US investment firm AccelFoods has established a fund, AccelFoods Fund II, that will invest a total of US$20m in food start-ups.
Managing partner Lauren Jupiter told just-food the fund will invest in companies from the launch phase through to approximately $3m in revenue. “We will participate in Friends & Family financing rounds all the way through Series B financing rounds,” she revealed.
AccelFoods is looking for companies that operate in growth categories, are committed to building scale and offer a product that will engender customer loyalty, Jupiter explained. “We are focused on working with businesses willing and able to put in place the infrastructure and strategies necessary to scale quickly and efficiently. We have to feel confident that trial will lead to purchase and repeat purchase. We’re focusing on partnering with entrepreneurs who are driven, smart, passionate and, ultimately, good partners for AccelFoods. We also evaluate the market dynamics of the category: size, competition, retailer focus. What is it going to take for a product to differentiate itself?”
The cash was raised through investment from existing and new limited partners in the group.
Jupiter said that AccelFoods, which specialises in food sector investment, has seen growing interest from investors in the sector due to its defensive nature. “We’ve seen a lot of interest from investors who were previously focused on the other sectors coming into the food space. To date, the food industry has proven to be a bit more resilient in terms of economic ups and downs,” she suggested.
Start-ups are also becoming more refined in their approach, Jupiter continued. “We’ve also seen both an increased sophistication of entrepreneurs coming into the food space as well as a genuine focus from the strategics on earlier stage companies looking for acquisitions and partnerships as a source of innovation.”
Accel Foods existing portfolio companies include JJS Sweets, which manufactures Cocomels and other confectionery; Cows Gone, a dairy-free ice cream maker; and organic snack maker Good Boy Organics.