Urban Remedy, a plant-based organic food and beverage company, has closed $17 million in Series B funding led by 301 INC, the investment arm of General Mills. This brings the company's total financing to around $28 million.
The company was founded in 2009 by licensed acupuncturist Neka Pasquale with the idea of bringing ancient Chinese medicine practices to modern-day food preparation. Urban Remedy offers a variety of ready-to-eat plant-based meals, snacks and cold pressed juices that have all been certified organic and non-GMO.
Urban Remedy sits between the two crowded markets of cold pressed juices and prepared meals, but the company believes its offering of unprocessed, nutrient dense food sets it apart from the plethora of other companies playing in these markets. "I can't think of many companies doing fresh, clean and convenient and doing all three of those things together well," said Paul Coletta, CEO, Urban Remedy.
The commitment to fresh ingredients and holistic approach to health and wellness was something that 301 INC also saw as a differentiator when deciding to invest in the company. "I love the vision of Paul and Neka where they talk about food as healing and the power of nutrition in the diet," said John Haugen, vice president and general manager, 301 INC. "Urban Remedy really combines nutrition with great taste."
The duo also believe that the company's omnichannel retail model is a point of differentiation. Urban Remedy has an online marketplace and ships direct to customers across the nation from its headquarters in Point Richmond, Calif. It also operates 13 retail locations throughout the San Francisco Bay Area and has kiosks in 30 Whole Food stores across Northern and Southern California.
Its kiosk business has proven to be a major growth driver, and last year that channel saw 350 percent growth while the business experienced 100 percent growth overall. It expects to pick up 1-2 new partners for its fresh kiosk business in the Bay Area this year as well as expand its partnership with Whole Foods.
As the company continues to expand its footprint, there could be potential to tap into General Mills' established and growing organic supply chain. In 2016, the company announced that it would double its organic acreage to 250,000 by 2019. While Urban Remedy is in the early days of its relationship with 301 INC and there are no immediate plans, Haugen, who is joining the board, indicated that this was something they would evaluate. "What we are looking to do is to combine investment capital with access to the resources and capabilities of 301 INC and General Mills to help partners, like Urban Remedy, grow," said Haugen.
Even with opportunity abounds, Urban Remedy recognizes the pitfalls of scaling too quickly. "We have resisted the temptation, unlike a lot of other food companies, to try to go too far too fast," said Coletta. "We are going to grow responsibly in a way that doesn't jeopardize quality or the profitability of the business. We are in no big hurry to scale quicker than either the consumer will allow us or that operations will support in a high-quality way."
With this new round of funding, Urban Remedy plans to expand its production capacity and will be adding a second market with a regional hub this year but declined to elaborate on the plans. As it continues to grow the business, it will also invest in more automation to allow it to "execute at a high-quality level."
As part of today's announcement, the company is also adding industry leader John Foraker to its board of directors. Previously, Foraker was the CEO of the organic food company Annie's, which he led to an IPO in 2012 and then an acquisition by General Mills in 2014 for $820 million. Currently, he is the CEO of Once Upon a Farm, a organic baby food company.
"If I could have chosen anybody to join my board, John Foraker would have been at the top of my list," said Coletta."He is absolutely passionate about the mission behind the whole organic food movement, and he has unparalleled experience growing a responsible food business."