InvestEco Capital closes $106M fund for sustainable food bets

InvestEco Capital has wrapped up fundraising for its largest pool yet, a $106 million vehicle targeting food companies that pitch health and sustainability as growth drivers.

The Toronto firm announced the final close of Sustainable Food Fund IV on Monday. The money is already at work in consumer-packaged goods (CPG) names like Humble Snacks, Little Sesame, Mid-Day Squares, and Algae Cooking Club.

“We are one of the few funds that truly specialize in investing in high-growth disruptive companies with a health and sustainability focus in the food sector,” managing partner Andrew Heintzmann said in an email.

Heintzman said InvestEco’s average first cheques run $4 million to $5 million. The firm targets CPG companies that “tend to have high-innovation in terms of unique supply chains and manufacturing.” A smaller slice of the portfolio holds intellectual property or sits in the AgTech space.

The fund’s limited partners are weighted toward government sources. Federal crown corporations Farm Credit Canada, Export Development Canada, and the Business Development Bank of Canada are in the pool, along with Quebec’s Fonds de solidarité FTQ. Private investors and family offices also chipped in. Two notable private backers, Boann Social Impact and Realize Capital Partners, are themselves supported by the federal government’s $755 million Social Finance Fund, a program launched in mid-2023 to grow Canada’s social finance market.

InvestEco has backed tech-heavy Canadian names before, including meal-kit company Chefs Plate (acquired by Hello Fresh) and fish-free omega-3 producer Mara Renewables. The firm expects to make another six to 10 investments out of Fund IV over the next few years.