Plant-centric venture capital firm Powerplant Ventures has made a majority investment in Los Angeles-based bean and rice tortilla chip provider Beanfield Snacks.
The investment includes an equity and revenue sharing agreement with a non-profit organization, Homeboy Industries, that provides training and support to former gang members, the company announced Thursday.
Powerplant’s investment in Beanfields came from its debut fund, which was launched in 2015 and closed on $42 million in August after drawing investments from high-net-worth individuals and family offices, Powerplant managing partner Mark Rampolla confirmed to Agri Investor.
The fund is designed to support the plant-centric food and beverage brands of entrepreneurs interested in making a “positive impact”, according to a statement released on the occasion of the fund’s closing.
The fund will reportedly make investments of up to $250,000 in seed rounds and between $1 million and $2 million in Series A and B deals, partnering with with companies that have at least $1 million in revenue.
Founded in 2011 and headquartered in Los Angeles, Beanfields produces chips made from beans and rice in flavors including sea salt, barbecue and pico de gallo. Certified as plant-based, kosher and non-GMO, the company’s products are sold under the Beanfields brand throughout the US, Canada, Australia, and the UK.
Powerplant invests in plant-centric companies offering nutritious products. Also based in Los Angeles, the firm’s previous investments include plant-based milks provider Ripple Foods, egg substitutes company Hampton Creek and Veggie Grill, a better-for-you restaurant chain.
The Beanfields investment is the latest in a series of deals by investors hoping to keep pace with evolving consumer preferences for plant-based and healthier foods. In January, specialty foods provider Roquette announced a $300 million expansion of its pea-processing facility and private equity firm Brynwood Partners sold plant-protein focused Lightlife Foods to Maple Leaf Foods for $140 million in February.
In addition, venture funds connected with large established food companies have invested in start-ups pursuing new plant-based foods, such as Kellogg’s participation in a $4.25 million fund round for Kuli Kuli, which offers products made from moringa, a plant protein grown in semi-arid and tropical areas.
Rampolla told Agri Investor that the partnership with Homeboy Industries grew out of a commitment shared with Beanfields founder Reed Glidden to pursue investments with sustained social impact.
Under the agreement, Rampolla said, 1 percent of both Beanfields’ sales and employees’ time will go to directly Homeboy. In addition, Homeboy will receive an equity stake of between 5 and 10 percent in Beanfields after Powerplant’s initial investment has been recouped.
Rampolla said that Powerplant is also in negotiations with an additional high net worth investor willing to give Homeboy a 50 percent stake in profits exceeding their initial investment plus 8 percent.
“We are economic animals. Our investors are expecting an economic return,” Rampolla said. “We looked at this and evaluated it from a pure economic lens and said: ‘Hey, this is good business.’”
Rampolla, who founded ZICO Vitamin Water before it was sold to Coca Cola in 2013, explained that the agreement with Homeboy also includes plans to use the organization’s social media and donor base to increase interest in the Beanfields brand similarly to how a celebrity endorses a product.