By Lynda Kiernan

Boulder-based growth equity investment firm Harbinger Ventures announced a close for its second fund with capital commitments totaling $21.7 million. This close brings the firm’s capital under management to $27.8 million, and at 12 times the size of Fund I, is a reflection of success of Harbinger’s investment thesis. 

Launched in 2016 with a pilot fund of $1.8 million, Harbinger focuses on investment opportunities in early-stage CPG companies that are led by either female, or mixed gender management teams. The firm backs brands that are sustainably differentiated, and that address existing gaps in high-growth consumer sub-categories to curate a unified portfolio representing a cohesive collection of companies that reinforce each other.

“The best investment firms focus their portfolio around a core area of specialization, typically limited to a particular sector and growth stage,” said Megan Bent, founder and managing partner, Harbinger Ventures.

“At Harbinger Ventures, we bring the same level of discipline and domain expertise to our sector and growth-stage criteria as do other best-in-class firms, but we are able to unlock additional value by adding a third dimension: the specific gender composition of leadership teams.”

Fund I was able to make investments of between $300,000 to $400,000, however, the greater capital ready to deploy from Fund II has enabled the fund to increase the size of its commitments to between $4 million and $5 million, and to begin targeting more mature brands with net sales ranging from $1 million to as much as $10 million, according to Nosh. 

To date, the firm has made three investments from Fund II, with future intentions to close an additional two. 

“The best business models that are sustainable and have the opportunity to grow capital efficiently are often more than just brands and products,” Bent told Food Navigator. “They also incorporate consumer insights into innovating the business model itself.”

With this in mind, Harbinger has made some notable investments in rather successful brands including Miss Jones Baking Co, a better-for-you, organic food company; Once Upon a Farm, a fresh baby food company co-founded by actress Jennifer Garner that has gone on to raise $20 million;  Nona Lim, a maker of fresh Asian bone broths, soups, rice, and ramen noodles that has also raised capital from Accel Partners; and most recently, in July of this year, has led a $7.5 million Series C for 4th & Heart, an artisanal company that makes a line of grass-fed ghee products.

“In part, our success can be attributed to treating our portfolio companies not simply as investments, but as partners,” said Seth Beers, managing partner at Harbinger Ventures.

This intention is put into action by Harbinger, which takes the unusual step of distributing 10 percent of the fund’s profits that normally go to the fund’s partners, to the founders of each of their portfolio companies. 

“We prioritize collaboration between ourselves and our portfolio, as well as among our companies through a model in which each entrepreneur also has an equity stake in the larger Harbinger portfolio, encouraging innovation and expertise to be shared across companies,” said Beers.

“This sharing of best practices is highly unique, and invaluable for helping early-stage companies thrive, positioning us to deliver attractive, consistent returns.”

 

– Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.