By Lynda Kiernan
U.S.-based food startup Banza has raised $20 million in growth funding led by Enlightened Hospitality Investments, the growth equity fund connected with Union Square Hospitality Group, and CPG-focused growth equity fund Prelude Growth Partners.
This round follows a $7.5 million Series A raised by the company in 2017, and $1.3 million in funding raised from various investors in 2015.
Banza was founded in 2014 by brothers Brian and Scott Rudolph with the mission to increase the accessibility of nutritious food. With this goal in mind, the startup set its sights on reinventing and upgrading a favorite comfort food that U.S. consumers eat 2.7 tons of per year – pasta.
The company’s initial products were a line of chickpea-based pastas that have almost double the protein content, three times the fiber, and one-third fewer net carbs of traditional pasta. In only five years the company has experienced rapid growth, and is now available in more than 12,000 U.S. retail locations, including Target and Whole Foods.
Building on this success, Banza’s offerings now also include chickpea mac & cheese, and chickpea rice.
“Our investment in Banza, a company that is successfully disrupting categories that consumers love but where they have been offered little in the way of innovation, is a perfect example of our strategy being put to work,” said Mark Leavitt, co-founder and managing partner, Enlightened Hospitality Investments.
Chicka-Boom
Naturally gluten-free and nutritionally high in protein and fiber, chickpeas have been linked to improvements in satiety, cardiovascular health, and digestion. Their health benefits and ability to play a key role in creating gluten-free alternative foods are driving expectations that the global chickpea market will grow at a CAGR of approixmately 4 percent between 2018 and 2022, according to Techavio.
Chickpeas have also been a surprising driver for innovation in the snack category, which has recently been securing greater capital investments.
Boston-based chickpea snack company Biena raised $3.75 million through a high-profile Series A that includes Blueberry Ventures, Centerman Capital, and New Ground Ventures; a well as Darren Rovell, partner in Tastemaker Capital, who also brought in Sara Blakely, founder of Spanx, Jesse Itzler, co-founder of Marquis Jet and early investor in Zico Coconut Water.
In August of this year, the company went on to raise another $8 million through a Series B led by MAW Investments, and including Blueberry Ventures, Centerman Capital, Tastemaker Capital, and New Ground Ventures.
Another chickpea snack company, HIPPEAS, raised $10 million in 2017 from CAVU Partners. This investment follows only months behind the startup announcing in May of this year that it had closed on an undisclosed investment in a high-profile round that included Strand Equity Partners, a leading growth equity fund co-founded by Leonardo DiCaprio and Seth Rodsky.
Chickpea protein as an ingredient has also seen recent interest. In December of last year, Israeli food tech company InnovoPro announced it had closed on a $4.25 million Series A led by Swiss retail giant Migros, and Erel Margalit, founder and chairman of Jerusalem Venture Partners, a leading Israeli venture capital fund.
Founded in 2013 by Dr. Ascher Schmulewitz in Rishpon, Israel, InnovoPro says it is the world’s first food tech company to successfully produce a 70 percent protein concentrate from chickpeas. Called CP-Pro 70, the vegan protein concentrate is non-GMO, soy-free, dairy-free, gluten-free, and is not a listed allergen, nor does it contain phytoestrogens.
Goals
Riding this wave of consumer and investor interest, Banza claims it is now the fastest growing pasta brand in Whole Foods and Target. This year the company launched five new pasta shapes, and plans to polish its messaging with a new VP of sales.
“The consumer packaged goods industry is being regenerated, driven by the needs of the Millennial consumer,” said Neda Daneshzadeh, co-founder and managing partner at Prelude Growth Partners.
“Prelude’s proprietary research indicates that Banza is resonating deeply with Millennials driven by its nutrition-rich and delicious product offering in a category which has seen very limited innovation. Banza also brings a sustainability lens to this space, which is increasingly an important factor in consumers’ purchasing decisions.”
The startup also has its sights on expanding its reach into the foodservice sector, a space where Banza sees its partnership with Enlightened Hospitality Investments giving its an advantage.
“We have been closely watching consumer interest in plant-based protein within the Foodservice and CPG industries and are excited to watch Banza continue to capitalize on these trends,” said Leavitt.
To keep pace, Banza has opened its own manufacturing facility in California, increasing its capacity tenfold. And in the future, is open to the possibility of expanding into other plant-based food segments such as corn, rice, or wheat-based options.
“We look forward to partnering with the Brian, Scott and the management team as they continue to reinvent beloved food categories and develop Banza into an iconic, powerhouse brand.”
– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.