First Bite Fund launches as Ottawa puts $1 billion behind domestic food processing

First Bite Fund, a new early-stage financing vehicle, is betting it can reach small and medium-sized food processors — 92 per cent of the industry, by its own count — that conventional capital has passed over.

The fund is a joint initiative of the Small Scale Food Processors Association and impact investing firm SVX.

It’s built around a financing tool still rare in the Canadian food and beverage industry, revenue-based loans, where repayment is tied to a percentage of sales rather than a fixed monthly bill.

A slow month costs the borrower less; a strong one pays the fund back faster. It’s a structure more associated with software financing than with pickle factories and tofu makers, and First Bite is wagering it fits food businesses’ uneven cash flow better than either a bank term loan or an equity check that demands a board seat and a fast exit.

The fund says it will prioritize founders who’ve had the hardest time raising money at all — women, Black, Indigenous, and immigrant entrepreneurs — and plans to expand through regional partners, with Quebec’s established processing sector named as an early target market. 

What it hasn’t disclosed yet is how large the fund will ultimately be, when it expects to close, or what its loan terms will look like in practice.

In June, Prime Minister Mark Carney’s government unveiled Canada’s first National Food Security Strategy, a roughly $3-billion, decade-long program built around the argument that Canadians face some of the highest grocery costs in the G7 despite the country being one of the world’s largest agri-food exporters.

Ottawa’s stated goal is to raise the share of domestically produced and processed food Canadians consume from 70 to 80 per cent, and to lift the food processing sector’s annual GDP growth from 1.6 per cent to 2.75 per cent between 2027 and 2035.

First Bite is part of a broader, if still small, trend of financiers trying to build lending models suited to food’s rhythms rather than to those of a technology startup or a real estate project.

In the U.S., Steward Regenerative Capital — founded by Fundrise co-founder Dan Miller has channelled roughly $25 million into more than 85 regenerative farms through short-term, secured bridge loans rather than fixed long-term debt, aiming at the same population of small producers that banks tend to avoid.

Closer to home, Vancouver-based Raven Indigenous Capital Partners has taken a different instrument — patient, equity-like capital rather than revenue-based debt — to back Indigenous-led businesses in Canada and the U.S., including several in food and regenerative agriculture.

None of these vehicles is large by institutional standards, but together they suggest a pattern: when mainstream lenders and VCs both pass on a category of business, specialized funds with repayment structures built around that business’s actual cash flow step in.

For now, First Bite says it’s focused on building out its regional partnerships and inviting founders, investors and ecosystem groups to get in touch.