When Siddhi Capital’s Melissa Facchina started working in her family’s juice manufacturing businesses at a young age, she got hooked on how to be an efficient operator.
As she grew up, she saw how the food system was changing: More people starting to demand transparency in the supply chain and caring about better quality ingredients and products.
“Big CPG (consumer packaged goods) wasn’t really solving for that, and I put my family business in the big CPG bucket by way of manufacturing,” Facchina said.
She left the company in the early 2010s and launched her own company called Siddhi Services, which is an outsourced operating consultancy firm. It went on to be part of more than 500 food and beverage builds and part of 93 companies that successfully exited.
“We were basically ‘guns for hire,’ and would go into companies to solve scaling problems,” she said. “That got us a lot of attention with investors, and I started to realize what I thought was an unhealthy relationship forming between the investor and the investee.”
Facchina would see investors making what she thought were impractical demands on companies, for example, asking them to do something that they couldn’t do in timeframes that they couldn’t do it in. Mainly because the company didn’t know how to scale a CPG business, she explained.
When the desired outcomes didn’t materialize, the investor would ding the company’s valuation or want a change in management. What Facchina then saw were companies lying to their investors and boards because they were afraid of the outcome. She thought there might be a better way.
Enter Siddhi Capital, an operationally focused growth equity firm investing in the food and beverage industry. The firm’s portfolio includes brands like Aura Bora sparkling water, Thistle food delivery, chocolate snack company Mid-Day Squares and cereal maker Magic Spoon.
Facchina co-founded and shares a managing partner title with Steven Finn, who has led hundreds of investments through his family office. Together with a team of 24, the 4-year-old firm raised a nearly $ 70 million Fund I with the help of Finn’s father, Brian Finn, who is now Siddhi’s chairman. Previously, he was the former CEO of Credit Suisse USA.
Being an emerging fund manager has not been a picnic over the past four years. And for women-led funds, it’s even more difficult: Women-led funds’ share of total fundraising increased to about 3% of the $ 107 billion raised last year by venture funds worldwide, according to Venture Capital Journal.
Facchina didn’t have those challenges, though, because that first fund was closed in an hour. Yes, you read that right. She admits that much of that was due to Brian Finn’s influence and high-net-worth individual friends.
“I can’t say them by name, but some of the most notable personal investors in the world have invested in us,” she said. “I could never have done that on my own. The proof is in the pudding that when you marry two really good sets of skills together, people pay attention.”
Siddhi recently closed on a $ 135 million Fund II that didn’t take an hour to close. In fact, it took two years to close. However, roughly 98% of the limited partners reinvested in the second fund, Facchina said.
Much of that was due to launching the fund just as the Ukraine war with Russia was happening. The firm “was very fortunate that our current investor group believed in what we were doing and was happy with the trajectory of Fund I,” though she didn’t think it would take two years.
The firm did invest during that time, adding 10 companies into the fund, including lab-grown protein ingredient company Ingrediome and recombinant protein producer Future Fields,
Siddhi Capital’s first fund went into 40 more early-stage companies, but Fund II will focus on deploying more money into fewer companies at a more growth equity stage. Facchina expects to invest $ 5 million to $ 10 million into companies making between $ 25 million and $ 100 million in revenue.
A majority of the investments will go into consumer packaged goods companies and a small portion into food tech companies working in areas like fermentation and cellular agriculture.
