NadaMoo!, an Austin, Tx.-based dairy-free, coconut milk-based, frozen-dessert brand, announced last week that it closed a $4 million round of funding.
The lead investor in the series A round is InvestEco Capital, a Canadian venture firm that invests in mission-centric, health and sustainability driven companies such as Maple Hill Creamery, Kuli Kuli and Vital Farms, that was introduced to the brand through investment platform CircleUp. Other investors include District Ventures Capital, Rugen St. Capital and Working Lab Capital, as well as several high-net worth individuals.
Exact terms of the deal were not disclosed, but NadaMoo! CEO Daniel Nicholson did tell NOSH that his family still owns a “strong majority” of the company’s controlling interest, which he said was a non-negotiable deal-driver going into the raise. Founded in 2004, Nicholson joined and took financial control of the company in 2008 and became CEO in 2011.
Invest Eco CEO Andrew Heintzman said he was drawn to the potential that NadaMoo! presented to the plant-based market.
“We invest in high growth expansion stage companies that promote health and sustainability in the food sector, and we think NadaMoo! hits our target in all respects,” Heintzman said. “[It’s a] fabulous product, very credible people, fun branding, and a great market opportunity.”
Nicholson noted that he appreciated Invest Eco’s current portfolio of mission-driven companies.
“I just needed to know that we were in alignment with respect to the way we see the world and specifically the food world, and what is important to us,” Nicholson said. “When push comes to shove, we will almost undoubtedly reach a point in time when going through challenges and obstacles together, and in those moments it’s so important to know who you are working with and how they view business and the world.”
The capital will be used to grow the company’s team beyond its current 10 employees, hiring food scientists and chefs to support a robust innovation pipeline. Although some efforts will go towards developing new flavors for its current pint line, Nicholson said an even bigger focus is to bring the brand into categories beyond pints and, potentially, beyond the freezer aisle.
“We have believed all along that NadaMoo! has the power to be a world leader in the dairy-free, plant-based space,” Nicholson said. “We see opportunities, even outside of the frozen dessert category, that will give us additional avenues of growth. We are going to hire on food scientists and food chefs, and these people will have full time jobs at NadaMoo! focusing on new recipe formulation, new products and new flavors of ice cream.”
Nicholson added that all new products under the NadaMoo! umbrella would be plant-based and made with high-quality, organic, non-GMO and gluten-free ingredients.
NadaMoo! also hopes to expand its distribution beyond the current 3,500 stores it currently is sold in. In 2018, Nicholson said he expects the brand’s store count to almost double.
The push to expand the business comes at a time when the plant-based, dairy alternative market has gotten more competitive. Earlier this year, research firm Packaged Facts valued the current ice cream market at about $28 billion and predicted that continued growth will come from “free-from” launches in the category. Much of the previous growth has been from more specialty brands catering to niche consumer segments, but as the push towards non-dairy has become mainstream, larger players have taken note of the opportunity. Both Ben and Jerry’s and Haagen Dazs launched their own non-dairy lines in the first half of 2017.
Nicholson said that while he thinks that some of these larger players lack the authenticity and quality of his fellow dairy-free pioneers, these entrances into the category can still be beneficial.
“Without us having to pay or market to the masses, these big players bring more eyeballs to the dairy-free, frozen dessert category,” he said. ”And whether it is the first time, the second time, the third time, or the fifth time that [consumers] are in that aisle buying a dairy-free product, at some point they are going to find NadaMoo! It will probably be when it is on sale or we are doing a demo in the store, but the second that person puts our product in their mouth … we are going to convert them.”