Big Idea Ventures’ GFRP Fund Acquires Edible Packaging Startup DisSolves

Today, Generation Food Rural Partners I, LP (GFRP), a member fund that is part of the food tech investor Big Idea Ventures (BIV) family, has announced its acquisition of DisSolves, Inc., a Pittsburgh-based maker of biodegradable and edible packaging solutions.

With this deal, GFRP gets a patented technology that utilizes GRAS (Generally Recognized As Safe) biodegradable and edible components to create films and packaging materials. That technology is what’s behind Dissolves’ first product, a polysaccharide-based film that can be used to package up individual servings of powders, baby formula, and instant coffee, which can then be dropped into liquids (like water, milk, or coffee) where it will dissolve and not alter the taste.

“Our partnership with GFRP will accelerate our efforts, allowing us to implement pilot programs with leading food producers and move towards scaled manufacturing of all-natural dissolvable food packaging,” said DisSolves founder Jared Raszewski. You can see Raszewski explain how the product works in the video below.

If a fund acquiring a startup to commercialize and scale sounds a little different than the typical way a venture deal works, you’re right. However, according to BIV Chief Investment Officer Tom Mastrobuoni, GFRP was created to build companies from scratch and commercialize them. The only difference with DisSolves, said Mastrobuoni, is that they didn’t need to start from zero, validate the technology, or find a founder. DisSolves provided all that off the shelf.

The typical BIV model “is we are starting a company from the ground up,” said Mastrobuoni. “The Investment Committee usually approves the first million dollars to be deployed into that company, and that’s done because we’re bringing on a new CEO, we’re doing techno-economic analysis of IP. We want to make sure what we’re actually building is what we thought we were going to be building during the IC (investment committee) process.”

Mastrobuoni says from there, the GFRP IC has a second phase where it will approve a $3-$5 million capital investment that enables it to take that initial company and product foundation and get it from sort of prototype to minimally marketable products, all the while utilizing shared resources across the BIV family such as fractional CFOs and manufacturing expertise. Since DisSolves already accomplished what is usually done with the first round of capital, GFRP and DisSolves will be able to move right away to this second phase of capital deployment to enable commercialization scale-up.

DisSolves appealed to GFRP and BIV because the fund saw an opportunity within a growing space of more sustainable packaging where there haven’t been any established winners, particularly in the single-serve segment. Mastrobuoni says that as bigger food brands begin to realize the difficulty of reaching their corporate sustainability pledges over the next 5 to 10 years, they’ll begin to embrace technologies like those from DisSolves, which can solve a lot of the single-use serving packaging that ends up in the waste stream.

“A lot of these corporates have made 30 by 30, 25 by 25 promises,” said Mastrobuoni. “And it’s going to be interesting when those years hit to see how many of them have actually hit those numbers, not by buying carbon offsets but actually achieving reductions in their footprint.”

While the terms of the deal were not disclosed, Mastrobuoni’s guidance suggests the company was probably valued at around $1 million or so. Raszewski will continue with the company as Founder & Chief Product Officer, and GFRP will install Scott Bolin, the founding CEO of another BIV portfolio company in Terrasafe (which also makes sustainable packaging), as president of DisSolves. Bolin will also continue in his role with Terrasafe.

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