Two Boise startups have received more funding.
Melt Organic, which produces plant-based dairy products, received $350,000 from Sage Growth Capital, while Retrolux, a cloud-based software company for the lighting industry, received an unspecified amount from Ideaship to fund intellectual property development.
Sage Growth Capital, which launched July 1, 2019, is considered a revenue-based fund, which means investors are paid back out of the revenue the companies generate. The advantage of such a system is that repayments are flexible because they go up or down based on sales performance as opposed to a venture capital fund, where investors typically take a share of equity and participate in the company.
Thus far, Sage Growth has made one investment, $200,000 in Killer Creamery.
“It’s a small town, and we’ve all known each other for a long time,” said managing partner Kevin Learned, one of the founders of the Boise Angel Alliance, which funded the original company behind Melt in 2014. “We had discussions with Scott Fischer (Melt CEO) before we started Sage, about whether this type of financing might make sense.”
Melt, which already makes a line of plant-based butter products, will use the funding to help it develop its line of plant-based cheese products, Fischer said.
“Sage had the right funding vehicle for us at a time when we needed cash to grow,” Fischer said.
The company had intended to launch the cheese line at the Natural Products Expo West conference in Anaheim, California, in March, which was canceled due to the COVID-19 coronavirus. But the products are still on track: Two cheese spreads due in the fall, made of Idaho garbanzo beans and red lentils, with two hard cheeses to follow in the spring. Two of the products are a mozzarella style, while the other two are a cheddar style, Fischer said.
The company has been working on the “foundation cheeses” from which the other products will be made for almost a year in its laboratory, Fischer said.
“It took the longest amount of time to not have off flavors,” Fischer said. “Now we’ve got flavors that we can make into an infinite number of products.”
The fall products, which he described as a pub cheese spread, will be garlic herb from the mozzarella-style base and spicy jalapeno from the red lentil cheddar base, he said.
Melt has signed a contract with Chef’s Warehouse, a specialty food distributor, Fischer said.
“It’s a distributor to high-end restaurants,” he said. “When restaurants begin to open up, our butter will be sold in all of those.”
Melt also has private-label deals with six of the top 10 grocers in the country, he added.
Meanwhile, Learned noted that Sage isn’t limiting itself to dairy, or even food products.
“We’re delighted to help our food businesses scale, but it’s not our only investment,” he said.
The company has raised $2.1 million and has committed $650,000 of that, leaving it $1.45 million more to invest, he said. The firm has a term sheet out to another company that he hopes will result in another investment, he said.
Retrolux announced it has received an investment from Ideaship, a patent leveraged venture capital firm that provides patent development support for early-stage startups. Ideaship is a collaboration between Global Technology Transfer Group (GTT Group) and Panasonic Intellectual Property Corporation of America. The amount of the investment was not revealed.
“Retrolux is thrilled to receive an investment and strategic IP services from Ideaship. We’re confident this partnership will accelerate our innovation strategy while increasing the quality and value of the growing intellectual property we’ve developed and are committed to expand over time,” said Leif Elgethun, co-founder and CEO of Retrolux, in a statement. “We’ve excited to work with Global Technology Transfer Group, Panasonic and Stoel Rives LLP to strengthen our strategy and prosecute patents for high value innovations.”