Waku Shares the Impact of the Business Equity Initiative

Amiel Vargas, CEO & President at Labor On Site and BEI Cohort V participant shares in a personal message the accomplishments the advisory services through the COVID-19 Response Support Team has made to his family business during these difficult period.

Childhood friends, Juan Giraldo, Chief Executive Officer, and Nico Estrella, Chief Operating Officer,
founded Waku in 2018, a prebiotic herbal tea company based on recipes from their home country
Ecuador. Their inspiration to start their company was an opportunity to have a positive impact for their
homeland and to unlock further demand for innovative products in the growing gut-health industry. According to Market.us, the global digestive health market is estimated at $104.4 billion by 2023. Therefore, Juan and Nico were ready for their next stage of growth when they enrolled in the Business Equity Initiative (BEI) program in 2022.

Challenges:

A couple of months after enrollment, a “perfect storm” of events occurred that required the BEI and Waku team to pivot from their original strategic goals and to focus on the following:

• Unexpected withdrawal of investors
• Delays with a major retail distributor
• Supply chain issues with contract packer in Ecuador

Solutions:

The BEI team shifted their attention to helping Juan and Nico to use their limited resources to focus on
actions to advance sales and go-to-market goals and to have enough funding to be able to continue to
operate. The BEI team supported Waku with the following solutions:

• Reworked cash flow model and financial projections.
• Provided guidance on opportunities to recapitalize and conserve cash.
• Managed communications with a lending partner, Business Equity Fund (BEF) at the Boston Foundation; and collaborated to secure short-term funding and a revised list of potential investors.
• Helped develop key short-term metrics to advance toward growth goals.
• Conducted interviews with peer companies that confirmed that the short-term hiring strategy and plans best fit Waku’s short-term growth goals.

Results and Impact:

Waku was able to successfully work through their challenges and meet the following accomplishments:

• Retired over $200K debt and restructured $140K to lessen cash impact.
• Obtained $400k in loans through “BEF” and individual investors with more. company-friendly terms to support short-term working capital requirements.
• Secured Wholefoods distribution contract for 22 northeast stores, then expanded into the entire region (55 stores) with near-term visibility to expand to over 60 stores.
• Increased revenues by 100% vs. the previous year.

“The Business Equity Initiative (BEI) made a world of a difference to my company because it was
customized to support Waku’s needs. Prior, I had enrolled in other classroom-type programs, but
nothing came close to the level of guidance that I received from my BEI strategist.”

Juan Giraldo, CEO of Waku