Building a New Niche Brand from New Hampshire: Yogibo CEO Eyal Levy (Part 3)

Sramana Mitra: Now we’re talking 2010. What is the split in the business? How much are you selling through retail? How much are you selling online?

Eyal Levy: Back then, the online business was about 20%.

Sramana Mitra: What happens in 2011?

Eyal Levy: We saw that the model of the store worked. In October of 2010, we opened the second store.

Sramana Mitra: Where was that?

Eyal Levy: That was also outside Boston. A year later, we opened three more stores and did more events. We expanded to other territories. In 2011, we started to do more events in Connecticut and closer to New York city.

Sramana Mitra: How did the split evolve between online and retail?

Eyal Levy: The split remained the same. At that point, the percentage of online decreased a little bit to 15%, but it has more than doubled itself because the volume went up.

Sramana Mitra: How much did you do in 2011 in total?

Eyal Levy: In 2010 after opening the store in the middle of the year, sales went up to half a million dollars. In 2011, we ended up with $2 million.

Sramana Mitra: Talk about inventory financing. Were you financing the inventory with your own money? Did you go to banks to get some inventory financing?

Eyal Levy: In the beginning, I started the company with all my savings. In 2010 right before we opened the first store, we needed more money to finance both inventory and the capital investment to start the store. We raised seed money.

Sramana Mitra: From where?

Eyal Levy: From a friend.

Sramana Mitra: How much did you raise?

Eyal Levy: It was a couple of hundred thousand dollars. Since year two, we were profitable. We put all the profit back in the business for the working capital. At this point, banks don’t support smaller companies until they see several years of profit, so we used different financing options.

One of them was UPS Capital. They have a program where they finance the inventory as long as we use their freight forwarding services. When we import goods, they finance those goods for two months. That gave us more leverage for working capital. This is basically how we grew.

Sramana Mitra: You didn’t do any bank financing. It seems like this is a company that could have easily got bank financing once you hit your stride.

Eyal Levy: The first time in 2012, we got a very little line of credit. This was when we started to get financing. We had a good year in 2011. It was all against inventory.

Sramana Mitra: In terms of strategic moves, what was the next major move that you made that helped you grow the business further?

Eyal Levy: We invested more online. From the little website that I built, we developed a much better website. We started to invest more in online marketing. That happened around 2012. We started to do more Google AdWords and a lot of social media. We did social media since the beginning but we did advertising through social media in 2012. That gave us a boost in online.

The next strategic move that we did was partnering with other online resellers that sold our brand like Amazon and Wayfair. Having a third-party reseller helped us. The next big strategic move happened in 2014 when we started with international distribution. The first country that we started with was Japan.

This segment is part 3 in the series : Building a New Niche Brand from New Hampshire: Yogibo CEO Eyal Levy
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