Builders Fund invests in Traditional Medicinals, closes on $30 mln


The Builders Fund made a minority investment in Traditional Medicinals, which sells wellness tea in the U.S. Builders Fund, which brings an ESG focus to its investments, also announced it closed on $30 million of fund commitments and expects to hold a final close in mid-2017. Traditional Medicinals is Builders Fund third investment.

Press Release

The Builders Fund, a private equity fund that invests in high-growth, purpose-driven businesses that generate both social/environmental benefit and attractive financial returns (“Builders”), today announced that it has made a minority investment in Traditional Medicinals (the “company”), a leading seller of wellness tea in the U.S. and the pioneer of the wellness tea category in the U.S. and Canada.

Builders is the first non-friends/family investor in the company’s 40 year history, and will support the company’s commitment to remain independent while continuing to build long term value for all its stakeholders. Traditional Medicinals plans to use the proceeds from the investment to support its growth and provide liquidity to employee shareholders. The Builders Fund also announced today that it has closed on $30 million in fund commitments and expects to hold a final closing for the vehicle in mid-2017.

Traditional Medicinals is the third investment for Builders. The fund is managed by Tripp Baird, Mike Dutton and Eric Jacobsen, each seasoned investment professionals and entrepreneurs with strong operational expertise who are committed to leveraging the power of business to help solve social and environmental problems through investments that also generate market rate returns for investors.

“The majority of impact-focused capital to date has flowed to emerging markets, in North America to real assets and to venture capital, leaving an enormous opportunity within small-cap buyout and growth stage private equity investing that our expertise and scale is uniquely positioned to fill,” said Tripp Baird, managing partner of The Builders Fund. “Traditional Medicinals was among the first wave of natural/organic food brands, which has grown at 5x the rate of the broader food industry over the last two decades. They have simultaneously been thinking systemically about environmental, social and government factors (ESG), and shared value creation long before those terms were even coined. They have been living the ethos for 40+ years, and represent exactly the kind of ‘systemically-aware’ businesses we seek to partner with and help build.”

Founded in 1974, Traditional Medicinals’ decades of success is the result of its industry leadership, promotion of herbal education, commitment to social and environmental sustainability, support for organic and fair certification and advocacy for pharmacopeial standards. The company has grown with integrity, providing health conscious consumers with affordable access to safe and effective herbal products.

“Traditional Medicinals is proud of its long commitment to independent ownership, and the investment by The Builders Fund will enable us to continue along this path, which is essential to our company’s values, brand and to our success,” said Blair Kellison, CEO of Traditional Medicinals. “The Builders Fund brings significant industry knowledge and operational expertise that will help us continue to reach consumers who believe in the power of plants. As an independent company, it was a challenge to find patient investors who valued the long-term potential of our business and also shared our mission aligned philosophy.”

Both Builders and Traditional Medicinals are certified B Corporations and were each recognized last year for scoring in the top decile of B Corps from certifier, B Labs.

Builders takes an operational approach to its investments, and its limited partner group is composed of 40 LPs, most of whom were C-level operating executives and entrepreneurs – “builders” – in their respective fields and are committed to providing intellectual capital in addition to their investment dollars to the fund’s investments in the service of building high growth, mission-driven businesses that can win in the marketplace. Builders focuses investments across three primary themes: sustainable food and agriculture; health and wellness; and resource efficiency – businesses whose fundamental business models create societal benefits such that as the companies scale to generate market-rate returns, they also scale positive social and environmental impact.

Gratitude Railroad is among the founding investors and its principals serve on the investment committee for Builders. Gratitude Railroad partners with investment managers with deep experience in traditional capital markets who possess a desire and capability to build institutional grade investment platforms delivering top tier returns and positive impact.

About The Builders Fund

The Builders Fund is a growth-stage private equity fund investing with an impact lens in North America around themes of sustainable food and agriculture, health and wellness, and resource efficiency.  The fund partners with accomplished, impassioned management teams building authentic brands and cultures around purpose greater than the profit motive alone. The fund is managed by Tripp Baird, Mike Dutton and Eric Jacobsen, each seasoned investment professionals and entrepreneurs with strong operational expertise who are committed to investing in and building scalable and purpose-driven businesses which improve the world while generating market rates of return for investors. The fund targets investments of $5 million-$15 million in businesses that are profitably generating $10 million-$100 million in revenues. Builders has made three investments to-date in The Bar Method, a 105 location chain of women-owned fitness franchises; Urban Remedy, which re-imagines fast food through local / sustainable supply chains and fresh, organic, plant-based ingredients; and Traditional Medicinals, the leading seller of medicinal and wellness tea in the U.S. with significant social impacts through its 45 country supply chain.

About Traditional Medicinals
Traditional Medicinals, Inc., a Certified B Corporation and California Certified Green Business, is a leading seller of wellness tea in the U.S. and the pioneer of the wellness tea category in the U.S. and Canada. Traditional Medicinals is also the leading seller of both organic tea and Fair Trade Certified™ herbal teas in the U.S. and Canada. The company is passionate about connecting people with plants and sharing centuries-old wisdom of how to use them. Their more than 50 high quality wellness teas are formulated by herbalists using pharmacopoeial grade herbs. This is one of the defining qualities that sets Traditional Medicinals apart from other tea brands. Founded in 1974, Traditional Medicinals is an independent company that embraces sustainability, ingredient purity, and social and environmental activism. For additional information, visit www.traditionalmedicinals.com.

About Gratitude Railroad

Gratitude Railroad is a community of investors and alternative investment platform that seeks to deliver top tier returns from investments in enterprises that solve social and environmental challenges. We believe that purpose-driven entities can deliver competitive and even superior market rate returns, and that businesses committed to “conscious capitalism” will ultimately be among the most successful. We are founded by a group of experienced investment professionals and entrepreneurs who seek to build a community of like-minded investors committed to driving capital to businesses that seek to achieve positive social and environmental impact without sacrificing financial returns.

Do you want exclusive news and analysis about private equity deals, fundraising, top-quartile managers and more? Get your FREE trial to Buyouts! Or subscribe now!