CPG Experts Team Up to Launch $312M Fund Humble Growth
Nick Giannuzzi, founder & partner of law firm Giannuzzi Lewendon, RxBar founder Peter Rahal and Orgain founder Andrew Abraham today announced the close of Humble Growth, which is debuting its first fund at $312 million.
Not-So-Humble Beginnings
The three general partners account for roughly 20% of the capital in the fund, according to Rahal. Other limited partners include Nestlé Health Science; Verlinvest; Mike Repole, co-Founder of BODYARMOR Super Drink; Gary Hirshberg, founder & CEO of Stonyfield Farm; Mariah Chase, former CEO of Eloquii; Natalia Tovar, founder and former Co-CEO of Bocce’s Bakery; and Ryan Lewendon.
Humble Growth’s first close was $220 million from friends and family, with additional capital picked up from investors including Verlinvest, Nestle and Repole in a second close.
The fund is set to write checks of $10 to $40 million to companies with $20 million and $100 million in trailing revenue. Targeted investments will produce fast moving consumer goods, such as pet, food, supplements, health, apparel, beverage and beauty; or, as Rahal refers to them companies that provide “the enablement of consumer goods,” and make the industry “faster, cheaper or tastier,” such as ecommerce platforms, fulfillment centers or ingredient suppliers. Ideally, Rahal said, Humble Growth will be part of a brand’s last fundraising campaign.
To-date, Humble Growth has made four investments, which Rahal declined to name. He did reveal the group has invested $10 million and $20 million, respectively, in two vitamin and supplements companies, $15 million in an ecommerce related company and then $25 million in a producer of raw materials.
Shifting focus to Humble Growth, Rahal has shuttered his family office Litani Ventures, while Gianuzzi is closing out his Enlightened Capital, which over the course of two funds invested in Essenti, Spindrift and Vital Proteins. If deals come up that Giannuzzi, Rahal or Abraham have previously invested in, the company has a process in place to avoid any conflicts of interest.
Of the three partners, Giannuzzi has probably made the biggest change, last year stepping away from his law firm to focus on Humble Growth, calling the fund “the culmination of my career and all the people I’ve met over the years.”
What’s the Thesis?
While Rahal had previously told NOSH his family office Litani Ventures would shy away from investing in food and beverage due to the risk involved, Rahal said he now realizes that the risk came laregely from investing in early stage companies. Placing capital in proven brands however, he said, is a winning direction, a sentiment he said his other two co-founders share as well.
“It turns out investing in earlier stage CPG makes no sense…there’s not enough billion dollar outcomes to offset all the losses,” Rahal said of his lesson. “But what makes sense is the growth round when there’s enough data to understand that there’s product market fit, and you can really forecast out where the business is going to go, and who’s going to likely want to buy it.”
The presence of a robust and battle-tested group of limited partners, Gianuzzi said, means Humble Growth is bringing much more than just capital to the table.
“The industry is filled with these resilient people, but it’s also filled with these people that have incredible gratitude. The other thing is a lot of them are young, there’s a lot of people who are 40, 50 years old, who have made so much money,” Giannuzzi said. “It doesn’t make sense for them to take a job and make $200,000 a year, but they have so much know-how and so much insight, and they’re dying to help the next person.”
Rahal, Gianuzzi and Abrams won’t be at it alone, though: they’re joined by an investment team of eight. While the three managing partners approach deals from the “entrepreneur archetype” and are “less organized, more creative,” Rahal said, the rest of the team is “classically trained” to provide a balance of perspectives, with time spent at other firms including San Francisco Equity Partners, VMG and ACG.
Meanwhile, Verlinvest and Nestlé, which typically write much larger check sizes, are using Humble Growth as a means of keeping tabs on earlier stage companies,
“At Verlinvest, we’re committed to backing founders and businesses that are driving consumer revolutions forward while having a positive impact,” said Clément Pointillart, Managing Director at Verlinvest in a press release. “The combination of Andrew, Nick and Peter creates a unique advantage with their decades of market experience and expertise. We are pleased to support the team in backing earlier-stage companies on their growth journeys.”
