Hillhouse and VMG launch $100 mln fund

Hillhouse Capital and VMG Partners have launched a $100 million fund that will invest in consumer brands. So far, Hillhouse and VMG have made an undisclosed investment in Little Freddie, a maker of European organic baby food.

PRESS RELEASE

SAN FRANCISCO–(BUSINESS WIRE)–Hillhouse Capital, a leading Asia-based investment firm focused on long-term growth through innovation, and VMG Partners, a private equity firm specializing in building iconic consumer brands, today announced a strategic partnership to co-invest in innovative consumer brands with differentiated offerings looking to expand their global reach. The two companies have allocated up to $100 million toward investments in high-potential brands in the sector.

As the first step of the expanded cooperation, Hillhouse Capital and VMG Partners have closed an investment in Little Freddie, a leading maker of premium European organic baby food. Founded in 2014 by husband and wife duo Piers Buck and Taslim Ho, Little Freddie’s mission is to make it easier for parents to access organic and nutritious baby food options for their children. Piers and Taslim believe that exceptional ingredients are the foundation for great food—Piers personally visits the farms they source from to ensure nothing but the very best goes into each and every product.

Since the brand’s inception, the business has grown to a full roster of products, including pouches, cereals, and snacks for children. Little Freddie products are widely available in China, including in-store at Sam’s Club, as well as online at T-Mall and JD.com. In the UK, their products can be found in-store at Boots, as well as online at Ocado, Amazon and Tree of Life. Little Freddie has been particularly successful expanding through e-commerce and leveraging big data to better understand consumers habits. The investment will be used, in part, to help drive further expansion in both China and the UK.

“We are very pleased that this investment marks the latest step in our expanding cooperation with VMG to help brands leverage innovation to fuel their global expansion,” said Lei Zhang, Founder of Hillhouse Capital. “Our previous collaborations with VMG on Ancient Nutrition, Solid Gold and Stone Brewing show the tremendous potential of brands that understand the value of offering consumers a truly differentiated experience.”

“We are thrilled to be working closely with Hillhouse Capital to create globally reaching, impactful consumer product companies, building upon the success of our previous collaborations,” said Mike Mauzé, Founding Partner and Managing Director at VMG Partners. “Hillhouse has unparalleled expertise in the Asian market and we are honored to be working collaboratively with their team in this long-term partnership.”

“Little Freddie is a high-quality, trusted brand that has tremendous potential in Asia and other parts of the world, as parents have become increasingly savvy about what they feed their children,” said Cao Wei, Partner at Hillhouse Capital. “We strongly believe that brands able to identify and meet unique and unmet consumer needs will excel in the new and rapidly changing retail landscape.”

This investment marks Hillhouse Capital and VMG Partners’ fourth joint investment, and the first made under their new agreement. Leveraging the unique experiences and expertise of both organizations, these previous investments have resulted in significant international development internationally, exemplified by Stone Brewing’s entrance into the Shanghai market. Future investments under the agreement will employ the perspective and resources that Hillhouse and VMG each offer to elevate brand growth and accelerate success.

“We are thrilled to partner with Little Freddie, a brand that resonates so strongly with the mission and vision of VMG, and our experience in the food and mother and child market segments,” said Kara Cissell-Roell, Founding Partner and Managing Director at VMG Partners. “The company delivers exceptional, organic ingredients, an authentic brand story and an extraordinary growth potential in Asia and beyond.”

Hillhouse Capital has built its reputation as the premier investment firm building innovative companies for long-term success. With a global mandate and an Asia focus, the company has demonstrated a unique ability to identify entrepreneurs able to redefine their industries through differentiated offerings and by using technology to change how they engage consumers. Hillhouse’s deep bench of operational executives and technology experts provide portfolio companies a unique set of resources to help drive growth and manage challenges at every stage of development.

VMG Partners, a private equity firm that specializes in investing in and building iconic branded consumer product companies within the food, beverage, pet food, personal care, and wellness categories, has an impressive track record within the consumer products space, including brands such as babyganics®, KIND, Quest, and more.

About Hillhouse:
Hillhouse builds businesses that stand the test of time. With a base in Asia, we look for opportunities around the globe, and have the flexibility to work across the equity spectrum, from seed investments to buyouts. Our team deploys technology to drive innovation, with sustainable, long-term growth as the ultimate goal. Over more than a decade, we’ve worked alongside iconic companies that have redefined their industries, including Airbnb, Beigene, Belle International, Liangpin Puzi, Didi, iQiyi, JD, Meituan, NIO, Peet’s Coffee, Tencent, Traveloka, Uber, and WuXi AppTec.

We believe investing and entrepreneurship are two sides of the same coin. Hillhouse not only provides a strategic source of capital to a select group of extraordinary founders, but our teams also incubate, build and operate a number of consumer and healthcare platforms. Hillhouse businesses and operating teams employ thousands of engineers, e-commerce experts, brand managers, talent professionals, and many others. We manage capital on behalf of global institutions such as non-profit foundations and pensions, and we are proud that our efforts help support educational scholarships, scientific innovation, and artistic achievements across the world.

About VMG Partners:
VMG Partners is focused solely on partnering with entrepreneurs and managers to support the growth and strategic development of branded consumer products companies in the lower middle market. Since its inception in 2005, VMG has provided financial resources and strategic guidance to drive growth and value creation in more than 25 companies. VMG’s defined set of target investment categories includes food, beverage, personal care, pet products and wellness. Representative past and present partner companies include Ancient Nutrition, babyganics®, Bare Snacks, Colorescience, Daily Harvest, Drunk Elephant, Health Warrior, Humm Kombucha, Justin’s, Kernel Season’s, KIND Healthy Snacks, Lantana Foods, Mighty Leaf Tea, Natural Balance, Nature’s Bakery, Lily’s Sweets, Perfect Bar, Pirate’s Booty, Pretzel Crisps®, Quest, SMASHMALLOW, Solid Gold, Spindrift, Stone Brewing, Sun Bum, Vega, Vermont Smoke and Cure, and Waggin’ Train. VMG Partners is headquartered in San Francisco. For more information about the fund please visit www.vmgpartners.com.

About Little Freddie
Exceptional ingredients are at the core of everything that Little Freddie does. We believe children who start with tasty, nutritious food will become food-loving children and get off to a great start in life. That’s why we travel the world searching for the very best ingredients to develop great tasting baby food which helps families feel confident with food and flavours.