Something & Nothing
Premium non-alcoholic and alcoholic seltzer brand sold in the UK and Europe. Recently launched in the US.
- Partnered with leading US 'better-for-you drinks' distributor
- Co-founders have +30 years experience working on global brands
- Launching premium alcoholic seltzers in Q4 2020
- Applying for Future Fund, not conditional - see Key Info
Learn more about convertible loan campaigns.
To capitalize on the growth of better-for-you drinks and the consumer need for sparkling flavoured waters to be made of real ingredients rather than questionable flavourings, we combined our 30+ years of global beverage and brand experience to create Something & Nothing seltzers. A brand designed for people who care about flavour and are curious about the world.
Our mission is to refresh peoples palates and minds with globally inspired flavours and partnerships with artists, makers and thinkers,
Our Yuzu, Cucumber and Hibiscus & Rose seltzers are made with a combination of natural extracts, juices and botanicals offering a more elevated drinking experience than flavoured waters, and less calories than a soft drink.
We recently launched in the US and have a range of premium alcoholic seltzers in development, so this is a great time to join us on our journey to become the global brand that leads the premiumisation of the better-for-you beverage category.
Substantial accomplishments to date
To date we’ve sold over 250k cans in both traditional retail customers and via our online webstore. In the UK we’re available in premium outlets such as Whole Foods, Ace Hotel, Holland & Barrett, Selfridges, Harvey Nichols and Hawksmoor. We’re also available in independent cafes, premium food outlets and convenience stores in Amsterdam and Berlin.
Last month we launched in the US with Iris Nova, a leader in premium better-for-you drinks distribution. In only a few weeks the response has been overwhelmingly positive. The seltzers are now sold in premium retailers in New York, LA and Chicago, and can be ordered via our US webstore and delivered anywhere in the US.
Iris Nova Founder, Zac Normandin said. “Olly and Rupert created not only an incredible tasting product, but also a brand that has true potential for scale globally. Each can of Something & Nothing offers complexity and uniqueness which appeals to a mature, sophisticated mass market consumer looking for more from their daily sparkling beverages — a connection missing from most of the stagnant competition within the category.”.
Covid has obviously been challenging for everyone, but our DTC business has grown by 200%, with revenue from subscriptions making up 25% of online sales. With the business starting to open up across the UK, Europe and the US we are aiming to sell over 400k cans by the end of 2020.
We developed the brand for a group of people commonly known as the ‘creative class’; a powerful group of influential consumers who create trends that influence the populous. Our brand and product meet their high standards so we have a growing community of brand evangelists who organically promote Something & Nothing.
Our distribution model combines influential scene outlets to build brand awareness, premium off- and on-trade customers to drive volume and online DTC sales for those people seeking to have multipacks of our seltzers at their home or office.
This distribution strategy led to organic distribution in London, Amsterdam, Berlin, NYC and LA, and will be used in cities across UK, Europe, US and the rest of the world.
In Q4 we will launch a range of premium alcoholic seltzers, opening up many new consumption occasions. Our alcoholic seltzers are for those who want a ‘better for you’ alcoholic drink that prioritises taste and is more interesting than non-descript alcohol.
Use of proceeds
From 2021 we will aim to improve per unit revenue. Our plan is to do this by entry into new markets, launching alcoholic seltzers and the acceleration of the DTC sales channel. Additionally, we believe that volume growth and optimisation of our supply chain will drive down per unit costs going forward. Combined together, our aim is for a 15% unit margin enhancement. We are targeting monthly profitability from Q1 2021.
The proceeds will be used to help deliver this plan. Specifically the funds will be used for working capital to ensure we meet the stock requirements needed for customers in the US, UK and Europe (50%), to invest in our DTC business (25%) and to launch the range of premium alcoholic seltzers (25%).
With the aim of being profitable by Q1 2021 we expect the funds to provide us a runway through to a Series A round which we project will take place during 2022.
Please note, Something & Nothing currently has an outstanding Bounce Back loan of £26k. This loan is interest free for 12 months, and was taken out on the 20th of May 2020. Following this period, interest accrues at 2.5%. The term of the loan is for 6 years, with repayment starting after the first 12 months.
Convertible Loan Note
Seedrs is supporting companies who are intending to apply to the Government backed Future Fund. You can read more about the Future Fund here: https://www.seedrs.com/learn/blog/the-future-fu....
In order for a company to be eligible to seek matched funding from the Future Fund, this investment round must be on the convertible loan terms that have been prescribed by the Future Fund for this purpose. These terms differ to our normal ‘advanced subscription agreements’.
Given this product differs from most campaigns on Seedrs, we urge all investors, including regular Seedrs investors, to read the information below and ensure you understand the terms in full before making your investment.
1. Key terms
You will see a term sheet attached to this Campaign in the Documents section which sets out the key terms of the convertible loan and you can see the full document prescribed by the Future Fund here: https://www.british-business-bank.co.uk/ourpart...
