Dive Brief:
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Los Angeles-based Echo Capital Group has added three food companies to its portfolio: Back to the Roots, Nona Lim, and Wilde Brands, according to Food Business News.
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Back to the Roots produces organic ready-to-eat cereals and ready-to-grow mushrooms and herbs; Nona Lim specializes in non-GMO, gluten-free, dairy-free soups, bone broth and portable meals; and Wilde Brands makes non-GMO meat-based protein bars with lean cuts of meat and poultry, ancient grains, fruit and seasonings.
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Echo Capital’s portfolio also includes Quinn Snacks, Boomerang’s Pies, Stack Wine, Flo and Bucketfeet.
Dive Insight:
All these new additions to the Echo Capital portfolio are on-trend, with Back to the Roots’ passion for transparency, Nona Lim’s free-from credentials and Wilde Brands’ focus on ethically produced meat. Considering that Echo Capital Group describes itself as “The Investment Firm with the Millennial Edge," it comes as no great surprise that it's tapping into a clutch of food preferences mainly driven by millennial consumers.
The three companies are typical of the kinds of firms attracting investor interest: mission-led startups strongly motivated by ethics and a back-to-basics idea of wholesome nutrition. The funding is part of a growing trend of venture capital investment in food and agricultural technology, which nearly doubled in 2015 from the prior year to $4.6 billion.
For startups, investment firm involvement can give them the cash they need to make a dent in the market, and also can help with mentoring and other resources. However, these partnerships also come with the risk of losing control of the business and could slow down the decision-making processes that have allowed the brand to stay ahead of the market.
Investment firms also tend to have an eye on their exit strategy, which could mean that start-ups are sold in a few years, perhaps taking a hit to the credibility of those mission-led values that made them so popular to begin with. That said, the terms of Echo Capital’s latest investments have not been disclosed, so it remains to be seen how relationships will develop with these particular companies.