Spudsy Secures $3.3M Funding for Sweet Potato Snacks

Spudsy Secures $3.3 Million in Series A Funding

Spudsy, a company specializing in plant-based snacks created from upcycled imperfect sweet potatoes, announced Thursday the completion of a $3.3 million Series A funding round. The investment was spearheaded by KarpReilly and Stage 1 Fund.

Funding History and Company Growth

This new capital brings the total funding raised by Spudsy to $6.5 million since its inception three years ago, as stated by Ashley Rogers, founder and CEO, in an interview with TechCrunch.

Rogers emphasized the value of the investors’ experience, noting their extensive portfolios within the food and beverage sector. She explained that their guidance has been instrumental in providing oversight and facilitating connections with key partners like Amazon and direct-to-consumer agencies.

Founder's Background and Market Opportunity

Prior to founding Spudsy, Rogers spent seven years in the food industry and previously established Buff Bake, a protein cookie brand.

She divested her ownership stake in Buff Bake to her partners and subsequently launched Spudsy, recognizing a gap in the market for a brand centered around sweet potatoes. This was in contrast to competitors focusing on other vegetable-based snacks.

“We initially concentrated on puff snacks, capitalizing on their current popularity and identifying a lack of competition in that specific area,” she explained.

Product Line Expansion

Beyond the original puff snacks, available in five distinct flavors, Spudsy has expanded its product range. Over the past year, the company introduced a sweet potato “fry” – resembling a straw in shape – offered in four different flavors.

Addressing Food Waste

Spudsy estimates that approximately 150 million pounds of sweet potatoes are discarded annually due to cosmetic imperfections such as shape, size, and color. The company is actively collaborating with a farm in North Carolina to utilize these previously wasted potatoes.

Rogers stated that Spudsy is on course to salvage 1 million of these “flawed” sweet potatoes by the close of 2021.

Strategic Market Entry and Future Vision

The company strategically entered the market through the salted snack aisle, a high-performing category. According to Statista, salty snacks generated $27 billion in sales within the United States in 2017.

Rogers projects that this figure has increased to between $30 and $36 billion over the subsequent four years.

However, Rogers envisions Spudsy evolving into a broader “platform brand” with a presence across multiple grocery store sections. This includes potential expansion into frozen foods, bread, tortillas, and other carbohydrate-based products.

Currently, Spudsy products are available at retailers including Whole Foods, Kroger, and Sam’s Club.

Capital Allocation and Growth Plans

Having completed significant executive team recruitment last year, Spudsy will allocate a portion of the new funding towards hiring initiatives.

The majority of the capital, however, will be directed towards fulfilling the numerous inquiries from national retailers and investing in in-store product demonstrations.

With the launch of the fries product line two months ago, the company’s primary focus is currently on its promotion. Rogers is also exploring opportunities in direct-to-consumer sales and through the Amazon platform.

“While we’ve experimented with DTC, it hasn’t been a central focus. We plan to prioritize its development in the coming year,” she added.