Her words come amid growing concerns about an AI investment bubble.
Sinéad Crowther, founder of Soothing Solutions, has previously raised money and just signed a major distribution deal in the UK, but she is just one entrepreneur who turned to crowdfunding to help her company raise the capital it needs to capitalize on a huge opportunity.
The Meath-based company had previously raised €1.2 million and had plans to raise a further €5 million to support its international expansion and take advantage of UK growth opportunities.
However, Crowther has since scaled back those plans and opted for a crowdfunding route to raise money, despite previous success with more traditional routes.
Transactions in the €5 million to €10 million range saw a 74% decrease
“I don't in any way begrudge founders who have secured investment, but AI is a hot area right now and money is coming in faster for those companies at the moment,” she said.
Last month's Irish Venture Capital Association (IVCA) Venture Pulse report confirmed that funding opportunities for small and medium-sized businesses are tight.
Despite an overall increase in venture capital funding this year, there was a significant 74% decline in deals in the €5 million to €10 million range for which Soothing Solutions is seeking investment.
Previous reports have also highlighted a growing appetite for early-stage AI businesses within this category, meaning more difficult times for non-tech startups seeking funding.
Nevertheless, Krauser is confident that investors will come along to back her company.
“We have delivered ahead of schedule on all the milestones we set out in our original business plan to get to this point,” she said.
“We still have big ambitions for expansion, but as the year progressed we realized that €5 million was far more than we actually needed.
“So we put everything back together and now we're trying to raise $1 million.”
Soothing Solutions' Tonstix Honey Jelly Pops were designed by Krauser in 2017 specifically for children to soothe sore throats. Stocked in major pharmacy chains in Ireland and the UK (including 300 Boots stores).
The company has since also developed the Tonstix Travel Pop, which is now a permanent fixture on the planes of a German-based charter airline, and is in the process of negotiating distribution deals with other airlines.
Back in 2022, the company secured funding from food and drink-focused VC fund Reidsdale, veteran businessman Niall Fitzgerald, former Glen Dimplex boss Sean O'Driscoll and Irish companies.
They seem to be supporting AI technology platforms in the food sector as well.
But Crowther noticed that even previously enthusiastic investors were increasingly paying attention to AI during recent funding bids.
“They seem to be supporting more AI technology platforms in the food space as well. The focus seems to be shifting to technology rather than brands.”
“This is the first time we are participating in a crowdfunding platform. We are talking behind the scenes with investors and we are getting inquiries from investors. So, although it is a nervous time, we are looking forward,” she said.
Despite funding challenges, Soothing Solutions has made progress with its retail listings.
“The growth has been phenomenal. We are listed on every pharmacy in Ireland, we are listed on Holland & Barrett and Tesco, and we secured a listing on Supervalu in the new year.”
“In the UK, we are listed in 300 Boots stores and have secured a listing with Phoenix Medical, who distribute our products to 5,000 pharmacies in the UK. We will be getting there in a phased approach, aiming for 300 to start with.”
On Amazon UK, Tonstix is currently ranked #8 for sore throat and cough treatments.
“We are ready to use that data and apply it to EU and US strategies,” Crowther said. “That’s where the funds come into play.”
The company is also using grant aid for the research and development that has proven the effectiveness of Tonstix.
“We were able to grow human throat cells in the lab and demonstrated that our formulation reduces the production of inflammatory markers in throat cells,” she said.
