharmacies, grocery chains like HyVee and Whole Foods, as well as yoga and barre exercise studios.
LaFond and the other seven members of American Provenance’s team are betting that consumers will be willing to pay a premium for sustainably sourced ingredients and a methodical approach to production. A regular sized stick of lemongrass deodorant costs $7.75, for example. (The travel size will only set you back $3, meanwhile.)
LaFond points to Native Deodorant, a San Francisco-based startup that reportedly charges $12 per stick, as evidence that some Americans don’t mind ponying up for eco-friendly toiletries. (American Provenance says its products are free of metals, petrochemicals, and preservatives.) In November, Native Deodorant was sold to Procter & Gamble (NYSE: PG) for $100 million in cash.
Earlier this year, American Provenance graduated from gBETA, a seven-week, equity-free program run by the Wisconsin-based startup accelerator Gener8tor. LaFond says that participating in the program helped him fine-tune the pitch he made to venture capital firms and other audiences this spring when American Provenance was in the process of raising its seed funding round.
“It helped me go out and have confidence when I got in front of investors, and make some things happen,” he says.