At trade shows like Expo East and West, investors roaming the show floor have become almost as common as the the buyers, meaning the right pitch can quickly turn into a multimillion dollar investment. That was the case for gluten-free, paleo baked good brand Mikey’s, which announced this week a $5 million investment from Factory LLC, an investment group that the brand’s founder Mike Tierney met in March while at Expo West.
The investment, which will be over two tranches, is the largest round of funding for Mikey’s since its inception in 2014. Mikey’s was previously funded by friends and family, as well as a round by REI Capital in October of 2015.
Currently, Mikey’s is in roughly 3,500 stores and produces an array of better-for-you frozen baked goods, such as English muffins, muffin tops, bread and pizza crusts. Tierney told NOSH that given the brand’s large retail presence his short term goal is to “hone in on the wide distribution” the brand has, while also focusing on improving the company’s marketing strategy and brand awareness to drive sales growth.
Although Tierney said the company plans to see triple digit growth in 2017, he thinks the capital will allow the company to scale even further.
“Mikey’s is at a great point now where we have demonstrated our customer base and demand [in] national retail,” Tierney said. “We’ve proven ourselves to an extent but to be able… to bring Mikey’s to the next level, we need the capital to do so.”
The funding, he said, will enable Mikey’s to pursue an “aggressive” innovation plan. The company’s latest product line, grain-free, vegan tortillas, launched at the end of August. At $5.99 per eight pack of cassava-based tortillas, the line has an MSRP well below some of its grain-free competitors. Already over 1,000 retailers have picked up the line, which will be sold out of the frozen set or refrigerated set depending on the retailer.
Mikey’s investor, Factory, also thinks focusing on innovation will help the brand grow. Factory not only supplies its portfolio companies capital but also offers them access to its “scale-up” and innovation facility in Bethlehem, Pennsylvania.
“Mikey’s will be using our facility for new product innovation, taste testing, R&D and quality control,” Rich Thompson, Factory CEO and founder, told NOSH. “By utilizing this shared space… Mikey’s will be able to utilize best-practices across a spectrum of better-for-you baked food products to optimize the company’s performance.”
Tierney noted that the access to Factory’s facility and team will be a large benefit for the company. Until now, Tierney has been the only employe of Mikey’s, looking to outsourced partners to aid with manufacturing, warehousing, and logistical operations.
“The opportunity to work with Factory is so much more than just a cash investment,” Tierney said. “The resources, relationships, technical savviness and scale up/innovation facility being built in Bethlehem are what really drew me in.”