PowerPlant Partners, a Los Angeles and San Francisco-based investment management firm, closed a $330 million fund.
With the final closing of PowerPlant Ventures III L.P. (PPV Fund III), the firm plans to expand its current focus on plant-based consumer food and beverage brands to incorporate consumer technology alongside service and enablement companies. Dan Gluck, PowerPlant co-managing partner, told dot.LA the firm still intends to back companies that center around human and planetary wellness.
“What we've announced is that as we grow as a firm, plant-based will always 100% be part of our DNA and be part of what we do,” Gluck said. “However, as we grow as a firm, we're seeing a lot more opportunities to broaden our scope of investments to focus on all businesses, consumer-facing as well as even backward in the supply chain, that are sustainable businesses that are furthering people and planetary health.”
As active investors, PPV Fund III plans to invest between $15 million and $40 million in each company. So far, it has invested in four. PowerPlant invested $40 million in a Series C round for Miyoko’s Creamery, which focuses on plant-based cheeses and butter. The other companies focus on beverages—Gluck said Santa Monica-based canned water company Liquid Death appeals to people who want the appearance of drinking an energy drink without the added sugar.
With their “death to plastic” and trendy aluminum cans which have made waves across social media platforms, Gluck said Liquid Death follows PowerPlant’s intent to better the planet. Additionally, he said Calgary-based Partake Brewing is rising in the non-alcoholic beer field as younger generations shift to healthier habits.
For its final investment, PowerPlant hand-crafted SYSTM Foods by acquiring and combining coffee company Chameleon Cold-Brew and beverage brand REBBL. PowerPlant was able to buy both companies at a discount, giving them the chance to create meaningful value, he said.
“There's a lot of companies out there,” he said. “We believe that there's a lot of synergies to be had by combining several brands. And, furthermore, part of that thesis was that there was going to be a period of market volatility where there was going to be a shakeout in the environment in the market where we would be able to acquire brands that are cheap.”
PowerPlant’s portfolio includes El Segundo-based Beyond Meat, a plant-based meat substitute producer, and Los Angeles-based Thrive Market, an organic food e-commerce retailer.
As PowerPlant plans to move into the consumer wellness space, the firm is moving away from investing in early-stage consumer businesses to funding growth-stage companies. All four PPV Fund III companies are growing quickly, he said, and the partners’ experience in scaling and exiting businesses can provide expertise for growing companies.
“What we know is that early stage consumer investing—it's tough, frankly, and we think there's just simply not enough moats for traditional consumer brands other than the brand itself,” he said. “We have really decided that the opportunity set from a financial perspective makes the most sense to be a bit more focused on growth.”
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SAVRpak's strawberries comparison detailing the moisture absorbing pads at work. Courtesy of SAVRpak