Alternative rice producer Fullgreen has launched yet another fundraising round to underpin its push into the US and compete in the booming free-from sector.

The Cauli Rice maker is seeking £600,000 on Crowdcube, valuing the company at £21m. Within days of its launch, more than 260 investors had piled in, with the three-year-old business pocketing £457,620 at the time of going to press.

The drive is Fullgreen’s seventh crowdfunding round, taking the total secured since 2014 to over £5m from more than 2,000 investors. It is currently offering a stake just short of 3% but has not excluded overfunding for more equity.

Co-founder Gem Misa-Harris told The Grocer this was likely to be its last crowdfunding round. “We want to get to a level where we don’t have to give away too much equity,” she said.

Fullgreen, which rebranded in December from Cauli Rice to better reflect its broadening portfolio, is planning to use the funds to accelerate its expansion in both the UK and US. In the US it is seeking to double its distribution points within 12 months.

“We are seeing a big plant-based trend for people who are trying to eat more vegetables and trying to swap out things like meat and grain with plant-based alternatives and that’s what drives our expansion plan,” Misa-Harris said.

“Companies like Impossible Foods, Beyond Meat and Ocean Hugger are attracting significant investment from some really high-profile individuals and we believe Fullgreen’s proprietary technology is as innovative as any of these companies.

“What we aim to do is try to get into as many stores as possible. We want to make our mark and we see our brand as being on the same level as other big plant-based brands out there.”

The funds will also underpin the creation of a wider range of products – including plant-based risottos and a breakfast option – as Fullgreen seeks to take advantage of its proprietary technology to “disrupt” food categories beyond rice.

“We want to break into all traditional food categories that have offered products that are high carbs, calories and sugar, and disrupt the market with an entirely plant-based alternative,” Misa-Harris added.

Cauli Rice has sold over 5 million pouches since its 2015 launch, with listings in most UK supermarkets and over 2,000 US grocers including Walmart, Kroger and Wegmans, since it launched there in 2018.

Fullgreen currently operates two dedicated factories, with a $4.5m US production line turned on in March 2019. Its products are exported to Australia, the Middle East, South East Asia and Europe.

However, Fullgreen faced recent trouble in the US states of Louisiana and Arkansas after legislation prohibiting the use of the word ‘rice’ to name any non-rice product was passed. This meant the business was forced to pull products from shelves or face hefty fines of $1,000 per pack.

Misa-Harris said the company was able to deal with the legal issues by changing its packaging which now describes the products as ‘riced-cauliflower’ and clearly states that no rice is included.

Fullgreen generated revenues of £3.1m in 2018, significantly affected by four months of ‘out of stock’ issues, which it blamed on its factories struggling to keep up with demand.

Looking at the current year, revenue is expected to rise to £5m as the factories expanded to be able to cope with demand. Further growth to £9m is expected in 2020.

In 2018, Fullgreen made a pre-tax loss of around £700,000 due to its heavy investments in the US. Misa-Harris said the coming year would still be one of “investment mode” with profits to be reinvested in the business.

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