Chapel Down gets taste for crowdfunding
Chapel Down has turned to crowdfunding to raise up to £4m for its next phase of growth as Britain’s biggest wine-maker more than doubles in size.
The Kent-based group, which makes sparkling and still wines as well as craft beers, said yesterday it is seeking to raise between £1m and £3.9m through Seedrs, the UK crowdfunding platform.
This is on top of £670,000 of shares placed with institutions and individuals including City heavyweight Nigel Wray, who owns Saracens Rugby Club and sits on Chapel Down’s board.
Chief executive Frazer Thompson told City PM: “We could have gone to the City…But what crowdfunding does is it potentially gives us exposure to 6,000 new shareholders who love the brand and want to interact with us.”
He said investors who spend over £140 on shares will be given a third off wine as well as free wine tasting and tours: “I really want people to come down and metaphorically kick the tyres and see where their investment is going.”
Frazer said the funds will be used to plant more vines after securing new leases on 400 acres of land, which it hopes will help ramp up production by 133 per cent by 2019. It also plans to build a new winery, a distribution centre and a new brewery for its fast-growing brand Curious, which has helped shore up sales during the dismal harvests of 2011 and 2012.
In a trading statement alongside the fundraising announcement, Chapel Down said sales had grown by 21 per cent to £2.44m in the year to 30 June, with earnings of £71,000. Chapel Down counts a number of City veterans on its board including former Thomson Travel boss Paul Brett and Scottish & Newcastle’s former chief executive John Dunsmore.
WINE BOSS BRACED FOR ACQUISITIONS
Britain’s production of sparkling wine is still just a drop in a very large ocean of fizz dominated by sales of Prosecco and Champagne. But Chapel Down’s boss Frazer Thompson (pictured) believes that there will have to be more consolidation in the industry if it is going to compete with its foreign rivals, hinting that acquisitions could be on the cards for the company. “We will make in the region of 4m bottles of sparkling wine this year as an industry while Champagne sells 35m bottles of its champagne in the UK a year,” he said. “In order for the industry to really get the gravitas it earnestly seeks and deserves, it needs to get bigger. We are going to play our part in ensuring that happens and if that involves a consolidation then we want to be best placed to play our part.”
WHICH COMPANIES ARE USING CROWDFUNDING?
- London restaurant Chilango crowdfunded £2.2m through its so-called “burrito bond”, to help the chain expand.
- Property Partner lets users invest in property for as little as £50, in return for a stake in the property, rental income and access to capital growth.
- Nicola Horlick launched a new crowdfunding service called Money&Co at the beginning of this year.
WHAT IS CROWDFUNDING?
Crowdfunding, the process of raising money to fund a project or venture by raising contributions from a large number of people online, took off in 2008 with the launch of a number of high-profile crowdfunding websites. The likes of IndieGogo and Kickstarter encouraged people to back projects to create physical goods, music, literature, art, film or photography, in return for a reward or discount on the finished project. More recently equity-based crowdfunding has grown in popularity, with investors receiving a stake in the project they back and letting them share in both its success or failure, through sites like Seedrs and Crowdcube.