Branch Venture Group: Boston Food Startups Get a Boost
Illustration by Michael Piazza
Marcia Hooper recalls a conversation with business partner Lauren Abda that illuminates an important truth about building a successful food company. “I meet these incredible entrepreneurs every day who have everything right, but money,” Hooper remembers Abda saying.
As founder of Branchfood, a Boston-based group that connects food entrepreneurs, industry experts, corporate leaders and others who are interested in improving the food system, Abda comes across many entrepreneurs who fit that description.
Through its meetings and events, Branchfood focuses on building community and supporting food innovation. Getting the money part right is important fuel for that innovation. Hooper and Abda decided to help by forming Branch Venture Partners, an angel investing group that provides funding and advice to early-stage food companies in New England and beyond.
“As we think about the food industry at large, it is arguably one of if not the largest industry in the world. The opportunity for new business creation is remarkable,” Abda says.
The two were uniquely qualified to launch the food-focused fund. Abda holds a Master’s in Food Policy and Applied Nutrition from the Tufts Friedman School of Nutrition Science and Policy, and started her career at the World Trade Organization. Hooper has more than three decades experience in venture capital investing, having been a partner at Advent International and Ampersand Ventures.
Founded in 2017, Branch Venture now invests in a portfolio of 15 companies pioneering everything from commercial seaweed farming to extending the shelf life of fresh foods to making pet treats from misfit produce.
As angel investors, they serve an important function for these new food companies.
Many startups are funded with a founder’s personal investment plus funds from friends and family who have a vested interest in the entrepreneur’s success. When a company can show more of a track record, banks and other institutions are willing to invest. Angel investors can be the bridge that helps a new company scale up, get a management team together and move on to the next level.
That was exactly the position Adam Behrens’ company Mori was in when they met with Branch Venture. Mori is a Charlestown-based startup that uses a protein extracted from silk to extend the shelf life of perishable goods like produce, meat, flowers and coffee. Mori had been around for about a year and was on its feet enough to have its first payroll at the time Branch Venture decided to invest.
Behrens, who has a PhD in bioengineering and a background in material science, saw an immediate upside to Branch Venture investors and advisors who were focused solely on the food industry.
“So they’re investing, but they’re also so deeply connected and passionate about the company that they’re giving you significant time. It’s really a huge win if you find the right people at that stage because they become so personally invested that it’s almost beyond the financial return. And it’s a pleasure to work with people like that,” Behrens says.
Boston has long been a hub for venture capital investing—more than half of all venture funding in the country comes from firms located in San Francisco, New York and Boston. It’s easy to picture Boston venture investments going to software, life sciences, fintech (financial technology) or block chain startups, but food companies might not immediately come to mind as offering the same potential rewards.
The Branch Venture partners see Boston as the perfect location for both investors and entrepreneurs searching for the next big food success story. One important reason: It’s already being done here. The Boston area has spawned more than a dozen food-related companies valued at over $1 billion: Dunkin’ (now owned by Inspire Brands), Ocean Spray and HP Hood, among them.
“Our goal is to put Boston on the map for food innovation,” Hooper says.
She says that around 2015, experts saw Boulder, Colorado, with its focus on functional foods as the center for food innovation. She now puts New York and Boston at the top of the innovation list, with San Francisco not far behind.
“You’ve got these big companies that understand food, have grown and developed. Then you have academic institutions which all have entrepreneurial programs and a lot of students. You’re beginning to see more and more companies that have evolved around food. So you have this influx of talent. Boston also knows a bit about venture capital and has legal, accounting and all of the other pieces you need to put in place to really grow businesses,” Hooper says.
One business that has grown under the Branch Venture umbrella is Atlantic Sea Farms, a Maine-based company looking to help regenerate the ocean and provide new economic opportunities for fishing communities through kelp farming.
The company works with Maine lobster fishermen to create kelp farms that can be managed and harvested with boats and equipment they already use. According to CEO Briana Warner, the company is responsible for 85% of the line-grown kelp sold in the U.S. Atlantic Sea Farms also recently launched a sea veggie burger.
When Warner connected with Branch Venture in 2018, the company had two farmers—the first commercial seaweed farmers in the U.S.—producing about 30,000 pounds of kelp. Today the company works with 27 farmers and produces about a million pounds.
“I was immediately impressed with the quality of people in that group of advisors. They were people who really knew deeply about food and were really focused and knowledgeable about a future food system that was better than that in the past,” Warner says.
She also said they were patient with their investments.
“That’s very different from other angel groups I’ve seen out there and very different from other food groups I’ve seen out there, too,” Warner says.
The understanding and patience may come from the fact that many of the investors and advisors who are part of the group come from successful food businesses. Warner contrasts that with other investment groups she has met with who have capital but may have less direct experience with the industries they are seeking to fund.
“At Branch, they’re operators who know exactly what to ask. They’re asking hard questions and making you come to the table with good answers. We’ve really benefited from the folks that have invested in our company through Branch Venture and that has also ended up making connections to us for other larger investors down the road,” Warner says.
The executives at both Atlantic Sea Farms and Mori point to connections they have made or problems they have solved from working with Branch Venture.
“Last year we were having a hard time finding compostable packaging. I asked Lauren, ‘Do you have any folks in the portfolio who have been able to tackle this? Can you help us figure it out?’ And she just makes tons of connections for us, both with operators and other portfolio companies. It helps us better understand each other and learn from each other rather than all learning the lessons on our own,” Warner says.
The nature of food businesses creates complexities that are different from the technology companies that many venture funds invest in.
“A lot of the venture capital model existed in intellectual property: I created a piece of software or I found a particular unique molecule that has metabolic impact. Food is a hard good. You have to physically touch it, move it, handle it. It goes through lots of distribution points, there’s a whole supply chain. Those are skill sets a lot of venture capital never had to deal with,” Hooper says.
But it is exactly the skill set that Branch Venture offers to the companies in its portfolio. By connecting entrepreneurs not only to capital, but the advice of experts who have lived the challenges of starting and running a food business, they are able to help founders manage complexities of bringing products to market, things like shelf life and marketing.
Someone who has found success making a product in small batches at farmers markets may not have thought about how that product will hold up after spending eight weeks in the distribution channel or how they figure out which flavors the market wants.
“A lot of our time is not only spent on identifying a potential investment opportunity, but also connecting them with other people in the industry that can help support knowledge gaps that they may have or goals that they may have. It really is bringing that network together, which now has been building over the last almost 10 years since we started the meetup group to support entrepreneurs in their entrepreneurial journeys,” Abda says.
Branch Venture is one of a few firms focused on the food industry, with a special focus on companies that are using innovation and entrepreneurship to solve important challenges facing the food industry—and the planet more broadly. The companies competing for attention and investment from Branch Venture are addressing issues such as climate change or improving health through customized nutrition.
Abda notes that many are focused on issues related to sustainability: How can we feed the planet without destroying the planet? How might we improve farming? How can we reduce waste, improve efficiency and deliver more healthy products to people?
Unsurprisingly for the Boston area, another innovation Branch Venture sees often is in the crossover of biotech and food, which may include innovations around personalized nutrition, or cellular agriculture where milk or eggs can be made without cows or chickens. Whatever the technologies, many of the companies’ visions circle back to a vision for how to improve the food system to feed 10 billion people in the world by 2050.
But not every great idea Branch Venture chooses to support is about the important business of health, climate change or sustainability.
“What’s great about food is you can still have fun with it,” Hooper says. “We have a company that makes canned mimosas and now canned sangrias. Food doesn’t always have to be serious.”
This story appeared in the Winter 2023 issue.
