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Launched in 2012 and 2015, this is a combined ecommerce business selling supplements and, predominantly, matcha. There are 12 main consumable products with additional add-ons, accessories, bulk options, and B2B variations. The original supplement brand generates sales, but the bulk of the sales come from the matcha brand. The owners were able to use all of what they learned from the first brand and apply that toward the second brand, and they have had a lot of success in a strong category with 253% YoY SDE growth. The owners redesigned their matcha brand website in 2024 with a new style and Japanese tea powders that compete with the best brands in the health drink space. Over the last two years, they’ve grown their customer base, sales, and reputation 10x, which helped drive the strong YoY SDE growth. The brands are successful in the US, Canada, and the UK, which collectively account for 99% of sales, and sales are still growing in other countries as well. The owners work about 15 hours per week on the business and have two full-time and part-time contractors who help with miscellaneous tasks. The owners feel they have built the business to a place where someone can help manage the new level of growth, and someone who can take it to the next level would be the best fit for the business.
Why we like it
- Earnings Quality looks exceptional with 253% YoY SDE growth and $906K SDE on $2.6M revenue delivering a healthy 34% margin. The dual-brand structure provides revenue diversification while the matcha focus captures the premium health drink trend that commands higher margins than commodity supplements.
- Durability comes from operating in the consumables space where customers need regular replenishment, creating predictable recurring revenue streams. The 2024 website redesign and 10x growth in customer base over two years shows strong brand momentum that should sustain demand beyond typical ecom volatility.
- Market Tailwinds are massive as the global matcha market is experiencing explosive growth driven by health-conscious consumers seeking premium alternatives to coffee and energy drinks. The authentic Japanese positioning differentiates from commodity tea sellers while riding the wellness mega-trend that shows no signs of slowing.
- Operator Advantage is clear with current owners working just 15 hours per week, indicating significant automation and systemization already in place. An experienced operator could easily scale this foundation while the established international presence provides immediate expansion pathways without the typical market entry costs.
How to improve it
- Expand SKU depth in the matcha category by introducing seasonal flavors, different grades, and gift sets to increase average order value and purchase frequency. The premium positioning supports higher-margin product extensions that existing customers will readily adopt.
- Implement subscription and auto-delivery programs for both brands to convert one-time buyers into recurring revenue streams. Given the consumable nature of both products, this could easily add 30-40% to customer lifetime value within six months.
- Scale paid advertising across Google, Facebook, and Amazon using the proven conversion data from the recent 10x growth period. The strong unit economics and brand positioning support aggressive customer acquisition that current part-time operators likely can't execute.
- Develop wholesale and B2B channels by leveraging the existing bulk options into partnerships with cafes, wellness centers, and corporate wellness programs. The mentioned B2B variations suggest this groundwork already exists but needs focused sales execution.
- Launch Amazon FBA operations in all three primary markets to capture the massive search volume for matcha-related keywords. The brand strength and product quality should translate well to marketplace success with proper optimization.
- Expand internationally beyond the current markets, particularly into Australia and European markets where health trends typically follow US adoption patterns. The existing international shipping infrastructure makes geographic expansion relatively low-risk.
- Develop content marketing and influencer partnerships around matcha preparation, health benefits, and lifestyle integration. The premium positioning and authentic Japanese sourcing create natural content opportunities that can drive organic growth and reduce acquisition costs.
- Optimize email marketing and customer retention campaigns using the 10x customer growth data to identify high-value segments and personalize messaging. Most ecom brands underutilize their existing customer data for retention and upselling opportunities.
Diligence notes
- Verify the 253% YoY SDE growth is sustainable by examining monthly trends, seasonal patterns, and the specific drivers of recent acceleration. Ensure this isn't a temporary spike from inventory liquidation, pricing changes, or one-time marketing wins that won't repeat.
- Analyze customer acquisition costs, lifetime value, and cohort retention across both brands to understand the true unit economics driving profitability. The 10x customer growth claim needs validation through actual retention data and repeat purchase rates.
- Review supply chain dependencies, particularly for the Japanese matcha sourcing, including supplier relationships, inventory management, and potential disruption risks. Premium tea products can have complex international supply chains that create operational vulnerabilities.
- Examine the contractor relationships and operational processes to understand what knowledge transfer is required and whether the 15-hour commitment is truly sustainable without founder involvement. Many ecom businesses have hidden founder dependencies that aren't immediately apparent.
- Validate the international sales claims and understand any regulatory, tax, or compliance requirements across the US, Canada, and UK markets. Cross-border ecom can have complex legal and operational requirements that impact scalability.
- Review trademark and brand protection across all operating markets, especially given the competitive nature of the health drinks space and the value of the established brand equity. Ensure the Japanese tea sourcing claims are substantiated and legally defensible.