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EeBria

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The UK's leading craft alcohol marketplace. Listed in Top 10 for Smarta Awards Start Up of the Year.

145%
 - 
Funded 9 Dec 2014
£150,010 target
£222,154 from 294 investors
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Business overview

Location London, United Kingdom
Social media
Website www.eebria.com
Sectors Food & Beverage Mixed Digital/Non-Digital B2C
Company number 08367428
Incorporation date 20 Jan 2013
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Investment summary

Type Equity
Valuation (pre-money) £700K
Equity offered 23.77%
Tax relief

EIS

  • Idea
  • Market
  • Team
  • Updates
  • Investors 294
  • Discussion
  • Documents

Idea

Introduction

We believe EeBria is Europe's only craft alcohol marketplace, enabling customers to buy drinks directly from small independent craft breweries, distilleries and vineyards around the UK.

We currently target the consumer (B2C) market, including 2 subscription clubs, and are now looking to take advantage of the large untapped B2B Craft Beer Industry, bringing breweries and independent pubs and restaurants together.

The B2B site would use the same fundamental EeBria marketplace model, but with some back-end and UI changes.

The B2C site launched in August 2013 with the first subscriptions in July 2014 and sales have grown steadily month on month. The launch of B2B is scheduled for Q1 2015.

Intended impact

Beer distribution is a very large, fragmented and inefficient industry.

We have already established ourselves in the B2C space. We enable customers to access brewery fresh beers and rare drinks from all over the country, sold at competitive prices. At the same time we have become a way for small craft brewers to access a wider market and retain both quality control and higher margins on their products. We intend to grow our offering to include more breweries and serve more consumers.

The B2B space has similar challenges which we feel EeBria is well placed to address.

The B2B distribution channels are currently made up of regional distributors, sending their selection of beers to pubs in their delivery area. Pubs are restricted to the beers stocked by local distributors, and local breweries able to deliver to their location. For breweries to get their beers into pubs they need to be stocked by the distributors, or deliver beer themselves. This means that for any brewery, there are limitations on which areas of the UK have pubs selling their beer.

With the growth of single-use beer kegs, predominantly by the new craft breweries, there is an opportunity to break this regional distributor market control. Using EeBria's marketplace model we could ship these kegs directly from the brewery to any pub in the UK, for much less than the distributors margin, this would mean:
- Pubs pay less for the beer
- Pubs access a wider range of beers and breweries
- Pubs don't have a minimum order size and can control stock better without lots of storage
- Breweries get paid more for their beer
- There is no admin or delivery burden for the breweries
- Beer is sent straight from the brewery, so is in the freshest possible condition.

Substantial accomplishments to date

EeBria Accomplishments:
- Listed in the Top 10 for Start Up of the Year in the O2 Smarta 100 Awards.
- EeBria has been growing throughout 2014, with over 24% MoM growth.
- Our repeat rate is over 30%, with a customer repeat purchasing on average every 2 months.
- EeBria is one of the highest rated "Online Groceries, Supermarkets, Food & Drink" businesses on ReviewCentre (with at least 15 reviews) - with an average rating of over 4.9/5.
- We have over 3,500 Facebook Likes, 1,400 Twitter Followers and 2,100 unique customers.
- We currently work with 38 breweries, 12 distilleries, 7 cidermakers and 7 vineyards.

Progress towards B2B:
- we have breweries lined up ready to use the service as soon as it goes live.
- we receive regular enquiries from pubs and restaurants seeking beer and we have a long list of contacts waiting for us to release the service.

Monetisation strategy

EeBria handles the whole sales process on behalf of the producer, processing the payment, providing the courier service and packaging for the producer to use and providing customer support. EeBria makes money through a percentage commission taken on all marketplace sales. The producers are paid for the products once they are confirmed as shipped with the EeBria commission retained. There are no setup or monthly fees for producers or buyers which will remain true with the B2B model.

Producers are additionally incentivised to send customers to the EeBria platform, by having preferential commission rates for customers that they introduce to us. Examples of breweries 'white labeling' the EeBria site to lower their sales commission can be seen on the websites of The Cronx Brewery, Buxton Brewery and Pressure Drop Brewing.

Whilst B2C is a curated marketplace (allowing only the best UK producers onto the site), the B2B marketplace is not planned to be curated. This is to enable pubs, who know their own target market best to select - and to use reviews to provide their own feedback. We do intend to offer a curated subscription service however, where our experts, for a small extra fee, select a changing range of beers - ensuring a constantly available, changing and high quality beer tap at the pub.

