PODCAST: Three industry titans launch ‘revolutionary’ $312m growth equity fund to scale up radical better-for-you startups
Consumer lawyer Nick Giannuzzi has joined forces with RXBAR founder Peter Rahal and Orgain founder Dr Andrew Abraham to revolutionise the conventional PE model by bringing their distinctive expertise and value in CPG (consumer packaged goods) to the table.
Peter Rahal is the founder of fast-growing nutrition bar brand RXBar, acquired by Kellogg Company as part of its $600m acquisition of Chicago Bar Co in 2017. RXBar topped $2m in sales in its first year of business (2014) and surpassed the $200m mark in sales in the first year under Kellogg’s ownership.
Dr Andrew Abraham is the founder of Orgain, a leader in plant-based nutrition, which sold a majority stake to Nestlé Health Science in 2022. The Swiss conglomerate is expected to finalise full ownership of Orgain later this year.
Nick Giannuzzi is founder and partner of Giannuzzi Lewendon, a multi-city US law firm that helps brands to navigate the legal and business trials in becoming a category leader. With over 25 years of experience, Giannuzzi is well known not only for his knowledge of the law but also for the zealousness for his clients, which include VitaminWater, VitaCoco, Siggi’s, Peeled Snacks and Happy Baby, among others.
Apart from their capital to scale up their investments’ operations, the trio are focused on spreading their wealth of industry knowledge and forging true partnerships with fellow purpose-driven founders and entrepreneurs.
The New York-based fund has secured an inaugural fund of $312m, backed by an impressive roster of investors that includes Nestlé Health Science, Verlinvest (which has backed Oatly, Vita Coco, Tony’s Chocolonely and Chewy), Mike Repole (cofounder of Bodyarmor Super Drink), Gary Hirshberg (founder and CEO of Stonyfield Farm), Paulo Lima (cofounder of IT Cosmetics) and Sean Lang (founder of Ainsworth Pet Nutrition).
“We’re honoured to officially launch Humble Growth and work closely with founders to propel their brands to new heights,” said Dr Abraham.
“We’ve built, scaled and exited our own brands and understand the ongoing challenges founders face when growing their brands firsthand. With Humble Growth, we’re taking that knowledge and working alongside founders to support their mission and bring an empathetic perspective to scaling operations.”
“As we are exclusively focused on providing capital and strategic partnership to consumer brands, we have well-defined investment criteria and competitive advantages throughout the lifecycle of an investment. The recency of operating experience by our founding partners allows for meaningful and tactical insights into growth and operational levers for our brands,” said the company in a statement.
Evolutionary and revolutionary better products
The fund will be dedicated to propelling the disruptive success of early-stage companies - mainly based in the US - that are changing the way consumers eat, drink, feel and live.
“What we’re really looking for is innovation and often it’s innovation related to health, wellness, longevity and so on,” Giannuzzi told Bakery&Snacks.
“Over the past 20 years of my career, [there] certainly has been an evolution towards better-for-you. That is where my two partners excelled; that’s where most of our LP made their money and have their successes - in either evolutionarily or revolutionarily better products; and that's really where the funds are going to focus, in terms of market segments specifically.”
It will also embrace brands that are not just you good-for-you but also good-for-the-world, along with those coming up with new ways to improve longevity.
“Beauty and personal care is really exciting, with incredible [developments] even over the past 10 years,” said Giannuzzi.
“And we’re seeing interesting things with pets, a [category that’s] little bit less regulated, so there’s products coming out that often start with pets and end up for human beings after proper testing.
“So, across the board, we’re seeing the evolution of eating better and living healthier and we want to be part of that.”
In name and in spirit
Giannuzzi said the origins of the company’s name goes back to his own ‘humble’ beginnings at the start of his career.
“I didn’t have many clients and didn’t have any money and I was pretty desperate [so] I made a rule that I would take every call … a lot of them ended up being favours, but if you do enough favours, things always come back to you,” he told this site.
