General Mills-Backed Supply Change Capital Debuts $40 Million Fund

Latina-led venture capital firm, Supply Change Capital, has officially closed its $40 million inaugural fund from limited partners, including General Mills
GIS
’ venture arm 301 INC, MassMutual, and J.P. Morgan Asset Management. The goal is to invest in early-stage food technology companies that underpin a more resilient food system.

“Supply Change Capital represents the future of food and the venture industry,” Johnny Tran, managing director of 301 INC, said in a statement. “As a leading investment firm in early-stage food and agriculture technology companies, Supply Change Capital has a pulse on the cultural, demographic, and sustainability shifts needed to usher in the next wave of groundbreaking innovations for our industry.”

Founded by two industry veterans Noramay Cadena and Shayna Harris, who met at the MIT Sloan School of Management in 2009, after uncovering overlooked and underinvested trends in the food industry, Supply Change Capital has pivoted its thesis on sustainability, health, and diversity, deploying over $13 million across 15 businesses so far since 2021. Notably, Aqua Cultured Foods, a seafood alternative provider using fermentation techniques; Michroma, a supplier of fungi-based natural ingredients; allergy-friendly brand Partake Foods; as well as Agua Bonita, a sugar-free fresca made with rescued fruit are part of its portfolio.

“From our intersectional set of investors to our robust portfolio, we’ve seated a venture firm platform that can endure and thrive,” said Noramay Cadena, founder and managing partner of Supply Change Capital.

“Ultimately, each LP, founder, and stakeholder in our community understands the same thing we do: we are on the precipice of a transformative change at the intersection of food, culture, and technology. With 40 years of combined operating and investing experience, we’ll be the team leading investments through this evolution to a more inclusive and sustainable food system.”

It’s noted that Cadena is among the only 2% of venture capitalists in the U.S. who are Latina/Latino, according to LatinxVC data, and 16.1% of female decision makers in the VC world, PitchBook showed. The debut of Supply Change Capital came at a time when less than 1% of capital deployed by the largest VC and private equity firms has gone to Latino-led businesses, a recent Bain & Company’s study revealed.

Navigating Evolving Trends In The Food System

With 80% of its portfolio currently led by Latino, Black, women, and other underrepresented founders, Supply Change Capital’s team believes their investing ethos resonates with the evolving demographics and changing consumer behavior in the marketplace.

Harris stressed: “The food industry is responsible for a third of climate emissions. Multicultural citizens account for nearly all of US population growth; by 2050 there will no longer be a ‘minority’ in the U.S.” She added how innovation is needed across food and agriculture and it is even more critical as demographics shift and the environment commands new solutions.

“This year alone we have seen exciting industry news ranging from the Cava IPO, to the Mercaris acquisition, and the FDA approving the sale of lab grown chicken in the US. We believe Fortune 500 will continue to acquire innovation, given the increasing pace that it is needed to manage risk, future-proof supply chains, and capture new markets,” said Harris.

Supply Change Capital aims to invest in 25 companies out of its first fund, and has made 15 investments so far, including two earlier this year. While the firm continues evaluating deals, it says potential startups need to have a clear business plan and path to profitability.

“We are focused on fundamentals. We invest in startups that have a stellar team, are addressing a real problem in a large market, and where we see a path to a profitable business,” Harris said. “It is an exciting time to be investing at the pre-seed and seed stage, and we know that the market will come back so companies that have solid fundamentals will find success.”