Hero Bread, a maker of low-carbohydrate bread, tortillas and buns, has raised $15 million in a Series B financing round. It’s also expanding its grocery footprint, with distribution growing to about 2,300 retail stores by the end of the month from just 23.
(Bloomberg) — Hero Bread, a maker of low-carbohydrate bread, tortillas and buns, has raised $15 million in a Series B financing round. It’s also expanding its grocery footprint, with distribution growing to about 2,300 retail stores by the end of the month from just 23.
Investors in the round include former McDonald’s Corp. Chief Executive Officer Don Thompson’s firm, Cleveland Avenue, as well as DNS Capital, Union Grove Venture Partners and the D’Amelio Family Fund by 444 Capital. The total funding for the startup now amounts to $47.5 million. Its backers also include athletes Tom Brady and Kevin Durant.
The $15 million was a figure designed to support the company’s growth through the end of the year, founder and Chief Executive Officer Cole Glass said in an interview. But sales have thus far outpaced projections, and if that continues, another round of financing will come soon.
“If things are going better than what we planned, the rest of fundraising is going to go ahead of schedule as well,” Glass said.
Globally, fundraising for agriculture, food and related tech startups totaled $29.6 billion in 2022, a 44% drop from 2021, according to a report from investor and researcher AgFunder.
Hero Bread and Subway Restaurants Inc. have paused their partnership, Glass said, as Hero focuses more heavily on retail and direct-to-consumer sales online.
Hero makes its products by replacing standard flour with plant-based proteins and fibers, resulting in breads with 0 to 2 grams of net carbohydrates, compared with more than 20 grams of carbohydrates for a slice of conventional white bread. They’re also higher in protein.
Following its success in e-commerce and a small number of brick-and-mortar retailers, the company is set to launch in 32 states, including with Sprouts Farmers Market Inc. and in regional grocers Tom Thumb, Randall’s and Heinen’s. Albertsons Cos. will also sell Hero products across Texas and Louisiana.
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