News for November 25, 2020
Recent Transactions in the Nutrition and Health & Wellness Industry:
Kind sells to Mars Wrigley for a reported $5B
Three years after taking a minority stake in the brand, candy bar maker Mars acquired Kind North America. Terms of the deal weren’t disclosed, but media outlets reported Kind’s valuation at around $5 billion. Since 2017, Kind has expanded its lines of bars, granolas and other snacks into eight categories and more than 35 countries. It also debuted a line of frozen treat bars and refrigerated nut butter bars earlier this year. According to the companies, Kind founder Daniel Lubetzky remains a financial stakeholder and “will play a key role in future development and expansion of Kind.”
$7.9M series A will bring Farmstead’s delivery services to new cities
Four-year-old grocery delivery and software startup Farmstead (Burlingame, California) has completed a $7.9 million series A, bringing its total funding to $14.7 million. Like many other delivery companies, Farmstead’s business has boomed during 2020. But unlike Instacart and other high-profile delivery companies, its model uses the company’s own warehouse and drivers, backed by sophisticated proprietary software to keep operations efficient. Farmstead serves thousands of orders each day within 50 miles of its hub in San Francisco and plans to add several markets in the next year, including Charlotte and Raleigh-Durham, North Carolina. AidenLair Capital led the series A, with participation from Y Combinator, Gelt VC, Duro, Maple VC, Heron Rock, 19 York, Red Dog Capital and others.
Zero Egg cracks U.S. plant-based market with $5M series A
Powerplant Ventures led a $5 million funding round for Zero Egg (San Francisco, California), maker of a plant-based egg alternative for use by food manufacturers and foodservice providers. Founded in 2018, Zero Egg uses plant proteins including soy, potatoes, peas and chickpeas in its product, which has 15 calories per serving. With egg alternatives being one of the fastest-growing plant-based food categories, the company will use the funding to grow its brand and support new product launches in the coming year. Unovis Asset Management-New Crop Capital and Strauss Group also invested in the round.
R-Zero attracts $15M for a sanitization device for restaurants
Investors including DBL Partners, Bedrock Capital and HAX/SOSV have funneled $15 million into R-Zero (San Francisco, California) as it ramps up production of its germ-killing device. R-Zero started up during the pandemic to commercialize a device it says can kill over 99.9% of pathogens in the air and on surfaces — the coronavirus included — within a 5,000-square-foot space using UV-C technology. The device is also equipped with BLE (Bluetooth Low-Energy), LTE and GPS connectivity so that customers such as restaurants, coffee shops, schools and hotels can monitor its activity via smartphone.
Medical meal replacement brand Kate Farms closes $51M series B
Now in its fourth year of sustained growth, Kate Farms (Santa Barbara, California) has raised $51 million from Goldman Sachs, Kaiser Permanente Ventures and individual investors to step up its efforts to bring the plant-based revolution to healthcare. The brand’s organic, plant-based, tube-feeding formulas and shakes are made without allergens to help people with chronic illnesses get the nutrition they need. This year, it launched three new formulas, including a specialty formula for children. In a statement, Kate Farms said the series B funding will drive further innovation and expansion of the business.
Ahold Delhaize brings FreshDirect under its omnichannel umbrella
Ahold Delhaize (Zaandam, Netherlands)—the global retail company that operates Food Lion, Hannaford, Peapod and many other grocers—has taken an 80% stake in online fresh food grocer FreshDirect (New York City, New York). Private equity firm Centerbridge Partners acquired the other 20%. Terms of the deal weren’t disclosed. Ahold Delhaize CEO Frans Miller said the deal is the next step in the grocery giant’s omnichannel evolution, calling New York City one of the most important ecommerce food markets in the U.S. For FreshDirect, access to Ahold Delhaize’s buying power and scale could help it stay competitive in the fast-growing online grocery market. The company will keep its brand name and continue operating out of its New York City facility.
Keto brand HVMN lands $5.5M from famous investors
Former Zappos CEO Tony Hsieh, musician Zac Brown and football legend Joe Montana’s Liquid 2 Ventures were among backers in the latest funding round for Health Via Modern Nutrition (San Francisco, California). With an ever-growing line of keto food bars, MCT oil powders, collagen products and nootropic supplements, HVMN is bullish on the high-fat lifestyle trend, saying these are only the “early days” of keto. The new capital brings its total funding to $8.1 million and will go toward accelerating R&D for keto-focused nutrition technologies and products.
