Other investors in the financing round include Marcy Venture Partners (co-founded by Jay Z), FF2032, Kevin Johnson's Black Capital, Black Star Fund, and CEO of Once Upon a Farm John Foraker.
Chuck Muth, chief growth officer of Beyond Meat and current investor in the growing brand, will be joining Partake’s board, along with Aditi Dash, partner at CircleUp Growth Partners.
Dash - who in addition to working for two other private investment funds before joining CircleUp, previously led new product discovery and innovation at La Colombe Coffee, and prior to that, served as the operations manager for meal kit company Blue Apron - said the diverse investor interest in Partake is atypical for a new brand and a testament to the mainstream appeal founder Denise Woodward is building.
"She is creating a brand that’s not meant to be niche," Dash told FoodNavigator-USA, adding that the addressable market for Partake's allergy-friendly products (which currently includes a lineup of packaged cookies free from the top 8 allergens and baking mix) extends well beyond the already sizeable audience of 32 million Americans with food allergies.
"Our bet is that allergy friendly is going to translate some way into better-for-you. We think that Denise is building a platform for better-for-you food and it’s meant for people with or without dietary restrictions," said Dash.
Founded in 2017 by Denise Woodard, whose daughter was diagnosed with multiple food allergies, Partake products are made at a Top 8 allergen-free manufacturer and are certified gluten-free and vegan made from a gluten-free flour blend (organic light buckwheat flour, cassava flour, gluten free oat flour, tapioca flour), organic cane sugar, gluten-free oats, non-GMO sunflower oil, tapioca starch, and other allergen-friendly ingredients.
The products are also certified Glyphosate Residue-Free by The Detox Project.
Partake recently a new 5-in-1 baking mix, which offers the convenience of a multi-purpose mix, minus the top 8 allergens.
“The demand for thoughtfully-made cookies, snacks and treats is clear, and we are excited to continue to provide plant-based, safe, and crave worthy foods to consumers," said Woodard.
'An outreach from CircleUp means that we are genuinely interested'
While virtually all investment requires taking on some amount of risk, the process by which CircleUp identifies category-leading brands minimizes the unknown based on its proprietary, data-rich, machine-learning platform called Helio.
"As an investor, my job is to evaluate that data and think about distribution, brand strength, product uniqueness, pricing, category dynamics, and the number of other factors," said Dash, which by traditional methods typically includes attending tradeshows and in-person meetings with founders, which all came to screeching halt in 2020.
"The traditional way of finding and discovering brands is even tougher in a Zoom world," she said.
Helio, she said, helps identify not only which brands are growing but uncovers the brands that would be a good fit for CircleUp's investment portfolio.
"It saves me time, but it also saves the entrepreneur time in knowing that an outreach from CircleUp means that we are genuinely interested in learning about the company and talking about a potential investment," Dash said.
In the case of Partake, the brand's strong distribution growth - relative to its size - was a compelling metric for CircleUp. Within one year on the market, Partake expanded its store count from 350 to 2,700 locations.
"We have found that distribution is a very important indicator of success in early brands," said Dash, who added that CircleUp will help the emerging brand double its store count to roughly 5,500 retail doors by the end of Q1 2021 including further distribution at Target, Whole Foods Market, Sprouts, and The Fresh Market.
The next growth chapter
In addition to doubling its distribution reach, Partake's next phase of growth includes plans to expand marketing efforts and grow its internal team, said Dash.
"There’s a lot that the brand can be doing to make sure that consumers across the US know what the brand’s vision is and mission is and what the products are like. I think there’s a lot to do with sales, which doesn’t mean just getting into the store; it means supporting growth and holding the hand of retailers as the brand grows," she said.
Lastly, there's a need to build out Partake's team, said Dash.
"It’s important to support the internal infrastructure of the brand as sales and distribution grow, so finding the right people is super important," she said, adding that whatever next steps are made for the future of the brand will be a joint decision between Woodard and Partake's board of advisors.
"We trust founders a lot in leading their companies, and we’re supportive of Denise’s use of capital," Dash said.