Siddhi To Deploy New $135M Fund II For Growth Stage Investments

Siddhi Capital announced the closing of its second fund today at $135 million; the new vehicle marks the firm’s shift from startup to growth equity stage investments and a broadening beyond food and beverage. According to co-founder and managing partner Melissa Facchina, the firm has already deployed capital to two high-performing startups from its Fund I portfolio.

Fund II’s portfolio will center on high-growth food, beverage, consumer and food tech companies.

“Our Fund I was formed non-traditionally in a JV between Siddhi Ops and The Finn Family Office (former CEO of Credit Suisse USA),” Facchina explained. “As a result of how it was formed the fund inherited many of the family office investments and as a result went wide, not deep and across startup through $200 million in revenue. Fund II is focusing only on a subset of that.”

With the new investment vehicle, Siddhi has also shifted to a more “traditional structure” where it will put capital into a smaller number of names with larger checks going toward each. Check sizes for first investments from Fund II will range anywhere between $3 million to $12.5 million, but on average, total between $5 million to $10 million, explained Facchina. She highlighted that the firm would like the “lifetime value” of its best performing investments to be between $15 million and $20 million.

The firm has deployed the new fund while commitments came in and noted it has already put cash into a cohort of CPG brands including Magic Spoon, Momofuku, Mid-Day Squares, immi, Aura Bora, Liberation Labs and Plantible. According to Facchina, the firm strategically selects companies with an eye for those where it believes its in-house operating team can be most impactful as the entity scales up.

“We have many dozens of investors in Magic Spoon, and with a rare combination of deep industry expertise, ‘one-team’ mentality, and long-term strategic perspective, Siddhi is among the most impactful, value-add, and enjoyable to work with,” said Gabi Lewis, co-founder of Magic Spoon, in a press release.

Facchina said Siddhi aims to be two-thirds focused on CPG and one-third on food tech. As a strategic investor, the firm works to get a company’s costs under control including “fighting” for every point of margin, “extremely tight” operational efficiency and ensuring the manufacturing footprint can scale up alongside the business’s growth.

The investment vehicle’s platform includes in-house, back-end capabilities such as manufacturing, procurement, warehousing and logistics support.

“With Fund II and an eye toward building a generational asset management platform, we believed that to be holistic in both our diligence of companies and in our support of them we needed to add additional operational capabilities like senior sales expertise, DTC and strategy know-how, as such our in-house team expanded,” Facchina said.

As Facchina assesses the macro investment landscape, she believes other investors in the space need to come to the table with “practical asks” and realistic timelines to make a business operationally and profitably sound. She said many investors do not put enough consideration into homing in on fundamentals in a feasible time frame.

“As tough as it is to say, attrition needed to happen, and we’ve been seeing that occur over the last year – and likely the year ahead – because of a lack of capital being deployed,” Facchina said. “The best companies are still able to raise capital, but those who haven’t found their footing, don’t have enough consumer support, haven’t found a margin or cost profile that is supportive of business fundamentals are struggling to stay afloat. We see this as a challenging but necessary thing.”