AFTER a hunt as students to find a healthy and filling meal that left some pennies for a pint, founders of Hummus Bros Christian Mouysset and Ronen Givon hit on an idea: an eatery dedicated to creating meals based on the popular yet simple dip. That was back in 2005. Now, the pair own a chain of restaurants across the capital, along with operating 50 popups in corporate canteens for the likes of JP Morgan, Goldman Sachs and British Airways.
Hummus Bros will be listing shortly on crowdfunding platform Seedrs, looking to raise £250,000 for 4.35 per cent equity. I spoke to Mouysset about the experience so far, and what motivated them to turn to crowdfunding.
You recently raised money by issuing a bond via the platform Crowd2Fund. Can you tell us about moving from debt to equity?
We have always used a mix of debt and equity to fund our expansion, and will continue to do so. With the Hummus Bros bond, we successfully raised over £170,000. Raising debt allows us to limit giving away equity, but it has a regular cost to the business in the form of interest.
In the past, we have raised finance from angel investors, alongside taking loans from the bank. The experience was good in both circumstances. But unfortunately, bank lending and other traditional sources of finance for small businesses has dried up in the wake of the crisis, and isn’t providing the capital they need to grow. Our angel investors are participating in this current round of crowdfunding.
Crowdfunding is a great way for businesses to source capital, grow, and provide more exciting services, products and jobs. It’ll enable us to not only grow the business, but will also allow very loyal customers to participate in the success of the company. And that also creates ambassadors for our brand.
Several of our business contacts are considering using crowdfunding or have recently used it, like Oppo ice cream.
Crowdfunding is a great financial innovation, and that chimes with how we operate as a business. Whether it’s introducing new dishes like quinoa and kale topped with falafel, or releasing our mobile app to allow our customers to pre-order and jump the queue, we enjoy constantly innovating.
What are you going to do with the capital you raise?
Our funding round will allow us to open two to four new branches – outside the capital – and explore the opportunity to offer our preservative-free hummus in supermarkets. Supermarket sales of hummus in the UK are worth £100m per year with no established brands. We’d like to become the Innocent or Gu for hummus.
What is it like working with a crowdfunding platform?
We chose Seedrs because it’s the leading London-based equity crowdfunding platform in Europe. The experience so far has been extremely good. Seedrs has helped put the campaign together, including the video, but has also fact checked everything we’ve mentioned in our pitch. Its team has asked us to provide third party proof for awards we have won, to back up our health facts, and to justify the benefits of using high pressure processing technology (a pasteurisation technique used to make hummus). To me, this means that investors can trust the information the business is presenting.
How have investors responded so far?
We’ve had great feedback from investors that are looking to back us. They love the product that we serve, and are excited about our new product development (in particular our sweet potato falafels and Shakshuka) and our routes to market.
Being able to invest in a company that is local to you allows you to both have an influence on the type of businesses that flourish in your neighbourhood, and also boost job creation. This, in turn, raises more tax revenue for the government, which may then choose to invest it in the infrastructure and services in your area.
City A.M. has partnered with Crowdnetic for the launch of its suite of UK crowd finance data. It features real-time information on private, UK-based companies publicly raising capital online through securities-based crowdfunding portals.