Accelerator’s New Venture Fund Helps Farm Businesses Grow

In early 2018, KoHana Hawaiian Agricole Rum, a small Kunia distiller, joined Mana Up in the first business accelerator cohort of 10 start-ups based in Hawaii looking for help growing their businesses.

Less than four years later, KoHana and Mana Up are teaming up again in the accelerator’s latest big project, Mana Up Capital: a $ 6.3 million venture capital fund for Hawaii-based companies in looking for money to help them develop.

Mana Up Capital’s investment, in the range of $ 100,000 to $ 600,000, will allow the rum company to produce 70,000 to 80,000 cases per year in 2022, up from 10,000 this year, said the co-founder of KoHana, Jason Brand.

But for Brand, working with Mana Up isn’t all about money. It’s also about being part of something bigger – an organization that works to grow and diversify Hawaii’s economy by creating businesses that share the culture of Hawaii.

Hawaiian Agricultural Rum Distillery Kohana manager Tyler Johnson stands with the
KoHana Hawaiian Agricole Rum Distillery Manager Tyler Johnson stood with one of the company’s stills on Wednesday; the company will soon expand its operations thanks to an investment from Mana Up. Cory Lum / Civil Beat / 2021

“We love Mana Up’s message to the community,” Brand says. “We want to be part of it. “

Although Mana Up has built its reputation as a business accelerator and showcase for Hawaiian businesses, it has always considered providing corporate finance as well, co-founders Meli James and Brittany Heyd said in an interview. In fact, James, who started a successful wine app in San Francisco before returning home to Hawaii, is also president of the Hawaii Venture Capital Association. Heyd, a lawyer and accountant, had worked with 1776, a business incubator in Washington, DC, which also operates a fund, 1776 Companies.

Cultivated hawaii

But they both knew that starting a fund would take time, so they first started with the Business Accelerator, which helps companies find ways to grow and overcome the challenges of growth, such as sourcing, manufacturing and shipping.

In the short time since its inception, Mana Up has helped 63 companies. According to a Mana Up report released in September, these companies generated $ 43.4 million in 2020, up from $ 36 million in 2019. In addition, $ 18.5 million of that revenue came from outside of Hawaii. , in part thanks to the ability of companies to quickly change course. to e-commerce during the pandemic. In addition to value-added food products, Mana Up supports businesses manufacturing clothing, home furnishings, and health and beauty products.

Mana Up’s rapid success comes as no surprise to those who know its founders.

“Keep in mind that Meli has a lot of experience,” said Carl Bonham, executive director of the University of Hawaii’s Economic Research Organization. “It’s not the first time she’s been around the block.”

Meli James owns some of the
Meli James, co-founder of Mana Up, recently showcased products from some of the business accelerator’s 63 companies at her retail store, House of Mana, at the Royal Hawaiian Shopping Center. “We didn’t know if this was going to work,” she says now of the accelerator. Cory Lum / Civil Beat / 2021

For their part, James and Heyd say their research and experience has shown that Hawaii brands have a competitive advantage simply because people around the world have an affinity for the islands. With this in mind, Mana Up has chosen to work with companies that are deeply connected to Hawaii: 100% are headquartered here, 88% manufacture in Hawaii, and 48% are owned by native Hawaiians. In addition, 60% source local raw materials, in line with Mana Up’s mission to support Hawaiian agriculture.

“The unfair advantage is a global awareness and love of Hawaii,” she said.

At the same time, James says, he wasn’t sure that just providing training and mentoring could suddenly make young Hawaiian brands thrive.

“We didn’t know if this was going to work,” she said.

Some Hawaiian Brands Can’t Just Go

With the accelerator working, the venture capital fund was the next step. The fund’s first two investments are KoHana and Big Island Coffee Roasters, both based on Hawaii’s historic cash crops.

James and Heyd declined to say which companies Mana Up Capital might invest in next, but a press release accompanying the fund’s announcement said it would “invest primarily in companies that have gone through the Mana Up accelerator.”

Mana Up Capital has raised funds from public and private institutional investors as well as individuals. He plans to make 15 investments over the next three years.

For KoHana, the investment means he can buy a host of equipment, including presses used to extract juice from the cane stalks. KoHana now owns more than 300 acres of land in Kunia and Waialua where she grows heirloom varieties of sugarcane from canoe plants brought in by Polynesian travelers who settled in Hawaii, Brand said. KoHana also has 40 acres where he grows cocoa used for something he calls Kokolekai, a rum flavored with raw honey and cocoa.

All of this means KoHana is in Hawaii to stay, Brand says. Some Hawaii brands, like Kona Brewing Co., found that it made more economic sense to make beer on the mainland for distribution there, rather than ship empty bottles to Hawaii, make beer here, and then send bottles back full on the mainland. It just wouldn’t make sense to distill KoHana on the mainland, Brand said.

“One hundred percent of our ingredients are grown in Hawaii,” Brand said. “So we’re really a local business. “

Hawaiian Agricultural Rum Distillery Kohana Director Tyler Johnson checks a batch of rum as it distills through the
Hawaiian Agricultural Rum Distillery Kohana Director Tyler Johnson checks a batch of rum. Cory Lum / Civil Beat

The rest of Mana Up will likely depend on the new needs of the Accelerator and its businesses. A showcase event for Mana Up businesses, once planned as an in-person event in November to kick off the holiday shopping season, will now be held virtually, broadcast live and broadcast in Hawaii and San Diego. Last year’s showcase drew 198,000 spectators.

And James and Heyd say they are taking on some challenges. For example, settling in Japan turned out to be more difficult than expected. And as Mana Up’s businesses have grown, some are struggling to recruit new workers – an issue Mana Up hopes to help them solve.

In the meantime, folks like Bonham from UH praise Mana Up for focusing on businesses that are uniquely Hawaiian – which really can’t be done elsewhere – and then putting in place the parts, including capital, needed to help. businesses to grow. But, he said, building a major consumer goods industry in Hawaii won’t happen in a few years.

“It kind of shows what we’ve been talking about for a while,” he said, “which is to say it takes time.”

Hawaii’s Changing Economy»Is supported by a grant from the Hawaii Community Foundation as part of its CHANGE Framework project.

Cultivated hawaiiIs funded in part by grants from the Ulupono Fund of the Hawaii Community Foundation, the Marisla Fund of the Hawaii Community Foundation, and the Frost Family Foundation.

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