September 22, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Although there is admittedly still much we don’t know about the connection and interaction between our genes and the foods we eat, personalized nutrition, and by proxy, functional foods and beverages, have been noted as being some of the key drivers in the evolution of the food industry.

Perhaps reflecting and reinforcing the growing credibility of personalized nutrition is the growing number of doctors considering the impact of nutrition on their patients’ treatment plans for both preventing and treating illnesses.

At the same time, thoughts on animal welfare and environmental impacts have been behind a widespread consumer shift toward incorporating more plant-based foods and beverages into our daily diets.

Today there are an increasing number of startups led by science-driven innovators that are integrating both a functional aspect, such as ‘food as medicine’, and a plant-based formulation in new product advances. One such company is Kate Farms.

Novo Holdings has stepped forward to lead a $75 million Series C for the company that produces plant-based, organic, and clinically demonstrated formulas for tube and oral feeding to help sustain people with chronic illnesses and acute conditions. 

Other participating investors in this round, which follows a $51 million Series B raised by the company in late 2020, included Kaiser Permanente Ventures, Goldman Sachs Asset Management, Main Street Advisors, and existing individual investors.

Kate Farms was originally founded by Richard and Michelle Laver when their daughter Kate failed to thrive on typical tube-feeding formulas. In 2015, entrepreneur Brett Matthews invested in the company, becoming chairman, and eventually its full-time CEO.

Made from easily-digested organic pea protein, Kate Farms’ feeding tube formulas and shakes are free from the common allergens found in existing choices on the market, but include prebiotic soluble fiber from organic agave inulin and a clinically effective phytonutrient blend that provides antioxidants.

“Despite the challenging global economic environment, I’m pleased that Novo Holdings and our existing investors appreciate the significant potential of plant-based nutrition and Kate Farms’ leadership in this rapidly growing market,” said Brett Matthews, chairman and CEO of Kate Farms since 2015. 

“Our brand has deeply held values, which means that finding the right investment partners is a critical choice for us,” continued Matthews. “Novo Holdings’ investment in Kate Farms will allow us to develop more innovative products, enter new markets and continue to serve the patients who depend on us for their nutrition, as well as thousands of healthcare providers.”

Since Q1 2021, Kate Farms has launched 13 new products including the only organic and plant-based closed-system hanging bag to deliver formulas in the hospital setting (particularly therapeutic formulas for diabetes and renal support), new peptide and standard formulas for pediatric and adult uses and new flavors.

Today, the company’s products are available at more than 95 percent of U.S. hospitals, and are covered by Medicare, Medicaid, and more than 2,000 private insurance plans.

“We are pleased to partner with Kate Farms and support them in their efforts to meet the nutritional needs of numerous patient populations,” said Kartik  Dharmadhikari, partner, Novo Growth, Novo Holdings.

“We believe our life sciences heritage can serve the company well as it explores additional ways to utilize science and clinical evidence to support plant-based clinical nutrition. Furthermore,” continued Dharmadhikari, “this investment aligns seamlessly with our purpose of improving people’s health and the sustainability of society and the planet.”

With this capital, Kate Farms stated that it will pursue additional innovation in its current product portfolio, and will develop new products while entering new channels, as it builds upon seven years of sustained growth.

The company also stated that it will be opening its first Innovation and Quality Center in Goleta, California, this month and will be  presenting two clinical abstracts at the upcoming Association of Pediatric Gastroenterology and Nutrition (NASPGHAN) conference in October.

Company co-founder Richard Laver commented,  “Michelle and I started Kate Farms to help our daughter Kate who was failing to thrive. This investment from Novo Holdings and other notable investors is a milestone and a market validator that the product we created for Kate has helped so many.  We are confident that Kate Farms will continue to create breakthrough nutritional products to help patients thrive.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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