Despite the challenging environment for businesses seeking continued outside investment, Summerland-based Kate Farms announced Monday that the company received $75 million during its Series C funding round.
The company previously raised a total of $83 million during its Series A ($23M) and Series B ($60M) funding rounds in 2020 and 2021 respectively.
Kate Farms produces organic, plant-based medical formulas for children and adults that can be used as a sole source or as supplemental nutrition for oral and tube feeding. They also created the first and so-far only organic and plant-based closed-system hanging bag, which is used to deliver the company’s formulas to patients in hospital settings.
This most recent round of funding was led by Denmark-headquartered Novo Holdings, a leading international investor in life sciences, and included investments from Goldman Sachs Asset Management, Kaiser Permanente Ventures, and Santa Monica-based Main Street Advisors.
J.P. Morgan acted as Kate Farms’ sole placement agent, while Latham & Watkins LLP served as counsel to the company during the transaction.
“Michelle and I started Kate Farms to help our daughter, Kate, who was failing to thrive,” Kate Farms co-founder Richard Laver wrote in a news release. “This investment from Novo Holdings and other notable investors is a milestone and a market validator that the product we created for Kate has helped so many. We are confident that Kate Farms will continue to create breakthrough nutritional products to help patients thrive.”
Kartik Dharmadhikari, a partner at Novo Holdings, further lauded the organization’s investment as a means to support both the mission of Kate Farms and advance Novo’s investing philosophy.
“We are pleased to partner with Kate Farms and support them in their efforts to meet the nutritional needs of numerous patient populations,” Mr. Dharmadhikari said in the news release. “We believe our life sciences heritage can serve the company well as it explores additional ways to utilize science and clinical evidence to support plant-based clinical nutrition. Furthermore, this investment aligns seamlessly with our purpose of improving people’s health and the sustainability of society and the planet.”
This latest round of funding comes on the heels of a productive year for Kate Farms, which included launching 13 new products since the first quarter of 2021, expanding product availability to 95% of American hospitals and assisting healthcare professionals and parents identify appropriate replacement formulas during the nation-wide baby formula shortage. Milestones also included establishing the company’s first Innovation and Quality Center, which is set to begin operations later this month in Goleta.
Brett Matthews, the chairman and CEO of Kate Farms, said the funding acquired through the Series C offering would allow the company to roll out new products and expand its footprint in the plant-based nutrition market.
“Our brand has deeply held values, which means that finding the right investment partners is a critical choice for us,” Mr. Matthews said. “Novo Holdings’ investment in Kate Farms will allow us to develop more innovative products, enter new markets and continue to serve the patients who depend on us for their nutrition, as well as thousands of healthcare providers.”