Consumer-brands-focused Stride Consumer Partners LLC, a new private-equity firm that launched its fundraising efforts in the middle of the pandemic, raised $420 million for its debut fund, outpacing a $300 million target.
The Waltham, Mass.-based firm was formed in 2019 by private-equity veterans who decided to leave another firm, Castanea Partners, when Castanea’s founders retired. Stride is principally owned by Partner Steve Berg and is managed by him and two other partners, Tim Burke and Juan Marcos Hill, according to a regulatory filing.
Castanea had backed consumer-focused companies including Essentia Water LLC, acquired by Nestlé SA last year, and makeup brand Urban Decay, bought by L’Oréal SA a decade ago.
Creating Stride “gave us an opportunity to continue on but to do it under a different banner and in a way that felt natural to me,” Mr. Berg said. “The forming of Stride wasn’t a major shift but more of a continuation of what we had already been doing as a group.”
The partners were building on the time they spent together at Castanea, where Messrs. Berg and Hill worked for 17 years and Mr. Burke for five years.
But launching a consumer-brand-focused fundraising process in the midst of the pandemic wasn’t easy, according to Mr. Berg. The team outfitted a recreational vehicle to bring their marketing pitch to investors who were agreeable to a face-to-face meeting outdoors. Over the course of two weeks in the summer of 2020, Messrs Berg, Burke and Hill covered 4,400 miles in the RV and met nearly 25 potential investors in parking lots, shopping centers and backyards to explain their vision for Stride, according to Mr. Burke.
A quarter of the investors they met during the road trip committed capital to the debut fund, Mr. Burke said.
The RV roadshow, which covered the Midwest and the East Coast, was a “good story” but there was a “seriousness to the mission,” Mr. Burke said. “Investors worry about team formation risk, and not only had we worked together for a long time, but if you can spend 60 to 70 hours together in a van together, that helps answer some questions.”
Stride makes investments ranging from $10 million to $150 million in companies in five main areas: food and beverage, beauty and personal care, active lifestyle brands, multi-unit consumer services such as hair salons, and direct-to-consumer products and services. Target companies typically generate between $10 million and $150 million in revenue, according to the firm’s website.
The firm made its first investment in Skinfix Inc., a Canadian skin-care company that had been at the top of a list Stride had made of potential skin-care-brand acquisition targets, according to Mr. Berg.
Because Stride had done a lot of research on the skin-care market, its first meeting with Skinfix’s founder and chief executive, Amy Gordinier, wasn’t a one-way presentation but rather an in-depth conversation about Skinfix’s story, the trajectory of its business and what was on the CEO’s mind, as well as some of Stride’s own first impressions, Mr. Berg said.
Stride has also invested in Naples, Fla.-based meat-snacks manufacturer We Are The Chompians LLC, which does business as Chomps, and Denver-based Truewerk Inc. which makes performance work clothes for blue-collar employees, such as water-resistant pants.
Write to Preeti Singh at [email protected]