London-based coffee shop group Grind & Co. is raising £1.5m with a Grind Bond on crowdfunding website Crowdcube to fund its next stage in growth
The money will be used to add a roastery to enable the company to roast and blend its own custom coffee as well as adding a further two to three London sites to its estate.
Co-founder David Abrahamovitch told M&C Report the company is opting to raise money through Crowdcube as it reflects the company’s own ethos and appreciation of technology.
He said as a business Grind & Co. has always been a bit disruptive in its approach – merging coffee with cocktails and even a recording studio as a single business – so an alternative route to finance was appealing.
“Funding will allow us to do the roastery and two or three more sites depending on how much we get. When we started out we were definitely only going to do Shoreditch Grind but as it got busier and more popular we wanted to do another one but I have never had a number in my head to grow to.”
The company has a target amount of £1m with a cap of £1.5m through as a bond which will reward investors with 8% interest paid quarterly on investment.
Grind took on major investment at the start of last year from John Ayton MBE, co-founder of jewellery business Links of London, who also become a non-executive director in the process.
“We are now much more established as a brand than when we needed that guidance to grow. We have got much more of a customer base and people know us so we thought it was about time we go back to the customers,” Abrahamovitch said. “We want them to share our success rather than give that up to a bank.”
Abrahamovitch, who founded Grind & Co. with Kaz James in 2011, said a bond is a more attractive proposition for the company than an equity raise at this stage
“The great thing about Crowdcube is that no one really likes putting their money into banks so it just cuts down all these barriers and you know where the money is going and where it will come back,” Abrahamovitch said. “Of course there is more risk but the rewards are better – customers who are already spending money with us know us and like what we are doing.”
A site in east London has been identified for the roastery, but is yet to be signed on, which will be Grind & Co.’s largest site to date and will offer all the elements from other Grinds – coffee, cocktails and food – as well as the production facility.
The site, which will be more than twice the size of existing Grinds – is expected to be up and running in Q4 this year.
A food menu was introduced when the most recent Grind opened at London Bridge in February.
Grind & Co. currently has four successful London sites, has invested heavily in its head office team and next has plans to open its own roastery in east London. Abrahamovitch said expansion will continue for as long as beautiful spaces can be found.
“We do want to keep growing but the right space is really important,” he said. “One day we would love to take it nationally eventually but at the moment we are very focused on central London then greater London.”
Abrahamovitch said he feels the Grind & Co. model would sit well in towns and cities that have a burgeoning coffee culture such as Leeds and Manchester.