Use of proceeds

We are looking for investment to:
- expand into additional business opportunities, in particular B2B
- grow the existing proven model
- become the key distribution channel for all UK craft breweries.

Specifically:
- Build and release of the B2B platform;
- Hire of staff, across B2C and B2B businesses, including a sales team to increase the number of pubs and breweries on the B2B platform
- In-house PR
- Marketing
- Legal fees / advice for ensuring that we can ship internationally legally (operationally we would be able to do this tomorrow).

.

Market

Target market

EeBria's current customer base is geographically spread around the UK, with only 23% of customers based in London.

Our key demographic is 25-40 year olds, who to date have displayed a 35% repeat rate on EeBria. It is this same demographic who are driving the craft beer market growth in general, however we also see good volumes outside this group, especially through some of our more traditional producers.

Our user base is approximately three quarters male, which we don't foresee changing significantly in the near future.

For B2B our initial target market is independent pubs and small chains (e.g. up to 10 pubs), as well as the growing number of smaller cafes/bars which are offering craft beers. We have received very regular requests for a B2B service from pubs, so have a long list of interested buyers as well as already having a good base of breweries. Numerous breweries that we work with (and breweries that we don't work with) have contacted us, suggesting that we develop a B2B offering.

Characteristics of target market

- The UK alcohol market is worth £41bn. Beer is £11bn of the market, with £5.5bn to the on-trade and £5.5bn to the off-trade.

- The UK Beer Market has grown throughout 2014 and the craft beer segment, grew 79% in 2013. Craft beer is expected to grow much larger, and currently is 14% of the US beer market (and growing quickly).

- There are now nearly 1,300 breweries in the UK and we believe there is an addressable market of 200 breweries for our B2C offering and 900 for the B2B offering.

- The UK represents just 12% of the total European Market Opportunity.

Marketing strategy

From our B2C site we already have a strong base of producers and have received significant volumes of contacts from pubs and other wholesale customers, which provides with a good initial target list.

Further to this list we intend to have a sales team recruiting pubs and breweries. EeBria's name already carries credibility within craft beer, due to the range of breweries we work with, presence at events and level of service provided. Even competitors are known to use our site to discover new beers! Given the cost benefits to pubs and our reputation, pub and brewery acquisition should not prove to be a major challenge.

It is worth noting, that whilst signing up pubs to the EeBria B2B site, we will also be able to offer the pubs access to the EeBria White Label site, so they can host their own webshop, receiving a commission for each sale. This would enable the B2C business to further grow through expansion of B2B.

As with our B2C model, we will offer breweries a reduced commission rate for customers that they introduce to EeBria. This means that the brewery are able to fulfil sales cheaply to customers outside of their normal reach, and we acquire a new pub with a low CPA.

We will also utilise conventional online channels, including Paid Search, Online Display, Retargetting, Content Driven Marketing and Social Media.

Competition strategy

In B2C and B2B we are the only online alcohol retailer we are aware of operating with a marketplace model. This means that in contrast to traditional warehouse based 'bottle shops' and distributors we:
- keep our overheads low.
- pay the producers more per sale, so become preferential suppliers.
- are able to offer a cheap price to customers and pubs
- provide the drinks in the optimal condition. A lot of the beers have a short time from production to the best before date (often 4 months). The marketplace model offers the freshest beers since they do not sit in a warehouse and come straight from the brewery.
- are able to offer a producers full range of drinks, including one-off and special ranges. This enables access to more products from a producer than our competitors.
- offer a personal touch from the craftsmen that make the products.
- have a first mover advantage in the marketplace model and sell many of the UK's best producers already on the site.
- can access the whole of the UK, unlike most distributors
- have a very scalable model

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Tax Relief (SEIS)

This business is eligible for SEIS relief - providing qualifying investors with income tax relief of 50% of their investment and certain other tax reliefs. Tax treatment depends on individual circumstances and is subject to change in future. Click to learn more.

Tax Relief (EIS)

This business is eligible for EIS relief - providing qualifying investors with income tax relief of 30% of their investment and certain other tax reliefs. Tax treatment depends on individual circumstances and is subject to change in future. Click to learn more.

Valuation (pre-money)

Valuation rounded from £700,000

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It is calculated as the pre-money valuation plus the amount of new investment. e.g. If Company A is ascribed a pre-money valuation of £1,200,000 by prospective investors investing £300,000, its post-money valuation is £1,500,000.

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