Boston Business Journal
By Kyle Alspach
Raptor Consumer Partners, a Boston-based growth equity firm focused on consumer businesses, planned to announce its second investment this morning since launching quietly a year ago — and in both cases, the investments are for local companies.
Raptor Consumer Partners has invested an undisclosed sum into Natick-based women's clothing maker Nic + Zoe, whose apparel is sold at Nordstrom and 800 specialty retailers in the U.S. The company is seeing more than $40 million in annual revenue, and hopes to expand to north of $200 million through the new funding and growth plan, said John Burns, managing director at Raptor Consumer Partners.
The firm, whose chairman is Boston Celtics minority owner James Pallotta, has been operating under the radar since making its initial investment last summer.
That investment was into Boston's Unreal Brands, which is selling a line of healthier candy at retailers such as CVS. The investment came to light last week when company co-founder Michael Bronner, previously the founder of Digitas and uPromise, publicly talked about the firm.
Burns said that early-stage companies such as Unreal won't be the norm for Raptor Consumer Partners' investing activities. "Our focus is on businesses with $50 million or less in revenue, and only investing in startups by exception," Burns said. "The earlier we go, the more explosive the growth opportunity has to be."
Bronner said the company's line of candies — which has half the sugar and 23 percent less calories than typical brands — is launching in 30,000 stores this summer. Unreal plans to follow up with products for other junk food categories, with the ultimate goal of improving health outcomes in the U.S., he said.
At Raptor Consumer Partners, the firm's third investment is also going to be into a Boston area company, which should be announced within weeks, Burns said.
"The greater Boston area in general has never been perceived as a hotbed for consumer businesses," said Burns, who previously was a founding partner at Highland Capital Partners' affiliate Highland Consumer Fund. "But in the 21st century, you can really operate a business like this from a city like Boston."
Future investments, however, will be made into companies located around the U.S., Burns said.
Raptor Consumer Partners has been seeking to raise a $100 million fund, according to a U.S. Securities and Exchange Commission filing from December.
The fund is an affiliate of Pallotta's Raptor Group Holdings, and is a separate fund from Raptor Ventures, an early-stage VC fund also affiliated with Raptor Group and chaired by Pallotta. Raptor Ventures has been seeking to raise a $75 million fund, according to an SEC filing, and has disclosed eight investments including an investment into Cambridge apparel "pre-tailer" Krush.
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