HumanCo Raises $35M from Star Studded Investor Pool, Acquires Against the Grain
To continue on its quest to re-envision classic food and beverages as better-for-you offerings, holding company and investor HumanCo announced yesterday it had raised $35 million in funding. Alongside the raise, the group also announced it had acquired frozen pizza and bread producer, Against the Grain.
The round included existing Series A investors investor Brian Sheth and actor Scarlett Johansson. New investors included 8VC, JAZZ Venture Partners, author Dr. Mark Hyman, former Pepsi CEO Indra Nooyi, Vital Proteins founder Kurt Seidensticker, Thrive Market founder Nick Green, former Whole Foods Market CEO Walter Robb, investor Patrick O’Shaughnessy tennis players Venus Williams and Andy Roddick, models Brooklyn Decker and Cindy Crawford, restaurateur Rande Gerber and singer Shawn Mendes.
Founded by Ross Berman and Jason Karp (the founder of now-shuttered Hu Kitchen and Mondelez acquired Hu Products), HumanCo previously raised $15 million in January 2020. The current raise is a bridge round, with a subsequent, larger raise expected in 2022. Using a lens of improving human health, the company acquires or internally develops mission driven brands in food, beverage, personal care, household products, supplements or consumer health technologies.
To-date, the company has internally developed one brand, Snow Days, and made majority investments into two brands: non-dairy ice cream brand Coconut Bliss and non-dairy spreadable cheese brand Monty’s. The capital will be used for operating expenses associated with each of these businesses, funding the Against the Grain purchase, and launching or acquiring more brands, HumanCo chief commercial officer Will Lisman said.
Acquiring Against the Grain is “synergistic” for the company, Lisman added, as HumanCo seeks to go deeper into frozen. Currently Snow Days, which produces frozen pizza pockets, works with a co-packer for its manufacturing. Headquartered in Brattleboro, Vermont, Against the Grain self-manufactures its line of grain-free pizzas and breads, with a staff of 90. Shifting Snow Days production to Vermont is an option, Lisman said, but regardless, the two brands can likely share backend staff and sales teams, as well as work together on their respective supply chains.
“Against the Grain is perfectly positioned to build on its impeccable reputation, while preparing for its next stage of growth,” Karp said. “As a family-owned business that leads with transparency and sustainability, Against the Grain is a great fit for HumanCo that will further accelerate our mission and growth.”
Terms of the Against the Grain deal were not disclosed, but a press release noted that co-founders Nancy and Tom Cain will remain with the company.
As it has done with both Coconut Bliss and Monty’s, HumanCo expects to invest into the marketing and infrastructure for Against the Grain. A rebrand is likely, Lisman said, with the goal of both “carrying the past forward” but also allowing the frozen pizza brand to better compete on shelf. Founded in 2006, Against the Grain was initially developed in response to the gluten-free diet trend, but its emphasis on grain-free, which is now “having a moment,” Lisman said, attracted HumanCo.
Looking forward, the company declined to comment on when its next acquisition or brand launch would take place, but said it was “aggressively” pursuing a growth strategy. HumanCo also holds the SPAC HumanCo Acquisition Corp, which is currently trading on the NASDAQ. Citing SEC regulations, the company could not comment as to any development in identifying a target acquisition for the SPAC. Incubation, Karp said, will always take precedence over acquisition when the company identifies white space with no real competitors.
“With [Against the Grain], we found a great, family-owned grain-free and gluten-free brand that creates their delicious products using ingredients from local Vermont farms – so with a brand we already love, there was no need to build something from scratch,” he said. “We focus on incubation in areas where, like our organic grain-free pizza bites for Snow Days, there currently isn’t a healthy and delicious option that meets the HumanCo standards.”
Working with celebrities both as brand advocates (Scarlett Johansson is also Snow Days Creative Director) as well as investors has allowed the company to strategically build awareness, Karp said. Lisman added that unlike some other companies, which offer equity in exchange for promotion, HumanCo’s celebrity investors place capital into the business at the same terms as other investors, creating an authentic relationship.
“We [believe] that impactful cultural change can come from the influence of authentic celebrity excitement and engagement,” Karp said. “By aligning HumanCo with the right high-profile investors, whose personal values align with our mission and all put their own skin in the game, it brings us one step closer to creating a more mass and meaningful shift in the CPG industry to help everyone live healthier lives.”