The Checkout: Serenity Kids, Gotham Greens and More Announce Investment Deals

Welcome to The Checkout: an express lane for the weekly news you need to know, always 10 items or less.

Serenity Kids Raises $3M to Expand Executive Team, Launch New Products

Baby food brand Serenity Kids raised $3 million in convertible notes from a mix of CPG founders and previous investors, the company announced today. The Texas-based brand plans to use the funding to grow its executive team, expand distribution and develop new products as it widens its offerings beyond baby food.

Investors in the round include Birch Benders co-founders Lizzi Ackerman and Matt LaCasse (who will serve as advisors for the brand), Ben Greenfield, co-founder of supplement brand Kion, Megha Barot and Matt Gaedke, co-founders of keto platform Keto Connect and wellness influencer Rachel Mansfield. Previous undisclosed investors also participated in the round, the brand said, which closed over the course of 2020.

For this round of funding, co-founder and president Joe Carr said the brand was seeking investors experienced in the CPG industry to “provide value and help navigate growth” as well as influencers to assist in marketing efforts.

The capital raise follows a $1.5 million round of funding led by Wild Ventures, which the brand closed last year, and brings its total financing to date to $6 million.

Serenity Kids, which was launched in 2016 by Joe Carr and his wife Serenity, offers a variety of vegetable and meat-based baby foods which are high in protein and healthy fats. The brand is sold in 3,000 retailers nationwide including Sprouts, Whole Foods and Kroger. The company said it is set to triple its revenue year over year, and attributes its recent growth to new retail distribution and high repurchase rates, the acquisition of new customers through direct-to-consumer business of its website and Amazon and its expansion into products geared toward toddlers last month.

To aid in this growth, the company recently added several new executive members to its team, including former Sun-Maid marketing VP Alan Cheung as its new VP of marketing and Kirk Lin, formerly director of finance at workplace food, beverage and events provider Crafty, as its new VP of finance.

Carr said the brand is in the process of “aging up” the baby food brand to coincide with the growth of his now two-year-old daughter and plans to launch new formats for children through the end of 2022. Since entering the baby food category four years ago — a space the couple thought lacked innovation — Carr said he and Serenity have come across many entrepreneurs looking to address the shortcomings in the baby food category.

“Our assumption of what parents wanted and how they wanted to feed their babies has definitely been proven right,” he said. “Parents are looking for premium ingredients and convenient options that are low in sugar and include meats and healthy fats.”

TerraCycle Closes $25M Funding Round to Grow Reusable CPG Platform Loop

Recycling company TerraCycle announced this week it had raised $25 million in a funding round to finance its reusable CPG packaging platform Loop, which expanded nationwide earlier this year. Investors in the round included Procter & Gamble, Nestlé, SUEZ, Aptar, Sky Ocean Ventures, ImpactAssets and Quadia.

Launched in 2019, the online platform sells over 400 food and beverage products as well as personal care and cleaning items in reusable jars and containers developed by the brands themselves. Food and beverage brands currently sold on the platform include spice brand Burlap & Barrel, granola maker Nature’s Path Organic and Tropicana orange juice.

Loop is “in the process of scaling up by entering new markets and industries,” the company said in an email, and will use the funds to hire additional team members. The capital will also fund the expansion of Loop’s cleaning systems for the reusable packaging used for all products sold on the platform, as well as sales and administrative costs.

TerraCycle CEO Tom Szaky said in a press release that due to the “limited amount of capital being raised,” it was essential to select “partners who firmly believe in Loop’s mission” to participate in the funding round.

“With this community of partners, Loop is the beginning of the end of disposability, making reuse a viable and accessible option for CPGs, retailers and consumers,” he said.

Antonia Wanner, head of environmental, social and governance strategy and deployment unit at Nestlé, which sells its Haagen-Dazs ice cream on the platform and is developing reusable packaging for its Chameleon Cold Brew, said in a press release that the investment is part of the company’s larger goal to make 100% of its packaging recyclable or reusable by 2025.

The platform expanded its reach to the 48 contiguous states as well as the United Kingdom this year and recently launched in retailer Carrefour in France. Next year, it will be available in-store at Walgreens and Kroger in the U.S. (though the company said an exact launch date has yet to be determined) along with Loblaw in Canada, Aeon in Japan and Woolworths in Australia. The company has also struck deals to offer fast food and beauty products in reusable packaging, forming partnerships with Ulta Beauty and Burger King in the U.S., Tim Hortons in Canada and McDonald’s in the U.K. The company will also be adding new products and brands to the Loop platform next year.

Gotham Greens Brings in $87M to Expand Operations, Distribution

Indoor agriculture company Gotham Greens has raised $87 million in new equity and debt capital, it announced this week. The raise includes $42 million from investors Manna Tree and The Silverman Group, along with existing investors, and $45 million in debt capital, bringing the company’s total financing to $130 million.

The company aims to use the funding to expand regional growing operations and distribution as well as on new product development, hoping to address the “increasing challenges facing centralized food supply chains,” which have emerged during the pandemic,” co-founder and CEO Viraj Puri said in a press release.

Gotham Greens operates a network of eight hydroponic greenhouses, producing salad greens and herbs sold in over 2,000 retailers as well as ecommerce sites. This year, the company widened its portfolio with a range of dressings, marinades and dips sold at Whole Foods and Sprouts. Despite the move into more CPG products, the company said it “remains focused” on producing produce items, though it plans to expand its CPG lines as well, Puri said in an email to NOSH.

The company has doubled its capacity over the past year with new greenhouses in Chicago, Providence, R.I., Baltimore and Denver and has several new products currently under development, according to Puri.

“We’re dedicated to changing how people think, feel and interact with their food while decreasing the environmental footprint of the traditional produce supply chain,” Puri said.

Brent Dever, co-founder and president of Manna Tree, also an investor in Vital Farms and Verde Farms, said the investment in Gotham Greens is aimed at securing a “stable food supply for the future” after COVID-19 “has revealed flaws in America’s food supply chain system, particularly in the produce category.”

My/Mo Mochi Secures Financing from Bregal Partners

My/Mo Mochi Ice Cream maker The Mochi Ice Cream Co. and majority owner Lakeview Capital announced the closing of financing from private equity firm Bregal Partners this week, forming a “strategic partnership” with the firm. Terms of the deal were not disclosed.

Lakeview Capital, a Michigan-based family office, acquired the frozen novelty company in January from private equity firm Century Park, who took a majority share of the company in 2015.

According to Mochi Ice Cream Co. CEO Craig Berger, the investment and partnership with Bregal will support the company’s goal to “build a leading global branded snack business and continue to disrupt through our product innovation the frozen novelty and snack markets.”

“Given [Bregal’s] focus and experience in scaling middle market food and branded products companies, we believe they are the right partners for us for this next growth phase of My/Mo Mochi,” Jake Freeman, director of investments for Lakeview Capital, said in a press release.

Bregal Partners’ current investment portfolio includes several seafood companies such as American Seafoods Group and Blue Harvest Fisheries, with past investments including Bumble Bee Foods and supermarket chain Earth Fare.

“We have built strong support and conviction behind our thesis of investing in companies producing internationally inspired foods and snacks in the U.S.,” said Charles Yoon, managing partner for Bregal Partners, in a press release. “As part of this thesis, we have followed My/Mo Mochi’s impressive growth story over the last several years and are thrilled to have the opportunity to partner with the company, its experienced management team and its owners and help continue the momentum behind this unique and innovative snack business.”

My/Mo Mochi is currently available in over 30,000 retailers across the natural, conventional and club channels.