Learn more about convertible campaigns.
EeBriaTrade offers a unique tech-driven method of beer distribution.
We operate a unique marketplace model, where beers, ciders and other drinks are listed on the EeBriaTrade site by the producers who make them. They set the prices, control the imagery and descriptions and manage the stock levels. When products sell, we use our nationwide network of fulfilment partners to collect the order from the producer and deliver it directly the next working day to the pub, bar, shop or restaurant.
We have over 500 producers actively listing on the platform and over 3,500 active SKUs at any time. To our knowledge, this is considerably more than any other competitors using a more traditional warehouse approach.
With our model proven in the UK, we're raising investment to take our craft beer distribution international, intending to launch in at least eight new countries in 2019, facilitating both a domestic marketplace in each country as well as disrupting the import / export markets. We ultimately intend to build a truly global marketplace.
Craft beer is growing rapidly across Europe and by moving quickly to launch in these geographies we have the opportunity to be a major part of the growth in each country. As far as we're aware, there is nobody operating with our business model in any of the countries we're targeting.
This investment round is being raised by way of a convertible instrument.
The Key Terms are set out in the document attached to the campaign and summarised below:
• Discount – conversion at a 20% discount to the valuation set by a Trigger Event.
• Valuation cap of £40,000,000. Please note that the discount does not apply to the valuation cap.
• Shares will be issued on a Trigger Event, at the lower of: (i) the share price set by the Trigger Event less the Discount; and (ii) the valuation cap.
The Trigger Events include:
- A Qualifying Funding Round – defined as the Company raising investment capital of at least £750,000 from one transaction or a series of transactions, in exchange for the company issuing equity Shares; or
- A change of control transaction of IPO.
• The Longstop Date is 12 months from the date of the convertible agreement. If conversion has not been triggered by the Longstop Date, shares will be issued on the Longstop Date at a company valuation of £8,000,000.
• Shares will also be issued at an £8m valuation in the event of a winding up event prior to conversion.
Substantial accomplishments to date
Since the launch of EeBriaTrade in June 2015 we continue to see strong growth in the UK, with over 100% YoY growth in 2018, c.200% in 2017 and c.600% in 2016, and total sales on EeBriaTrade of over £6.2m. We expect to see even faster growth in 2019 due to progress with Pub Chains (many of whom are already in trials that we expect to roll out to more of their pubs during the year), and because of new deals signed at the end of 2018 with Costcutter (1,700 stores) and NISA (2,000 stores).
Our platform is entirely bespoke built by our in-house tech team and uses many machine learning algorithms to give each pub a personalised experience, helping guide them through the 3,500 SKUs to those that are most likely to be suit their needs.
We have two main revenue streams on EeBriaTrade:
- We take a fee, which is a fixed percentage of the product cost. This is charged to the seller via retention of the sales income.
- We charge the customer for shipping, but this is included in the product price the pub sees and pays. We slightly subsidise this shipping cost to ensure our competitive edge.
Our fixed costs don't change with additional volume, as we have no warehouses or associated costs, we take no stock risk, and outsource all the fulfilment costs (a fixed rate per consignment). This means our model would become increasingly profitable with an increased sales volume.
EeBriaTrade generates approximately 90% of our overall sales in a month, and we expect this percentage to continue to grow. We do have a few other smaller revenue streams: EeBria.com, our B2C platform running a similar marketplace and subscription club for retail consumers, and our Taproom which opens on Fridays and Saturdays on the Bermondsey Beer Mile.
Use of proceeds
The proceeds would primarily be used to launch our international platforms. This is a combination of staff costs: new country managers, operations staff and significant growth of our in-house tech team to ensure the platform builds are completed quickly, whilst also continuing development of the platform and new features. We intend to increase headcount by 10 over a couple of months.
The proceeds will also be needed to cover initial losses for the international platforms, with marketing spend as well as subsidies on early cross-border shipments whilst sales volumes are building to a critical mass.
We are running this convertible / ASA so we can start our international expansion as soon as possible, whilst discussions with other parties for a larger equity raise are ongoing. We plan to close the larger investment arrangements later in this year.
Please note that EeBria has a £25,000 directors loan from David Jackson issued in January 2013. This loan accrues no interest, has no repayment scheduled and will not be repaid with funds raised on Seedrs.