The venture-capital arm of General Mills is investing in kale chips for the second time since last January.
301 Inc., the General Mills group that invests in start-up food companies, is leading a $6 million funding round for Rhythm Superfoods, an Austin, Texas-based maker of beet chips, broccoli bites and other dehydrated vegetable-based snack foods. General Mills, based in Golden Valley, was lead investor on Rhythm’s $3 million funding round a year ago.
In 2015, General Mills changed 301 from an in-house innovation group to a venture capital group. The maker of Cheerios and Fiber One bars realized it couldn’t out-innovate the rising number of small food start-ups popping up across the United States.
Instead, 301 now invests in existing early-stage companies to help them gain size and efficiency. The goal is to test the staying power of these small food companies and, if the product aligns with General Mills’ existing stable, to make them acquisition targets before the valuation balloons.
Blueberry Ventures and CircleUp Growth Fund were also investors in this funding round. Rhythm has had four rounds of seed investments in an attempt to grow and achieve profitability.
“With the expanded support and resources of General Mills behind us we have confidence that we will continue to be the leader in developing innovative plant-based superfood snacks for our growing consumer base,” said Scott Jensen, chief executive of Rhythm Superfoods, in a statement.
Since 301’s first investment, Rhythm grew into new markets and distribution channels as well as adding dehydrated beet chips.