Vejii Holdings CEO: We’re on the hunt for strategic M&A
Plant-based digital marketplace is weeks away from IPO and is looking for start-ups to complement its model
Plant-based online marketplace Vejii is on the hunt for plant-based brands to acquire and integrate into its platform and help grow via in-house marketing tools and national distribution connections.
Its upcoming listing on the Canadian Securities Exchange will enable the retailer to fast-track its M&A ambitions and leverage the high valuations being afforded to businesses in the sector right now.
Founder and CEO Kory Zelickson insists the company’s marketplace model enables his exec team to track and highlight well-performing brands that are in high-demand. From there, they can evaluate the best options for M&A.
“We can see when these companies are gaining traction and many are family-run businesses that are looking for capital,” Zelickson tells NutritionInvestor. “Our goal is to acquire these companies, bring them to the forefront and then find the growth capital for them to scale. We can provide these companies with access to national distribution channels and marketing and customer acquisition tools and skills,” he adds.
Zelickson offers up further insight into Vejii’s IPO and considers the company’s position in comparison to traditional retailers and global ecommerce giants.
How did the Vejii marketplace platform come about?
Vejii is a digital marketplace and an ecosystem for plant-based and sustainable living products. We are a Canadian company based here in BC but we operate in the US and recently launched the site in Canada.
The concept for Vejii was born out of the increasing demand and need for accessibility to plant-based and sustainable alternatives. It’s not designed as a traditional ecommerce model but rather as a marketplace. In the US we sell over 3000 plant-based and sustainable living products on the website, ranging from groceries and plant-based meats, dairy and seafood products, all the way through to cosmetics, health and wellness products and vitamins and supplements in sports nutrition.
We’re a really data-orientated company and when we started and launched with a few products, we’d already done our research in terms of consumer buying behaviour and trends. We quickly launched a platform called Vejii Express, which is like the Amazon Prime version of the website. Out of 3000 we took 450 of the highest velocity products, the most popular items – which at the time were mainly plant-based meat, dairy and seafood products – and we brought them into our own distribution centres so we could offer faster delivery.
What makes the platform really unique is that we have a vendor portal with over 170 unique and local brands, giving them the opportunity to gain exposure to a national audience. As a start-up ourselves we have to think about where the right geographies are for us to install distribution centres to offer faster delivery, although the product offering might be different in California compared to New York because of the local brands and preferences in the area. Right now, we sell across the country but it’s not very environmentally efficient for us to ship frozen Beyond Burgers from Texas to New York, so part of our strategy is to regionalise distribution in key geographies.
What will the next stages of your growth strategy entail?
We’re going go public on the Canadian Securities Exchange in approximately four to six weeks and we have already signed an agreement to acquire one of our top competitors in the US. We use our consumer data to understand which product categories and brands are trending on the platform and that informs our merchandising team for the future.
After going public, part of our strategy is to start rolling out a house of brands. We can look at brands that are already trending on our website and then actually go and acquire them with our share capital. The we can accelerate them within our own platform. If you’re familiar with the Live Kindly model, they were a community-based platform and then they started acquiring CPG brands at very high valuations. We have a similar model, except that we’re going to be publicly-listed. So that’s where we’re positioned in terms of our growth trajectory. Eventually we want Vejii to be a synonymous household name for sustainable and plant-based products.
How will your M&A strategy change when Vejii goes public and how will the listing aid that strategy?
We believe that we will be able to attain better valuations in public markets than through private equity or venture capital. Also, being public and being able to leverage share capital allows us to move more quickly in making strategic acquisitions. Companies in the space are attracting very good valuations right now.
We are gaining really early access to trending brands and categories that are already selling on our platform. We can see when they are gaining traction and many are family-run businesses that are looking for capital. Our goal is to acquire these companies, bring them to the forefront and then find the growth capital for them to scale. We can provide these companies with access to national distribution channels and marketing and customer acquisition tools and skills. It’s a very natural fit for us and it makes a lot of sense for us to start looking strategically at acquiring companies that that we can get behind.
The first acquisition that we have just signed an agreement for closed based on our receipt of listing approval. For the most part, we’re looking for predominantly share-based acquisitions versus cash. And then the cash that we raise in our funding rounds will support the budgets and growth trajectory for the companies that we acquire.
Both my business partner Darren and I have taken companies public before and the last company I was involved with was actually in the cannabis industry in Canada and it was a similar model to Vejii. I really feel that there’s a lot more sustained longevity within the plant-based industry because of consumers’ awareness around the environmental impact of the animal agriculture industry.
One thing that I find really interesting about the millennial age demographic of investors in this space is I really do believe this is the type of industry where your customers can also be your shareholders. The demographic of people that are interested in buying plant-based and environmental sustainability is also the same people that are wanting to invest in it.
What is your timeline for geographical expansion outside of North America?
In Q4 of this year or Q1 of 2022 we plan on launching in the UK. Expansion into Europe and then Australia will be before the end of next year.
How do you leverage your consumer data for personalisation?
We have the standard integrations and AI on the website that create user profiles to tag users based on their browsing history and their interests. There is a lot of opportunity to customise the user experience based on that, but I really think what’s unique about us is our ability to onboard brands and offer them promotions or programmes to accelerate growth. We have access to a wide range of celebrities and macro-influencers and we work with brands to produce unique content through our influencer network. We provide our brands with access to our resources for paid digital marketing, social media strategy and email marketing.
Do you see the Vejii platform filling the space of traditional retailers or are people using the platform to source unique and lesser-known plant-based alternatives?
Initially the concept was a platform where somebody can get all their plant-based products in one place that’s accessible for them. It was also geared towards somebody that is curious about the plant-based lifestyle. We’ve intentionally stayed away from the word vegan and we’ve avoided talking about animal rights because the platform is really designed to be inclusive for everybody. In today’s day and age, consumers have the choice to purchase products from online companies that are best aligned with their own ethics and values. I often get asked ‘why would somebody buy Beyond Burgers from Vejii versus Amazon?’ Well, because we’re better ethically aligned with our consumer base.
Who do you consider your main competitors to be?
In the US we have some small vegan boutique grocery stores that do not operate a true marketplace model but you can maybe consider them competitors of ours. Other competitors at a larger scale are companies like Thrive Market but they’re not specifically catered towards plant-based. There are competitors in vegan grocery retailers but I don’t feel that there’s a true competitor to us when it comes to the actual functionality of the marketplace model we’re trying to achieve.