February crowdfunding round-up: A safe place for scale-ups
A look at the F&B businesses that dominated Seedrs and Crowdcube in February
Crowdfunding platforms have become an increasingly viable avenue for scale-up businesses to connect with their audiences, raise their profiles and secure a boost in their investment capital in one fell swoop.
Among February’s handful of food and drink listings across Seedrs and Crowdcube in the UK were two such companies, including plant-based pizza maker One Planet Pizza (OPP) and healthy snack group Nurture Brands.
In an interview with NutritionInvestor in January, OPP co-founder Mike Hill said the company was seeking a £500,000 bridge financing round to support its expansion into the US.
This latest round is its second external capital raise, following an initial Seedrs raise back in 2020, as part of a larger £550,000 round.
Similarly, Nurture Brands told NI back in February it was preparing a £2.5 million Seedrs raise to also drive expansion in the UK and Asia.
One of the lesser discussed elements of crowdfunding is, many successful and oversubscribed campaigns are backfilled by prior, privately-sourced investments.
Nurture Brands CEO Ben Arbib acknowledged this, telling NI in February: “You don’t just turn up thinking you’re going to get that amount of money just from the crowdfunding campaign, we have to backfill some of that from private investors prior to going live.”
One Planet Pizza: £200,000 target
In OPP’s case, the company sought to secure £200,000 of its £500,000 bridge financing round via Seedrs to ensure it complied with UK EIS tax relief requirements.
Five days after launching the campaign in late February the start-up had secured 79% of its overall target via 94 investors.
The company has increased its production efforts ahead of closing a major UK retail listing later this month. At present, OPP distributes its pizzas across a 365 store network.
According to the campaign description, funds will be used to strengthen sales and marketing activities throughout 2022, and support launches in new markets like France, Australia and Scandinavia.
The bridge financing round will be followed by a Series A in April.
OPP is offering retail investors convertible equity through an advanced subscription agreement, at a 20% discount for Seedrs investors.
The company was valued at £3.5 million before launching its campaign.
Nurture Brands: £2.5 million target
At the time of writing, the company’s campaign was 98% subscribed with seven days remaining.
Funds raised will be distributed as working capital to help the company move towards being cash generative in 2023. An additional 40% will go towards marketing spend to build its Myracle Kitchen brand in North America and establish a US sales team.
Nurture operates six brands covering the UK and Europe, North America and Asia. It is actively seeking additional brands to acquire and consolidate into the business.
The company has offered Seedrs’ investors a 5.87% share of the business at a share price of £2.92.
Its pre-money valuation was £40.1 million.
Nettle: £100,000 target (oversubscribed)
Plant-based cheese alternative Nettle has sought to raise £100,000 on Seedrs to build its own development facility and a subsequent production team and fine tune its branding and marketing material, including its e-commerce store.
At present the company supplies its cheeses to retailers Planet Organic and Abel & Cole, as well as upmarket foodservice outlets Elystan Street, The Dorchester Hotel, Caravan and Ottolenghi’s NOPI.
The company’s DTC platform will be launched this year, offering customers a subscription service.
Nettle increased its revenue 150% year-on-year between January 2020 and January 2022.
Retail investors have been offered up to a 19% equity share of the business at a share price of £8.74.
At the time of writing, Nettle had secured £207,627 from 218 investors and had 21 days of its campaign left.
Vegums: £230,000 target (oversubscribed)
Plant-based supplement maker Vegums had raised 107% of its £230,000 target at the time of writing.
In an effort to increase its marketing efforts in the US and Germany, purchase new stock and update its website, the company presented investors with a 4.72% equity offering at a share price of £4.43.
Vegums’ pre-money valuation was £5 million, based on a significant 155% revenue increase in the last 12 months.
Its products are listed at 30 retailers across the UK.
This is the company’s second Seedrs campaign, with an initial round in 2021 becoming overfunded in the first 24 hours of being live.
During 2021, the company doubled its valuation, grew its team to 20 and commercialised its fourth product.
One Gin: £205,000 target (oversubscribed)
Over on Crowdcube, independent gin developer The Sprit of One has sought to shake up the gin market with its premium offering One Gin.
10% of the company’s profits are donated to the One Foundation charity, with £20,000 having been donated since the company’s launch in 2017.
The gin is currently stocked in Tesco, John Lewis, Fullers pubs, Majestic Wines and Virgin Wines.
It had a pre-money valuation of £1.8 million and has offered investors an 11% equity share at a share price of £1.62.
The management team shares vast experience from leading FMCG groups including Mars, Diageo and Pernod Ricard.
Funds are expected to be re-invested into launching a new product offering.