A summary of the key terms is set out below, but should be read in conjunction with the term sheet:
Interest: 8% per annum, non-compounding. On conversion events, the company can choose to repay the interest or convert it to equity (generally without the discount). See the Term Sheet for more details.
Redemption Premium: An amount equal to 100% of the principal loan amount
Qualifying Equity Financing. The convertible loan will automatically convert on an equity financing raising at least the total loan amount, at the lowest share price of equity financing less the Discount.
Maturity Date: 36 months from signing convertible loan agreement.
The default position is on the maturity date is that the loan will convert to equity unless the investor majority elect to redeem.
If redeemed, the company will repay the principal together with the Redemption Premium.
If converted, the conversion price will be at the most recent funding round share price less the Discount, provided that funding round happened after 20 April 2020 and was at least a quarter of the size of the convertible loan investment. If no such funding round has occurred, conversion will be at the share price of the last funding round prior to 20 April 2020 (no Discount).
Other events of default or conversion: There are various other scenarios in which the convertible loan may convert or be repaid and investors should reference the term sheet:
Non Qualifying Funding Round: The convertible loan can convert on an equity financing round which does not meet the size criteria of a ‘Qualifying Equity Financing”, at the election of the majority of investors under the loan. Please see the term sheet for how this conversion is priced.
Exit: The convertible loan will automatically convert or be redeemed on an Exit, whichever would give investors the higher cash return. Please see the term sheet for how conversion is priced and payments on redemption in this scenario.
Events of Default: The convertible loan is to be repaid on the events of default, such as liquidation or winding up. See the term sheet for more details.
2. Government matched funding
The company intends to apply to the Future Fund for matched funding on the total eligible amount invested in this funding round. Subject to eligibility criteria and the Future Fund's approval, the Future Fund will “match” the funding raised via Seedrs or other eligible sources, subject to a minimum investment of £125,000 and a maximum investment of £5m. The Future Fund is to be allocated on a ‘first come, first served basis’ to eligible and approved businesses, so there is no guarantee that a company will receive the Future Fund matched funding.
This campaign is not conditional upon receiving matched funding from the Future Fund. Seedrs will complete the investment and transfer the funds raised even if the application for Future Fund investment is rejected. We will ensure an application is made to the Future Fund for matched funding and will not complete until we know the outcome of the application. But if the application is rejected, the company will still be permitted to complete the investment round.
Seedrs does not charge any fees in relation to the Future Fund matched funding, application process or for acting as lead investor with respect to applications.
3. Conversion to equity
The convertible loan agreement prescribed by the Future Fund is equity focused and favours conversion of the loan to equity as the default position.
Redemption is only available in certain scenarios and is often subject to the vote of majority of the investors. Where a vote of investors is required, Seedrs will vote on behalf of any investors it represents as nominee.
There is a possibility that the convertible loan will convert in some scenarios without the consent of Seedrs (if we do not make up a majority of investors). It is also Seedrs’ position that this is primarily an instrument for investing in the equity of the fundraising business and our default position would be to vote in favour of converting the loans to shares in the company, unless there is a clear or compelling reason not to.
As always, investors should be aware of and accept the risks involved in investing in early stage and growth focused businesses: https://www.seedrs.com/pages/risk-warnings
In addition to the usual risk warnings included above, investors should be aware of and accept the following with respect to convertible loans:
The convertible loan agreement is intended as bridge funding to a future funding round, but there is no guarantee that a company will be able to secure further funding.
The Future Fund is to be allocated on a ‘first come, first served basis’ and there is no guarantee that a company will be successful in its application to receive the Future Fund matched funding.
There is a risk that the Company may not have sufficient funds to repay the loan on the maturity date, pay interest when it becomes due or pay the redemption premium included in the terms.
Convertible loans are unsecured obligations and in the event of a winding up or liquidation event will rank behind secured creditors of the Company.
5. Secondary market
Investors will not be able to sell their interest in the convertible loans on the Seedrs Secondary Market unless and until they have converted to shares in the company (and then only subject to eligibility and the terms and conditions of the Seedrs Secondary Market).
6. EIS Relief - past, current and future
As noted above, the convertible loan instrument is not compatible with EIS requirements, so no EIS applications will be made with respect to investments in the convertible loan.
The government has confirmed that investing in the convertible loan will not impact EIS relief previously claimed on investments in the fundraising company:
“The government has confirmed that such previous investments will not be affected where the convertible loan converts into shares. Where the convertible loan note redeems, we have been alerted that the government intends to make changes to the rules to clarify that this is compatible with such previous investments.”
However, investing in a convertible loan could impact your ability to claim EIS relief on future investments into the same company. The government has not clarified the position on this and has said it is a matter for HM Treasury and HMRC.
Seedrs is unable to provide tax advice. Tax treatment depends on individual circumstances and is subject to change.
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