A new investment fund backed by a roster of food-industry veterans is seeking to partner with entrepreneurs seeking to grow their purpose-driven CPG brands.
New York-based Humble Growth was founded by consumer products lawyer Nick Giannuzzi, RXBAR founder Peter Rahal, and Orgain founder and CEO Andrew Abraham. It has amassed $312 million from several limited partners with extensive industry experience, including Gary Hirshberg, founder and CEO of Stonefield Farm; Mike Repole, cofounder of BODYARMOR Super Drink, and Sean Lang, founder of Ainsworth Pet Nutrition.
Other backers include Nestlé Health Science and Verlinvest, which has invested in companies that include Oatly, Via Coco, Tony’s Chocolonely, and Chewy.com.
Giannuzzi, of law firm Giannuzzi Lewendon, is also an industry veteran who has worked on more than 500 financing transactions, including the acquisition of RXBAR by Kellogg, Chameleon Cold Brew by Nestle, Sir Kensington by Unilever, and Siggi’s by Lactalis. He has also assisted in the financing of companies such as REBBL, Spindrift, Vital Proteins, Koia, Owl’s Brew, and Gem&Bolt.
Humble Growth is seeking to invest in mission-driven companies that have reached $20 million or more in annual sales, are are seeking both financing and advice as they seek to expand. Although the fund’s managers are willing to speak with smaller brands, they would prefer to invest in companies that already have a proven track record, Giannuzzi told SFA News Daily.
“We’re not typical venture fund writing $2 million or $5 million checks,” he said. “We are writing larger checks, when the companies are a little further developed.”
Humble Growth is eyeing investments of between $10 million and $40 million, he said, and offering the expertise of its veteran partners along with it.
“We want to be a resource, so when you are unsure, you’ve got one phone call,” Giannuzzi said. “Should I move into Target now? Should I do some kind of incentive? Should I do a deal with a celebrity? Is it the right time to go into Costco? Should I build an organic brand, or just a clean, healthy brand?
“We have all these resources, in the form of people who have done all these things, and tried and failed and succeeded,” he said. “We want to invest in companies that have a great management team, but that want help avoiding some of the bumps and bruises along the way. That’s where we think we can excel.”
The fund is seeking to invest in a broad range of companies, but its focus is around growing areas such as health and wellness, longevity, and sustainability. The vitamin and supplement space is particularly ripe for evolution and growth, Giannuzzi said.
Humble Growth seeks to take a minority interest in the companies it invests in—anywhere from about 15 percent to 40 percent ownership—with an eye on selling its stake in about five years, depending on the specific circumstances. Unlike many private equity investment firms, Giannuzzi said, the new fund will not seek to burden the companies it invests in with extensive controls and restrictions.
“Our demands when we invest in a company are pretty light,” he said. “We hope management teams listen to us, but we don’t want a big stick to control founders and management teams. We want to entice them to listen to us with a carrot, and the carrot we offer is the knowledge and vast experience of our team.”
The fund has already invested about $40 million in three companies, which Giannuzzi said would be identified sometime in the future.
“We hope that this is the first fund of many,” he said. “We hope that we improve the ecosystem as a whole, as a new funding source, and we hope it will result in great returns for our [limited partners], and that it will result in great partnerships with the management teams that we back.”
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