“So, our view is we want to meet everybody.
“If we get 100 calls in a day, it might be tough, but we want to meet young brands. We’re not going to invest in a brand that launched last week or even last year but [for us] to be meaningful and impactful in this industry, the way to start is to meet those young brands today.
Giannuzzi added, “It’s completely self-serving, but we really want to meet everybody. So when they reach out, we’ll try to be really responsive and to be a friend.”
“The three of us came together about two years ago with an idea and a concept that we thought was quite different and transformative in our industry.”
Giannuzzi’s first client - back in 1999 - was a small concern with five or six employees, bringing in a couple $100,000 in revenue from a product called Fruitwater. Energy Brands initially distributed its products to health food stores and independent retailers in the New York area, adding VitaminWater to its line in 2000, which saw it jumping to $670m in revenue by 2007, when it was sold to Coca-Cola for $4.1bn.
“I became known as the VitaminWater lawyer and with that experience, I started a law firm dedicated exclusively to startup founders in the food, beverage, beauty, supplements and pet food sectors.”
Today, Giannuzzi Lewenden has almost 25 lawyers serving 1,000 brands in the consumer space.
“The origin of Humble actually comes from my experiences serving these founders,” said Giannuzzi.
Often, when founders need to raise money - to expand their portfolio, increase their retail footprint or ramp up their marketing - they approach what Giannuzzi terms as ‘investor people’.
“These are people with MBAs and super smart and often quite nice. But they’ve never worn the hat of the founder. They’ve never been through a process of building a company,” he said.
“So a number of years ago, we started to think - instead of just raising money from pension funds and so on, and being a super smart MBA person - what if instead we built a fund funded by and partnered with the founders, the people in the industry who have had success and failures and who pooled all their money together and said, ‘you know what, not only are we going to give you money, but we're also going to help’.
“Humble actually has over 100 LP [limited partners] of the industry: the who’s who; people who were founders and CFOS and CMOs. People who are distributors; people who are suppliers, on and on - we’ve pooled all these people together.
“That’s really what makes Humble different. Now, when we go to a founder, we [can] say ‘Humble would like to not only give you money, but in addition to Peter, Andrew, me and the team we've hired, we have 100 LPs who are willing to roll up their sleeves and help you get a better result, help you avoid mistakes, help you accelerate your brand.
“We thought that this done right could be transformative and could offer the founders out there a new and hopefully better alternative when they look for growth capital.”
A gamechanger for up-and-coming brands
“Humble Growth represents one of the most disruptive and coherent investing strategies we have seen in consumer growth,” said Don Kerrigan, CEO of Nestlé Health Science US.
“A fund that is truly built by transformative founders coupled with an incredibly impressive lineup of limited partners that are fully immersed in the industry makes us at Nestlé Health Science incredibly excited to be a part of the journey.
Added Stonyfield Farm’s Hirschberg, “When the idea of Humble Growth began gaining momentum, I was thrilled to jump in as a founding investor.
“We are building a true win-win-win model for the investors, the investees and the business.
“I would have killed to have had a Humble Growth available to support Stonyfield and help bring not only critical funding but also seasoned guidance during our growth years.”
Verlinvest MD Clément Pointillart said Humble Growth fills in a gap. Verlinvest is largely involved in late-stage venture capital funding and mid-market private equity, typically investing $20m-$200m in a business.
“We’re committed to backing founders and businesses that are driving consumer revolutions forward while having a positive impact - and Humble Growth’s founding team shares this mission,” he said.
“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.”
For its role, Giannuzzi said Humble will be writing cheques from $10m to $40 million.
Bodyarmor’s Repole expects Humble Growth to be “a gamechanger for up-and-coming brands looking to benefit from the experience they bring in building consumer brands. I am excited to be an investor in Humble Growth and work alongside the founders to identify, nurture and grow the next generation of innovative brands.”
- Listen to the podcast to find out more about Humble Growth.
