Crowdfunding September round-up: Drink to that

A look at the latest F&B businesses seeking crowdfunding investment online as drinks dominate in September
Tapp'd cocktails
Tapp’d Cocktails has raised £207,099 via its Crowdcube listing in September
Source: Tapp’d Cocktails

Crowdfunding via popular digital platforms Crowdcude and Seedrs has become a common and non-traditional way for businesses to raise funding and gain access to retail investors.

Interestingly, later-stage businesses are now exposing themselves to small-scale retail investors via these platforms, alongside early-stage business that are looking for a capital boost.

Sizeable scale-ups, liked Leeds-based plant-based meat company Meatless Farm, have turned to crowdfunding to get closer to their consumers and offer them up a small piece of the pie.

However, traditional investors have been known to protest against such moves as it requires the company to list private financial and business development info on these public forums for all to see.

Investors have also called out the valuations provided by these platforms to listed businesses as unrealistic and inaccurate.

However, this has done little to deter small businesses from taking the opportunity to put their product or service in-front of as many eyes as possible.

From the consumer perspective, these platforms provide an easy-to-use interface and investment opportunity for casual investors, which are often incentivised by companies offering up small “rewards” like free merchandise, early-access to new products and discounts on existing products.

The platform performs due diligence on the companies listed and investors are also able to directly connect with and ask questions of the companies they choose to fund.

Each month, NutritionInvestor will provide a round-up of the food and beverage companies listed across these crowdfunding sites and the key metrics they are providing.

In September, alcoholic beverages were the choice du jour across both the Seedrs and Crowdcube platforms, while snacks and non-alcoholic drink products also featured.

It is clear that innovative and eye-catching F&B offerings are popular on crowdfunding platforms as all four of the companies listed in this summary were oversubscribed at the time of writing this article.

The Tidal Rum: £150,000 target (overfunded)

Listed on Seedrs, The Tidal Rum, a product by Shorts Boy Distillery, had raised 110% of its £150,000 funding target from 161 investors at the time of writing this article.

With 20 days left on its listing, investors of the business are eligible for EIS tax relief, under which the UK government grants a tax relief of 30% of their investment.

The product is described as a golden-aged rum infused with seaweed foraged sustainably in Jersey. The Pepper Dulse seaweed provides a truffle-like flavour to the rum.

The beverage was launched in 2019 and is sold in the UK and the Channel Islands in 25 supermarkets, as well as via its D2C website, which accounts for 33% of sales.

Shorts Boy Distillery is valued at £4.5 million by the Seedrs platform with a share price of £2.70. The company is providing up to 3.55% equity in exchange for investment via the platform.

It plans to use its crowdfunding proceeds to increase sales and marketing, while also bulk buying packaging to bring down cost of goods.

Dalston’s Soda: £400,000 target (overfunded)

The second and last F&B listing on Seedrs in September was “healthier soft drink” offering Dalston’s Soda, a sparkling water-based beverage using real fruit without added refined sugar.

The company, established in 2012, is valued by Seedrs at £8 million based on its 2020 turnover of £1.79 million.  

At the time of writing the company was overfunded, having hit 122% of its £400,000 target with nine days of its listing left.

The company has offered up to 5.75% equity to its Seedrs investors via a share price of £2.74.

Dalston’s Soda was established in a micro-brewery in Dalston, East London and is now sold at over 2,700 distribution points including Waitrose, Sainsbury’s, Asda and Wholefoods.

In 2020 the company sold four million cans.

It plans to use the capital raised to scale its existing range of products, build out its sales team and invest in marketing to boost brand awareness and customer loyalty.

In response to questions on the current CO2 shortage impacting the production of soft drinks in the UK, Dalston’s Soda founder Duncan O’Brien told investors the company was building up its stock and bulk buying some ingredients that have been difficult to purchase due to Brexit complications.

“Response to major crises such as the pandemic involves lots of reforesting and scenario planning such as we did in Feb/March last year,” O’Brien said.

iLOVE SNACKS: £100,000 target (overfunded)

Crowdcube-listed snack brand iLOVE SNACKS is leveraging the consumer shift towards healthy snacks with its product offering

The company has raised 122% of its £100,000 target via Crowdcube, with seven days left on its listing.

It has offered up a 5.49% equity share at a share price of £0.62 and has been granted a £2.1 million pre-money valuation.

Established in 2016, iLOVE SNACKS has generated sales of £850,000 to date, with an EBITDA of £555,000.

It aims to re-invest this retail capital into its ongoing development of a fully-recyclable tin packaging.

The company just launched its suite of healthy snacks on Amazon US and is sold in Waitrose and Starbucks in Europe.

Tapp’d Cocktails: £200,000 target (overfunded)

Tapp’d Cocktails, founded in 2019, has overreached its £200,000 target by 3% with 28 left on its Crowdcube listing.

The company produces organic, vegan and gluten-free alcoholic beverages and sold 1.1 million bottles in its first year of trading.

The drinks are available online via Next, Amazon, Ocado, Gusto, Virgin, Nisa and Not on the Hight Street’s ecommerce platforms.

Tapp’d has also partnered with Coop to sell its products in over 500 stores across the UK.

Company directors have invested £455,000 of debt and equity into building a 15 square foot manufacturing and distribution facility and its monthly online sales recently exceeded £450,000.

Crowdcube has valued the company at £15 million. Tapp’d has offered up 1.36% of its equity to investors on the platform at a share price of £1.50.

It plans to spend its capital on expanding its reach nationally and developing two new products.