BOULDER — Sunrise Strategic Partners, launched in February by Boulder Brands cofounder Steve Hughes, on Tuesday announced its third investment in a Colorado-based company, this one a former Boulder County firm aiming to shake up the supermarket meat aisle.
Sunrise’s investment was part of a Series C round of funding for Denver-based Teton Waters Ranch, which makes sausages, hot dogs and chili from grass-feed beef.
Teton founder Jeff Russell declined to disclose the size of the round, in which investment firm Armonia also participated. But Hughes said Sunrise’s contribution falls in line with his firm’s window of making individual investments of between $10 million and $25 million. Hughes will also join the Teton Waters Ranch board of directors.
The round comes on the heels of a $2.3 million raise closed in December.
Russell founded Teton Waters on a 6,000-acre ranch in Idaho in 2009. But seeking to gain better access to beef-distribution networks, he opened a Longmont office and began slaughtering cattle in Denver in 2012, with the whole company eventually moving to Colorado in the fall of 2013. The company spent about eight months in Boulder before a move to Denver in 2014.
It was also in late 2013 when Teton Waters officials decided to transition away from fresh beef such as steaks in favor of packaged items. While there were lots of grass-fed brands to compete with at the fresh-meat counter, Teton Waters discovered the packaged category to be largely untapped.
“It’s pretty clear that the grassfed segment is white-hot, and Teton Waters is kind of the only name in town (as far as packaged options),” Hughes said.
The transition has been a gradual one, with Teton Waters selling its last fresh beef in January of this year. But packaged sales have been growing rapidly since late 2014. The company’s products are sold in King Soopers, Natural Grocers, Sprouts and Costco.
Russell declined to disclose specific sales figures, but said he expects revenue to quintuple this year. Teton Waters’ employee count, meanwhile, has already done so, growing from 10 to 55 just since October. The company is in the process of moving its headquarters from its current Denver location to a spot near Union Station.
Sunrise’s investment is its second in a company selling premium meats, following an investment in Greenwood Village-based Perky Jerky LLC in March. But Hughes said that’s mostly a coincidence, as Sunrise tries to find brands with “differentiated values that really resonate with millennials. Sunrise’s first investment was made in Boulder-based PACT Apparel, which focuses on sustainably and ethically made clothing.
But Hughes, who cofounded Sunrise with New York private-equity firm Trilantic North America, said the similarities between Perky Jerky and Teton Waters have already reaped some rewards.
“I think there’s going to be some pretty nice synergies as each of these guys deal with particular issues,” Hughes said.