September 23, 2020 (Brunswick, ME) – A new $300,000 grant award from the U.S. Department of Commerce’s Economic Development Administration (EDA) Office of Innovation and Entrepreneurship will support Coastal Enterprises, Inc. (CEI) in developing its Catalyst Fund, a pool of capital for equity investments to be deployed by CEI’s lending and investment team in collaboration with its food systems program. The fund is designed to grow Maine’s food economy by offering early-stage, patient equity investments paired with business advice and technical support. CEI was selected as one of 52 award recipients out of a nationwide pool of 600 applicants.

CEI originated the Catalyst Fund in 2017, recognizing that the limited availability of early stage equity investment presents a bottleneck for business growth. CEI’s goal for the fund is to grow Maine’s food economy by providing catalytic capital for food businesses with the potential for high growth, job creation and positive environmental and social impacts aligned with CEI’s mission. The EDA award for the Catalyst Fund follows a $565,000 award from the Community Development Financial Institutions (CDFI) Fund at the U.S. Treasury in November 2019.

To date, CEI’s Catalyst Fund has invested $1.09 million in eight businesses, three of them women-led, engaged in a diverse array of food production including heritage grain milling, eel aquaculture, growing exotic mushrooms and kelp processing, creating and/or retaining 75 jobs from Maine’s rural heartland to its coastline. These commitments leveraged another $4.82 million in additional investments. From the time of CEI’s initial investment through May of this year, revenue at the eight Catalyst Fund companies has grown, on average, an impressive 22 percent per year and cumulative revenue has grown from $5.92 million to $9.78 million, or 65 percent.

The EDA funds enable CEI to staff the fund in order to source a compelling pipeline of investment-ready businesses and connect them with business consulting and technical assistance, develop and implement innovative investment structures, and host investor forums to introduce Catalyst Fund investees to sources of additional growth capital. CEI will also raise $2 million for investments in an additional 10-12 new food sector businesses, which CEI expects will create or retain 150 jobs.

“The EDA award allows us to move forward with our vision to scale the Catalyst Fund,” said Gray Harris, Senior Vice President of Food System Strategies at CEI. “There are many creative, innovative entrepreneurs building food businesses that directly support Maine’s agriculture and marine economies, which have defined Maine’s working landscapes and coastlines for generations. These entrepreneurs are ready to take big risks to build companies that create jobs in their communities and in our iconic industries. As a mission driven investor, CEI is committed to helping these entrepreneurs pioneer a food system for the 21st century in Maine.”

Maine is known around the world for its heritage industries. A new generation of entrepreneurs is stewarding and leveraging the state’s rich natural resource base in farming and fishing, creating businesses that capitalize on the surging interest in local foods. Atlantic Sea Farms, American Unagi, Maine Grains, Oyster Tracker and Bluet are just some of the next-generation companies that have received equity investments from CEI.

“Entrepreneurs need investors willing to invest in infrastructure,” said Briana Warner, CEO, Atlantic Sea Farms. “That’s where CEI comes in. The Catalyst Fund is giving us the flexibility and time to scale up our value-added products, helping to grow the impact and health of seaweed farming along the coast, with the objective of building a diversified income stream for coastal fishermen in the offseason.”

“CEI played a number of different roles with Crown O’Maine and the financing needs that we’ve had ,” said Marada Cook, General Manager, Crown O’Maine. “When we were a cooperative, the Catalyst Fund provided high-risk, patient investments in the form of non-voting Class B shares, an important model of capital that cooperatives need. When we decided to shift from a cooperative to a Benefit Corporation, the flexibility of CEI’s capital was critical to the success of the transition. As a Benefit Corporation, we have a more expanded vision, including aspects of worker ownership and environmental responsibility.”

“Some investors have pretty stringent guidelines,” said Amber Lambke, CEO and founder, Maine Grains. “Sometimes, that has prevented us from getting financing. CEI is prepared to take more risks, particularly in food businesses. It’s great that we have them here.”

Businesses eligible for future investment will be new (generally less than three years old) and/or positioned to scale up significantly and demonstrate the potential for high growth, profitability, and job creation. The fund aims to serve diverse Maine entrepreneurs, including underrepresented populations, such as women, people of color, new Americans, and people facing systemic barriers who have low incomes or few assets.

About CEI
Coastal Enterprises, Inc. (CEI) helps to grow good jobs, environmentally sustainable enterprises and shared prosperity in Maine and in rural regions across the country by integrating financing, business and industry expertise, and policy solutions. CEI envisions a world in which communities are economically and environmentally healthy, enabling all people, especially those with low incomes, to reach their full potential. More at www.ceimaine.org.