Whole Kids enters voluntary administration after major deal falls through
Whole Kids, a food brand that makes healthy snacks for children, has entered voluntary administration, months after trying equity crowdfunding for a third time.
Prominent healthy snack brand Whole Kids is in voluntary administration, months after its parent company paused its third equity crowdfunding attempt on Birchal.
Whole Kids was founded by Monica Meldrum and James Meldrum in 2005 and manufactures a range of organic, additive-free and allergen-friendly snacks for families.
Over the course of its 18 years, the certified B Corp had raised approximately $2.4 million via equity crowdfunding and supplied its products to thousands of stores within Australia and abroad.
Whole Kids is owned by Nourish Foods Pty Ltd, which according to a notice published on the Australian Securities and Investments Commission (ASIC) insolvency register, entered voluntary administration on Tuesday, September 5.
Tim Heesh and Mark Everingham from TPH Advisory have been appointed as administrators for the company, and are now seeking urgent expressions of interest from potential buyers for the business.
In a statement provided to SmartCompany, the administrators said they intend to work with the company’s founders and key stakeholders to determine the next steps. SmartCompany understands all employee entitlements have been paid.
“The business has been placed into voluntary administration due to a lack of working capital required to support the business,” explained Heesh.
“The owners had been attempting to secure a financial investment partner over the past few months, however time has run out and their working capital requirement became urgent.
“It is not often that a well-established business with reputable and trusted brands like these comes along. The business represents an outstanding strategic opportunity for an investor to acquire a brand portfolio that should ultimately become household names and leaders in the FMCG healthy snack market,” he added.
From ‘disrupting’ snack foods to Asian expansion
Whole Kids was launched in 2005 with a clear goal to “really disrupt the category” of kids’ foods, which Monica and James Meldrum noticed were overly processed and full of additives, despite being marketed as ‘healthy’.
Both Monica and James left their corporate careers behind to launch the business, putting their house deposit on the line to fund the company, which by 2016, was on track to reach $6 million in annual turnover.
In 2020, Whole Kids successfully raised $1.2 million via equity crowdfunding platform Birchal, with prominent businesswomen, including Adore Beauty co-founder Kate Morris and Business Chicks’ Emma Isaacs, among those backing the company.
The company returned to Birchal again at the end of November 2021 to secure another $1.2 million from 486 investors, a result that was more than 200% over its minimum target.
At that time, Whole Kids was supplying its products to Australian supermarket giants Coles and Woolworths, as well as New Zealand’s Countdown supermarkets.
Meanwhile, earlier in 2021, the business had secured a partnership with Pinkfong, the Korean creators of YouTube sensation Baby Shark, to launch a range of Baby Shark-branded products.
Nourish Foods returned to Birchal again in mid-2023, seeking to raise more than $2 million to continue growing the Whole Kids range of products. Expressions of interest in that raise closed in June.
According to details published on its profile on Birchal, the company has recorded more than $23 million in revenue over the past five years and has seen particularly strong sales via Woolworths stores.
However, SmartCompany understands the company decided to pause the crowdfunding campaign amid talks with a potential investor in the grocery retail space.
In an email sent to investors and seen by SmartCompany, co-founder Monica Meldrum said that despite months of negotiations and due diligence, the deal did not proceed. Without the ability to restart the crowdfunding campaign, this led to the decision to appoint administrators.
“After 18 years of trading and leading the market with product innovation and driving forward the role of socially conscious business in Australia, we are devastated we have come to this point; not only personally, but also for the incredible support we have received from investors … our suppliers and our customers,” she said.
