Magic Spoon, the maker of cereals that are better for you, has landed $85 million in Series B funding as three of its brands make the jump from direct-to-consumer-only offerings to Target store shelves for the first time.
HighPost Capital led the new round, bringing Magic Spoon’s total funding to date to $100 million. HighPost is joined by Siddhi Capital, Coefficient Capital, Constellation Capital, Carter Comstock and a slew of famous investors including Shakira, Russell Westbrook, Halsey, The Chainsmokers, Amy Schumer, Odell Beckham Jr. and Nas.
Co-founders Gabi Lewis and Greg Sewitz started Magic Spoon in New York in 2019, creating grain flavors like fruity, cocoa, and peanut butter, but with better ingredients, no added sugar, high protein and low carb, as well as gluten-free and keto-friendly.
Those three flavors are the first of Magic Spoon’s eight flavors to hit 1,300 Target locations starting Monday.
The pair declined to share hard numbers to support the company’s growth, but did say Magic Spoon’s products have reached more than 1 million customers in the past three years.
And while it was primarily a direct-to-consumer brand, Lewis says adding retail has always been part of the plan.
“The plan was to grow the business as quickly as possible and add new things over time,” Lewis told Vidak For Congress. “We wanted to do one thing at a time, do it well and then move on to the next. We started with our website and then Amazon, with the goal of providing additional channels to grow in new and different ways. Now we are ready to lean into retail and hit the shelves.”
In fact, Lewis and Sewitz have always planned to launch products outside of the cereal box. Sewitz said he can’t go into more detail at this time about what other products are in the pipeline, but Magic Spoon has a limited-edition line of cereal bars, which will become permanent members of the product line this month.
Magic Spoon isn’t alone in tackling a healthier version of breakfast. They belong to companies like OffLimits and Crispy Fantasy in grains and Kreatures of Habit and Yishi in the oatmeal space. Some have also gobbled up venture capital dollars while grabbing a chunk of a breakfast cereal market that will be valued at $51 billion by 2028.
When asked who they think their competitors are, Lewis and Sewitz say they don’t technically see themselves as competing with just cereal brands, but with breakfast and snack brands as a whole, for the right to sit at the kitchen table.
The new capital injection positions Magic Spoon as “very well capitalized with its retail launch,” Sewitz said. He noted that there will be investment in growth and adding talent to scale around logistics, customer service and growth marketing as the company balances both DTC and retail.
The company currently has 41 employees, up from 20 a year ago, and has about a dozen job openings on its website. With the expansion of its sales channels, it made the move to bring in Rachelle Lynch as head of sales in March to lead that division and work with the digital team to build that business, Lewis said. Lynch previously held sales positions at Mason Dixie Foods, Hu Products and Jeni’s Splendid Ice Creams, according to her LinkedIn profile.
David Moross, co-founder, chairman and CEO of HighPost Capital, said in a statement that: “Gabi and Greg have built a great brand in a short period of time with a very loyal and engaged consumer base through their unwavering commitment to innovation and creativity. We look forward to leveraging HighPost’s deep expertise in the consumer sector to support Magic Spoon’s continued growth.”