In January 2021, Mondelez International fully acquired Hu Master Holdings, known for its paleo chocolate, snack foods and NYC restaurant, for a reported $340 million. (Mondelez took a minority stake in April 2019). Some folks might have considered this a good time for a busy entrepreneur to kick back and relax, but Hu’s former chairman and cofounder, Jason H. Karp, was already well into his next act: a mission-driven food startup called HumanCo, which he cofounded with Ross Berman in 2019, before the Mondelez investment.
Today, Sept. 22, Austin-based HumanCo, a holding company for sustainable, better-for-you consumer packaged goods brands, announced the completion of a celebrity-studded $35 million bridge round that brings total funding to $50 million. At the same time, they announced the acquisition of a majority in stake in the family-owned, Vermont-based Against the Grain, which makes grain-free, gluten-free pizzas, breads and cake mixes. The purchase price was not disclosed.
“HumanCo was the culmination of everything I’ve done,” Karp said in an interview before the announcement. “I feel it’s my life’s purpose to facilitate the creation of products that help people live healthier lives.”
“We’re trying to create a one-stop shop for people looking for healthier options,” added Karp, who started Hu with his wife and brother-in-law after finding that a grain-free, paleo diet helped control his various autoimmune disorders.
That $35 million bridge loan will eventually convert to equity, before the completion of Series B financing some time in 2022, said Karp, a former hedge fund manager. “We were at a critical inflection point in the business, so we didn’t want to do a properly priced series B yet. But we knew we have a lot of needs for capital right now.”
In addition to making the acquisition possible, the new funds will enable HumanCo to continue growing its existing CPG portfolio and scout around for new potential acquisitions. HumanCo has three other brands at this point: Snow Days, which was started by HumanCo, sells healthy, gluten-free pizza bites, while HumanCo acquired Monty’s, which makes plant-based cream cheese and vegan butter, and Coconut Bliss, which makes vegan ice cream from coconut milk.
The bridge financing round brings in high-profile investors from the worlds of sports, entertainment and business. Joining actress Scarlett Johansson (now creative director at Snow Days) and Vista Equity Partners co-founder Brian Sheth from the Series A round, they include 8VC’s Joe Lonsdal; JAZZ Venture Partners; physician and author Mark Hyman; Indra Nooyi, the former CEO of PepsiCo; Kurt Seidensticker, founder of Vital Proteins; Nick Green, founder of Thrive Market; Walter Robb the former CEO of Whole Foods; investor Patrick O’Shaughnessy; singer-songwriter Shawn Mendes; tennis stars Venus Williams and Andy Roddick, swimsuit model and actress Brooklyn Decker, model and actress Cindy Crawford and Rande Gerber, an entertainment industry entrepreneur.
Was the inclusion of so many big names and celebs intentional? “To be honest,” said Karp, “the celebrities that have invested in this round have been fans of Hu since its founding and see the opportunity that exists within HumanCo for brands similar in nature.”
Karp also understands the critical role that influencers play with consumers. “By aligning HumanCo with the right celebrities, whose personal values align with our large-scale mission, it brings us one step closer to creating a more meaningful shift in the CPG industry,” he said.
Against the Grain was on Karp’s radar for some time. “This is a brand that we adored,” he said, citing the company’s focus on their local community, on sourcing from local farms and their commitment to healthy, grain free-foods. “We thought it would make a nice addition to the brands in our portfolio,” he said.
Against the Grain’s cofounders Nancy and Tom Cain will stay on as HumanCo helps the business grow to the next level.
“As a family-owned company in our small corner of Vermont, the decision to join HumanCo was not taken lightly,” co-owner Tom Cain said in a statement. “Of the many partners we could have chosen, HumanCo stood out because their mission and values are very much aligned with ours.”
HumanCo will continue to develop its own brands, and seek out other acquisitions. “Our plan is to do this and keep growing a platform of healthy brands,” Karp said. “We have a pretty sizeable team focused on M & A right now and we’re always looking at opportunities.”