Good morning, Broadsheet readers! Lina Khan’s antitrust efforts hit a roadblock, Taylor Swift proves to be too big for Ticketmaster—again, and the infant formula shortage led a startup to make a major acquisition. Have a wonderful Wednesday.
– Joining forces. Over the past two years, the infant formula startup Bobbie has grown to reach $100 million in revenue, feed 300,000 babies, and serve more than 5% of the non-WIC U.S. formula market.
The company, which sells a $26 European-style formula direct-to-consumer in the U.S. and at retailers including Target, was rocked by last year’s formula shortage. Cofounder and CEO Laura Modi says she started thinking about what Bobbie could do to strengthen its position in the marketplace—not just for its own sake, but for the sake of parents who found they couldn’t depend only on the biggest players in the industry, like Mead Johnson and Abbott.
Bobbie is now acquiring Nature’s One, a 26-year-old formula brand, Fortune is the first to report. The startup raised a $70 million Series C round, led by PowerPlant Partners, to be able to close the acquisition. (The companies declined to disclose the exact size of the acquisition.) Bobbie has now raised $142 million in total funding.
Founded by Jay Highman, Nature’s One has been around for two decades longer than its new owner as a seller of toddler formula and recently began preparing to offer infant formula. (Bobbie was founded in 2018, went through an FDA recall in 2019, and relaunched its product in 2021.) Nature’s One also has another advantage: its own Ohio manufacturing plant. (Bobbie relies on Perrigo as its manufacturer.) “Bobbie has captured the hearts and minds of the next generation of parents. Nature’s One has the operational prowess to get manufacturing up and running,” says Modi. “And frankly, you need both to win.”
Manufacturing is especially important after last year’s formula shortage. Halted production at one Abbott plant in Michigan started a chain of events that stripped store shelves of formula for weeks. “This industry is not resilient,” says Modi. “We’re relying on too few manufacturers to make too few products. The only way to ensure we don’t go through another shortage is to have redundancy and resiliency.”
The 70 employees at Nature’s One will join Bobbie’s team of 106; Highman will stay on as executive director of the brand. He and Modi both founded their brands after personal experiences feeding their children; Modi had trouble breastfeeding and Highman’s son had cystic fibrosis and specific nutritional needs as a result. Bobbie’s messaging appealed to Highman as he considered selling his company. The startup resonates with ingredient-conscious millennial parents and has attempted to combat stigmas around formula through efforts like a recent Target campaign about “combo feeding.”
With this acquisition, Modi believes Bobbie can grow to serve 15% of the non-WIC market. She’s not setting her sights higher than that number because of her experience during the shortage. “The industry desperately needs to be diversified. It needs more competition,” Modi says. “There’s a certain size you should be getting to, and then you should be celebrating everyone else who’s taking slices of it too.”
Emma Hinchliffe
emma.hinchliffe@fortune.com
@_emmahinchliffe
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ALSO IN THE HEADLINES
- Anti-antitrust. A federal judge yesterday rejected the Federal Trade Commission's attempt to block the merger of Microsoft and Activision Blizzard. The decision highlights the challenge facing FTC commissioner Lina Khan as she attempts to enact greater antitrust enforcement in tech. CNBC
- Backlash in China. On her trip to China, Treasury Secretary Janet Yellen met with a group of female Chinese economists and entrepreneurs. Those women have now been accused by online nationalists of betraying their country for meeting with a senior U.S. official. Fortune
- We were in Paris? Ticketmaster still can't handle Taylor Swift. The platform stopped the sale of tickets for Swift's six Eras Tour shows in France, blaming a "third-party provider" for the disruption. Wall Street Journal
- Travel plans. Gwendoline Cazenave took over in October as CEO of Eurostar, the European rail transit company. She's leading the business through a turnaround as it attempts to recover from the pandemic's drop in travel. Financial Times
MOVERS AND SHAKERS: Angela Jaskolski joins Madison Reed as chief revenue officer. Shelly O’Neill Stoneman will become senior vice president of government affairs at Lockheed Martin. Ilyse Hogue, former NARAL Pro-Choice America president, joins Rewiring America as senior adviser. Christina Wootton was named chief partnerships officer at Roblox. Evelyn Krasnow joined Highland Electric Fleets as VP of marketing.
IN CASE YOU MISSED IT
- Inspirational season. Brittney Griner's return to the WNBA court is inspiring to other Americans who have been detained abroad. They say that Griner shows that "your life can get back to normal" even after such a traumatic experience. The Athletic
- Prison time. Theranos founder Elizabeth Holmes's prison sentence was reduced by two years, from 11 years and three months to nine years and seven months. The Federal Bureau of Prisons updated information about Holmes's sentence online but did not clarify why the change was made. Fortune
- Gimme more. Britney Spears' forthcoming memoir The Woman in Me is set to be released on Oct. 24, Simon & Schuster imprint Gallery Books announced yesterday. The memoir "illuminates the enduring power of music and love—and the importance of a woman telling her own story, on her own terms," the publisher says. People
ON MY RADAR
Men are lost. Here's a map out of the wilderness Washington Post
Inside the reckoning facing Christian mommy bloggers Bustle
Supreme Court Justice Sotomayor’s staff prodded colleges and libraries to buy her books Associated Press
PARTING WORDS
"Everything will change, over and over again. But every day you're surviving and finding beauty, even through the hard things."
—Writer Jenny Han, who premieres the second season of her show The Summer I Turned Pretty this week, on why she tells coming-of-age stories
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