Nick’s closes $100M funding round

Dive Brief:

• Swedish better-for-you ice cream and snacking brand Nick’s closed a $100 million Series C fundraising. The round was led by Kinnevik, Ambrosia and Temasek. Gullspang also participated in this round.
• The company will use the money to bolster its North American and European growth by expanding its portfolio and doubling store count next year. Nick’s also plans significant R&D investments.
• This is the second big funding round this year for Nick’s. In January, the company raised $30 million to fuel its international expansion efforts.

Dive Insight:

In February, Nick’s North America CEO Carlos Altschul told Food Dive he saw 2021 as a banner year for the company, and his words are ringing true. This mega-funding round tops off an already impressive year, during which the company was one of the first to offer animal-free dairy ice cream through a partnership with Perfect Day, launched into a new category with Swedish-Style Keto Snack Bars, and got into frozen novelty treats with its Cookie Kräm ice cream sandwiches.

The company has also seen its retail footprint expand in the past year, both in stores and online. Nick’s is in about 6,700 U.S. stores today, up from about 4,500 in 2020, the company said. In the past year, Nick’s has become the country’s dominant better-for-you ice cream as measured by same-store velocity, according to IRI data cited by the company. Online, it’s been the top selling direct-to-consumer ice cream pint since June. Since its launch in that channel, Nick’s said it had been seeing double-digit sales increases almost every month.

Nick’s aims to set its treats apart from comparable items with better-for-you ingredients that provide fewer calories, fat and sugar. The company uses no sugar in its products; instead, it sweetens them with natural alternatives including stevia, allulose, erythritol and xylitol. Its ice creams also use Epogee Foods’ fat-replacing ingredient EPG, which is a rapeseed oil-based fat substitute that can reduce fat calories by 92% because the oil cannot be absorbed by the body. 

The story of Nick’s begins in 2014, when Swedish mechanical engineer Niclas Luthman was diagnosed as pre-diabetic. Luthman changed his diet and started Lub Foods to create indulgent better-for-you products. The company started in Luthman’s home country of Sweden, but its products have expanded to 16 international markets, including the U.S.

Nick’s first launched in the United States in late 2019. The company closed out 2020 with nearly $10 million in sales, and Altschul said early this year that about 40% of Nick’s total business came from the United States. He anticipated that more than half of its business would come from the U.S. in 2021. 

While the company’s innovations, expansions and success in direct-to-consumer sales already may have helped Nick’s meet that milestone, this funding can help push it farther. Consumers are often looking for food that is both indulgent and good for them. According to research from The Hartman Group presented by Nestlé, 74% of consumers say “treating oneself” is the primary way they look for a pick-me-up. Using these funds to get Nick’s products in front of more consumers — whether through a larger retail footprint or more targeted marketing — is likely to bring more growth.

There is also quite a bit of white space in the better-for-you treats category, and the company teases that there could be much more to come. In a written statement about the funding round, Luthman says it will “fuel the massive R&D effort ahead of us in making more and more snacks better-for-you and better for the planet.”