How Immigrant Investors Are Rebuilding the U.S. Supply Chain
Coming from non-traditional backgrounds, immigrant and minority VCs are open to investing into overlooked niches. Three newly-established funds are aiming to foster sustainability within the global supply chain, which has recently been disrupted by the pandemic.
Brian Aoaeh, co-founder of REFASHIOND Ventures, a new early-stage fund, believes transforming supply chains has become the most attractive investment in the post-COVID era. According to Aoaeh, “Companies now understand just how fragile their supply chains are.”
The idea to focus on supply chain technology first emerged in the fashion industry, but Aoaeh and his co-founder Lisa Morales soon spotted an opportunity to expand it across all sectors. They announced the fund’s launch in March 2021, and are looking to raise $10 million.
“We bring early startup founders without deep background in the industry together with industry executives who don’t necessarily know how far the technology has come,” Aoaeh said.
Another new fund, Supply Change Capital, goes “beyond communities” and invests in “the third wave of everything else” — spices, beans, proteins, cocoa, and more. The fund’s co-founder, Normay Cadena, is the daughter of Mexican immigrants. She believes in supporting sustainable food brands created by multicultural founders.
Launched in 2020, Supply Change Capital focuses on a new wave of entrepreneurs who “aren’t using high fructose corn syrup in their ingredients.” Cadena and her co-founder, Shayna Harris, discovered that over the next two decades, the food industry’s investment potential will surpass $100 billion.
Supply Change Capital concentrates their efforts on food and foodtech for multicultural citizens. According to Nielsen, this demographic drives almost all of U.S. population growth. By 2045, minorities could become “the majority” of American citizens.
Food, organic ingredients, and maintaining a sustainable supply chain became the priority for another $25 million immigrant-run fund. Amadeo was launched in 2020 by Katya Kohen, a Russian emigre, and Diego Berrio, originally from Colombia. One of the fund’s early investments is LiveKuna, which works directly with Ecuadorian farmers to produce chia and quinoa snacks, as well as Apiterra, a New York-based raw honey company.
Katya Kohen noted that consumer brands with sustainable supply chains became a safe bet in a time of crisis. “In a recession, it’s important to buy a four-dollar coffee to comfort yourself: it’s the kind of luxury you can afford,” she said. “That is why most of our brands, especially long-lasting shelf products, such as honey and snacks, showed growth during COVID.”
Although new immigrant VCs have a unique vision, neither raising funds nor sourcing deals is easy. Running a VC fund as a Latina can be “a lonely place,” shared Normay Cadena, in an interview. “Latinos as a whole manage only about 1% of assets under management and venture capital, it’s a tiny number,” she added.
It’s important to differentiate your fund, believes Katya Kohen. After working on Wall Street for many years, she says she is used to being the only woman — and the only immigrant — in the room. “When we started fundraising and holding meetings, big investors would treat me like a little girl, but only before I opened my mouth to share our strategy and our approach to funding, a revenue-based model,” she added.
An immigrant background became a driving force behind Aoaeh’s efforts. He said he learned a lot about persistence and entrepreneurship from his grandfather, a farmer who comes from a small village in northern Ghana.
“As a young man, he suffered a debilitating illness, which left him with chronic rheumatoid arthritis,” Aoaeh said. “There are plenty of things you can’t control in farming, such as rain, but, remarkably, every year he had the biggest harvest in the village.” Thanks to this experience, Aoaeh is focusing on the things he can improve, not the uncertainty of the market.
Prior to launching REFASHIOND Ventures, Aoaeh and Morales developed a global support community and a network of 33,000 tech enthusiasts, called The Worldwide Supply Chain Federation. The organization started as a meetup in New York City. Soon, people from other cities and countries reached out, asking if they could set up something similar. Aoaeh realized that international founders were looking for networks they could tap into while launching their businesses in the U.S. His fund is now planning to source deals from this international community.