Top of the food chain: Meet the company helping street-food vendors become the next big thing

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You only have to linger around Borough Market at lunchtime to see how popular this street-food craze has become (Source: Getty)

Londoners have a growing obsession with good food. Our European cousins may have scoffed at British cuisine in the past, but a change has taken place over recent years.

The multicultural nature of our city means we have been flooded with influences from all around the world, and we now boast an entire smorgasbord of cuisines. In fact, there are around 17,000 restaurants based in London – a figure which doesn’t even include the recent explosion of pop-up stalls that seem to magically materialise in every of corner of the capital.

Word on the street

The city is continually peppered with street-food stalls. You only have to linger around Borough Market at lunchtime – which lures in thousands of gastro tourists each day – to see how popular this street-food craze has become.

A lot of the entrepreneurs who are funded by the Finance Kitchen started out as street-food vendors, where they spent years fine-tuning their food and their concept.

But these business owners often hit a ceiling; they want to move up the food chain by setting up a permanent restaurant, which is usually where the Finance Kitchen steps in to help.

“Many of the restaurants have gone down this route, which is good for us because they’re not startups in your typical sense – these are people who have grafted for years, stood out in the cold, and realised it’s damn hard work. But this gives them time to find out what works and what doesn’t,” says the Finance Kitchen founder, Ian Woodley.

Trying to be Pret-er

While the company is largely focused on providing funds, Woodley’s team also work with food entrepreneurs to juice-up their propositions so they are attractive to professional investors. “We need to be able to envisage that the concept can grow quickly to other sites in London,” he explains.

“There also needs to be a ready market for the next buyer of the business – usually a private equity company that has deep enough pockets to help the company expand nationally, or even internationally.”

Woodley and I are sat in one of the 237 Pret a Mangers in London, and as I look around at the familiar surroundings, I can’t help but think that Pret is a perfect example of what Finance Kitchen investors are looking for.

Woodley admits that Pret is "the king of rolling out”; the consistency of the food and service certainly seems to be paving the way for the company’s world domination.

For some entrepreneurs, it’s the opening of a second restaurant when things can start to unpeel. “We see some restaurants struggle because they haven’t got the structure and processes in place before they start to grow, and it all comes undone,” Woodley explains.

This speaks volumes about making sure you’ve got the groundwork in place before trying to scale up.

The steaks are high

Interestingly, Woodley tells me that fine dining restaurants can be the hardest area to get funding for. These one-location establishments can do well financially, but they often find it difficult to expand.

“Sometimes we call them vanity investments; if you put a lot of money into fine dining restaurants, you will be treated like a king when you go to eat there, but don’t expect to make a lot of money off the back of it.”

That’s not to say Finance Kitchen would dismiss high-end restaurants entirely. Take the celebrity-infested Ivy as a case in point. It has its flagship restaurant in Covent Garden nailed down (Woodley himself had an instrumental part to play in renovating it back in the 90s). But of course, the Ivy owners have seen the value in taking fresh versions of the restaurant out to the provinces, particularly the affluent areas which Woodley refers to as “Waitrose towns”.

You can have a good chef, but it doesn’t mean you are going to have a good restaurant

Food for thought

Running a restaurant is not solely about the food. In fact, it’s clear that success largely rests on the commercial side of these businesses.

Woodley, who is a self-professed foodie, says an awful lot of the entrepreneurs he works with have embarked on career changes, with a surprising proportion leaving behind finance jobs in the City in preference for the fast-paced world of food.

“It’s great because when we talk to people about their restaurant concept, rather than just throwing food at us, the laptop will come out and they will open a spreadsheet. As much as it’s about producing good food, people who come from a financial background also understand the business as a commercial enterprise.

“You can have a good chef, but it doesn’t mean you are going to have a good restaurant,” Woodley adds.

Finance Kitchen’s sophisticated investor base must invest a minimum of £25,000 – a clear differentiating factor from the more traditional crowdfunding platforms.

The general public loves investing in restaurants (as we’ve seen from the success of food-orientated projects on platforms like Crowdcube and Seedrs).

But the Finance Kitchen boss says there are issues with having a mass of people investing tiny amounts. “You’re expected to answer questions from investors, even if they are just going to put in £10, which can be an incredibly draining process if you are trying to raise a million.”

Sophisticated investors ultimately need less hand-holding, and those who engage with the Finance Kitchen will often already work in the food industry. “People who have made money tend to invest back in projects they understand,” Woodley says.

“Entrepreneurs also want these types of people on their boards, because they have the grey hair and experience to turn around and say ‘I did that 30 years ago and it didn’t work’.” And of course the contact list these investors bring to the table is an added bonus.

Woodley describes the hospitality industry as a “village”, adding: “it’s a huge sector, but you’d be surprised at how many people know each other.”

Woodley admits that this type of investment might not give you the killer return that a tech firm might, but he states proudly that “returns are probably more consistent, and it’s certainly more fun”.