Mercato Partners has closed Savory Fund II, its second investment vehicle devoted exclusively to backing emerging restaurant concepts, raising $100 million of commitments. The closing of Fund II builds upon the early success of the firm’s inaugural vehicle, which closed on $100 million of commitments in October 2020.
Limited partners in the fund consist of both existing and new investors, including institutional investors, family offices, and financial services and advisory firms. Savory’s investment strategy focuses on partnering with food and beverage brands looking to expand beyond their founding region. The fund is managed by general partners Andrew K. Smith and Greg Warnock.
Fund II will seek to partner with 6-7 new brands during its investment period. Since the inception of the Savory Fund Practice in 2018, the firm has deployed $65 million and allocated an additional $15 million of growth capital into five restaurant concepts: The Crack Shack, Mo’Bettahs, R&R Barbeque, Swig, and Via 313.
“We are grateful for the continued support of our investors, especially after closing Fund I less than one year ago,” said Smith. “As one of the few firms operating in this industry niche, they understand our mission of partnering with leading entrepreneurs early in their business’ life cycles and accelerating their brand and operations nationally. The last year has shown that skilled, active managers can provide true alpha to investment portfolios beyond market rate returns. As the pandemic fades into memory, Savory is poised to take advantage of re-openings across the country, and the desire to eat outside the home and try new concepts.”
“Swig partnered with Savory in December of 2017, and since then, our brand has experienced explosive revenue growth, approaching 300% from when we partnered,” said Chase Wardrop, President of Swig. “We have also been fortunate to open 13 additional stores as a partnership, with 17 more slated to open in 2021. Over the last few years, the Savory team has been instrumental in guiding us through the growth process, implementing their playbook on technologies, personnel and strategy necessary for our brand to scale. As a result, our teams have been able to adapt, and we were extremely well positioned during the unexpected challenges our industry faced during the pandemic. Swig is now poised for additional mind-bending growth in the coming years. Because we have the Savory team behind us, we feel prepared to execute better than ever.”
Cooley LLP provided legal counsel for the formation of Fund II.