Food Venture Financing News - Weekly Issue No. 39
In This Issue:
- Lawsuit Challenges PPP Questionnaire
- SBA Releases All PPP Borrower Information
- Food Venture Financing Trends
- Corporate Venture and Private Equity Funds
- Links to Relevant Content and Events
Lawsuit Challenges PPP Questionnaire
- The SBA released a questionnaire for recipients of PPP loans above $2 million to evaluate the borrower's "necessity" certification.
- The forms have generated criticism, not least of which is that evaluation of necessity may not be based on information available to the borrower when it applied for the PPP loan.
- Last week a trade group filed suit, alleging that the SBA's questionnaire is arbitrary and capricious, and that the SBA should be enjoined from denying forgiveness applications on the basis of the questionnaire.
- In an apparent response, the SBA quickly released a new FAQ providing that a borrower's necessity certification need only to have been made in good faith "at the time of the loan application."
SBA Releases All PPP Borrower Information
- Yielding to a court order, the SBA released information on all PPP loan recipients.
- The disclosure provides the names, addresses, and loan amounts for each PPP borrower (link).
The SBA had previously released information for PPP loans above $150,000.
- Around 86% of PPP loans were for amounts under $150,000, but loans in those amounts accounted for only approximately 25% of all PPP funds distributed.
Food Venture Financing Trends
- DoorDash announced its IPO last week, reflecting the increased demand for food delivery services.
- Two new prototypes by Google X focused on food waste and food insecurity have been recently developed for scaling and commercialization. Both prototypes use technology and machine learning to create a more efficient food distribution system and collect data to reduce food waste.
- Investors predict fermentation byproducts will attract demand in 2021 due to use as a health supplement and wider use in food and beverage products.
- Gotham Greens, an indoor agriculture and high-tech greenhouses company, announced a recent $87 million capital raise. The news highlights the increased interest in indoor farming and fresh grown products.
Corporate Venture and Private Equity Funds
Our featured CPG private equity firm this week is Shore Capital Partners.
- Chicago-based Shore Capital Partners makes control equity investments in food and beverage manufacturing, distributing, packaging, and related B2B service companies.
- Portfolio companies include:
- Old World Spices & Seasonings
- Main Street Gourmet
- Shore Capital Partners seeks to drive transformational growth in microcap food and beverage businesses with $5-100 million in annual revenue by providing operating expertise and capital.
Links to Relevant Content and Events
- Private Equity Firm Snags Aryzta Take-and-Bake Pizza Business
- Gotham Greens Raises $87M Series D Funding to Decentralize Food Production
- Fungi Protein Food Tech Nature's Fynd Bags US$45M, Brings On Cargill & Bel Brand Execs to Lead 2021 Launch
- Beta Hatch Banks $9.3M Series A, Breaks Ground on US's Largest Insect Farm
- Investing in the Future of Food: Ag-Tech Attracts Record Funding in 2020 for Supply Chain, Production Challenges Exposed, Intensified by Pandemic
- An Even Bigger Battle for Gig Worker Rights Is on the Horizon
- Google Takes on Food Waste With Food Tech Innovations Built by X
- Postbiotics… An Emerging Trend in Functional Foods and Beverages? In Conversation With ADM
- Rabobank: Increased Transparency, Digitation Needed to Reinforce Supply Chain Against Future Threats
- Foodtech Startup Nature's Fynd Raises $45M as Alternative Meat Takes Off
The Empower Project was created by a consortium of nine firms to amplify the voices of Black-owned businesses in the consumer-packaged goods (CPG) industry.
The firms hosting The Empower Project are all recognized leaders in their respective fields, which include branding, marketing, communications, food manufacturing, e-commerce, financial strategy, startup investing, financial strategy, data analysis, and legal issues. Together, they will be investing nearly $700,000 in services to a Black-owned CPG business to provide it with an opportunity to succeed in a highly competitive marketplace. Applications are being accepted now at caempowerproject.org.
Eligible businesses must be Black-owned or founded with $150,000-$10 million in annual revenue. Eligible businesses are invited to apply by January 15, 2021.
The Empower Informational 101 Event will take place on December 15, 2020 at 11 a.m. CST via Hopin. Register here.
The Empower Project is hosted by:
- C.A. Fortune
- C.A. Branding
- C.A. E-Comm
- Davis Wright Tremaine LLP
- Dobson Avenue Capital Partners
- The agency 1o8
- Propeller Industries
- Whole Brain Consulting
Naturally Bay Area's 3rd Annual Pitch Slam
Thursday, February 11, 2021
Here's your chance to show what you've got — get in front of top industry investors and your peers (virtually)! Naturally Bay Area's 3rd annual Pitch Slam competition celebrating the Bay Area's brightest brands, and giving the spotlight to a handful of local, emerging companies who will go head to head for a chance to win prizes worth thousands of dollars.
Apply to pitch here (Applications due Thursday, January 7th)
Please check out DWT's newly re-launched Startup Law Blog
At DWT, we are proud to have one of the largest Food & Beverage legal practices in the country, with over 40 attorneys representing food innovators, entrepreneurs, and investors at every level of the food chain, from Farm to Label.
Please contact our Food and Beverage team if we can assist you in any way in these unprecedented times.
The facts, laws, and regulations regarding COVID-19 are developing rapidly. Since the date of publication, there may be new or additional information not referenced in this advisory. Please consult with your legal counsel for guidance.
DWT will continue to provide up-to-date insights and virtual events regarding COVID-19 concerns. Our most recent insights, as well as information about recorded and upcoming virtual events, are available at www.dwt.com/COVID-19.