Barburrito, the Mexican-style casual dining chain, has received a £3.25m investment from the Business Growth Fund (BGF) to help it expand from six to c.18 sites over the next four years.
Meanwhile, Colin Hughes, who helped the rollout of Pret A Manger and EAT, is to join Barburrito’s board as a non-executive director, it was announced this morning.
The deal has seen BGF take a “significant minority stake” in the business said a spokeswoman, although the proportion has not been revealed. Andy Gregory from BGF, an independent company backed by five major banks that invests in fast-growing small and medium businesses, will also take a seat on the Barburrito board.
In a statement this morning, BGF said: “BGF’s £3.25m equity investment will fund an active rollout programme with the business planning to triple its number of restaurants to c18 sites over the next four years. The bulk of the new restaurants will be in prime locations in London. As a result of this expansion, Barburrito expects to create approximately 250 new jobs.”
Founded in 2005 by Morgan Davies and Paul Kilpatrick, Barburrito has since grown to six sites and generates annual net revenues of £4m. Like-for-like net sales increased 20% last year.
Davies said: “We have made great progress since starting as a single site in 2005. In the last two years we have opened three new stores and doubled the size of the business. We believe that the time is right to roll out our award winning formula to a national customer base and we knew that we needed additional funding to achieve this.
“We are excited about partnering with BGF to take Barburrito to the masses. It was important for us to find the right partner, an investor that is able to offer more than just money. BGF has demonstrated that they not only share our enthusiasm for the sector but can bring valuable advice, expertise and high level contacts to the table.”
The announcement takes BGF’s investment to £37m to date, with five deals announced in the past three months alone.
Andy Gregory, BGF’s regional director for the north of England, said: “Barburrito has a fantastic product, a strong vibrant brand, ambitious management and an excellent operational platform. These are strong foundations for growth and the basis for our decision to invest.
“Having established the UK’s first ever burrito bar, Morgan and Paul have successfully pioneered fresh Mexican food in the UK and it is fast becoming one of the most popular parts of the food and drink market. The business has demonstrated strong trading in the North West and is now well placed to bring its winning formula to the London market. This is where our capital and expertise comes in and we look forward to working with the team as we move into their next stage of growth.
“This is the first investment led by our Manchester office and as such represents a significant landmark for BGF. We are seeing a strong pipeline of investment opportunities across the north of England, a clear indication that businesses here are recognising the value that a supportive equity investor can bring to the table.“