Canadian alt-meat maker Modern Meat adds snacks, takes first steps into U.S. market
Modern Meat (Vancouver, Canada), which markets plant-based alternatives to a variety of beef products, is adding snacks to its repertoire with the acquisition of vegan snack brands. Wholesale distributor JDW Distributors (Gardena, California) offloaded the brands, including Sunsations fruit jellies and Snacks from the Sun sunflower chips, for $450,000. With them, Modern Meat gets a foothold in the U.S. market, as both brands have a robust sales and distribution network in the U.S. and Canada.
Kerry boosts probiotic business with Bio-K Plus acquisition
Global flavor and nutrition brand Kerry (Tralee, Ireland) has bought Bio-K Plus (Quebec, Canada), which sells fermented beverages and capsules made with three science-backed strains of probiotics across North America. According to Kerry, the deal will expand its range of probiotics and its leadership position within the market. It previously acquired immune health brand Wellmune in 2015 and Ganeden in 2017. The companies did not disclose financial details of the deal.
MycoWorks brings in $45M to launch leather made from mushrooms
In its push to make fashion more sustainable, MycoWorks (San Francisco, California) is nearing the commercialization stage. It raised $45 million from WTT Investment Ltd., DCVC Bio, Valor Equity Partners, Humboldt Fund, Gruss & Co. and other investors, including several unnamed fashion brands. Singer John Legend and actress Natalie Portman also joined in the round. In conjunction with the round, MycoWorks opened a production plant where it will scale up manufacturing of its non-animal leather material made from mycelium. According to the brand, it has already made deals with some big fashion brands to use its material in shoes, wallets, belts and other leather goods.
Private equity firm Clearlake buys WellPet
Well Pet (Tewksbury, Massachusetts), a pioneer in the natural pet food and treat movement with brands such as Holistic Select and Sojos, was bought by Clearlake Capital Group (Santa Monica, California) from Berwind Corp. The financial details weren’t disclosed. “We believe the current market tailwinds, enduring increase in pet ownership and pet humanization dynamics offer a unique opportunity to meaningfully invest behind the company,” said Clearlake Managing Partner José E. Feliciano. According to WellPet, it has more than 1.2 million distribution points across the globe and will benefit from Clearlake’s operation insights and experience in the consumer sector. Other consumer companies in Clearlake’s portfolio include Chef’s Cut, Purple and Sensible Portions.
Terra Kaffe raises $4M for an espresso machine without the plastic waste
In the growing category of grind-and-brew or super automatic coffee, Terra Kaffe (Brooklyn, New York) wants to empower consumers to make cafe-style coffee at home without the waste that pod-based systems create. It’s just raised $4 million from The SeedLab to launch its TK-01 machine, which brews a full range of customized espresso drinks. Late last year, the company raised $750,000 in a seed round, bringing its total raised so far to just under $5 million.
Strava loads up with $110M for app improvements
Fitness tracking app Strava (San Francisco, California) has $110 million more to its name after a series F funding round led by TCV and Sequoia Capital, with additional investments from Dragoneer Investment Group, Madrone Capital Partners, Jackson Square Ventures and Go4it Capital. According to Strava, the round will allow it to build out new features and gain more new users. Currently it’s used by 70 million people in 195 countries.
Whole Earth Foods snaps up Swerve sweetener for $80M
Whole Earth Brands (Chicago, Illinois) has acquired Swerve (New Orleans, Louisiana) for $80 million, calling the brand’s ingredient a key growth platform for expanding Whole Earth’s foothold in the red-hot better-for-you sweetener space. Swerve markets a zero-calorie, keto-friendly, non-glycemic sugar alternative made from ingredients found in select fruits and starchy root vegetables. “The transaction fits perfectly with our M&A strategy to invest in and to accelerate the growth of our branded consumer packaged goods business in North America,” said Whole Earth Brands CEO Albert Manzone. The deal is expected to give Whole Earth, which also owns Pure Via, Equal and other brands, a 10% market share of sweeteners in North America.
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