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The Coffee Apothecary

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Established cafe brand with two cafes looking to expand by adding a coffee roastery

189%
 - 
Funded 12 Oct 2021
£100,001 target
£189,306 from 228 investors
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Business overview

Location Ellon, United Kingdom
Social media
Website www.thecoffeeapothecary.co.uk
Sectors Food & Beverage Mixed Digital/Non-Digital Mixed B2B/B2C
Company number SC459884
Incorporation date 24 Sep 2013
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Investment summary

Type Equity
Valuation (pre-money) £1.5M
Equity offered 11.19%
Share price £1.5
Tax relief N/A
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Business highlights

  • Flagship cafe est. 2014 | Second café est. 2019 with BrewDog
  • Over £2m revenue to date | £661k revenue generated in 2019*
  • Established 7 year brand | 4.7* from 1000+ online reviews
  • Crowdfunding to launch in-house speciality coffee roastery
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Key features

  • Secondary Market
  • Seedrs nominee min. £10.50 +
  • Pay by Bank payments not accepted
  • Idea
  • Key Information
  • Investor Perks
  • Team
  • Updates
  • Investors 228
  • Discussion
  • Documents

Idea

Introduction

The Coffee Apothecary was born out of a desire to bring world-renowned coffee, and the relaxed café culture that we fell in love with whilst living in Melbourne, back to our beautiful corner of Northeast Scotland. In 2014, we bought a run-down village post office and set about breathing new life into it. From day one, we prided ourselves on ethically sourcing the highest quality coffee and ingredients for our inspiring and wholesome menu.

In 2019, we expanded the business by opening a second, larger café with support from BrewDog. This venture recreated our signature, relaxed café atmosphere, and enabled us to introduce a new, sophisticated dining experience with evening openings, craft beer, and cocktails.

With total revenue of over £2m generated since launching in 2014 and £661k of revenue generated in 2019*, we are ready to move our business forward by turning a building we already own, just behind our flagship cafe, into a speciality coffee roastery.

Substantial accomplishments to date

2014
- May: Completed purchase of a run-down post office in rural Aberdeenshire
- Project-managed a complete renovation, transforming the damp, dark shell with no heating, water supply or drainage, into a beautiful cafe
- Dec: Opened the doors with a dedicated team of four staff

2015
- Generated revenue of £151k*
- Focused on constantly improving and adding to our offering
- Introduced outdoor seating to increase covers from 45 to 80

2016 - 2017
- Continued growth with revenue increases of 13% in 2016 and 20% in 2017*

2018
- Approached by BrewDog to open a second cafe in a nearby town centre
- Project-managed the build alongside Brewdog Exec. bar team
- Grew revenue in first cafe by 28%*

2019
- Jan: Opened doors to our second cafe
- Grew the staff team to 40
- June: Introduced evening openings in the new cafe
- Dec: Re-established profitability after significant investment in the business expansion

2020
- Began year on-track for growth predictions
- Highest ever daily takings on final day before lockdown
- Rebounded after lockdown with a successful takeaway-only phase of reopening
- Navigated the challenging circumstances of being open with constantly changing restrictions before the second lockdown
- Full staff retention throughout COVID-19 period

2021
- Finalised design plans for our next expansion venture - the coffee roastery
- Continued to exceed revenue expectations on reopening in April, despite ongoing restrictions

*Based on unaudited Management Accounts.

Monetisation strategy

The coffee roastery will add a new revenue stream to the existing two cafes, and will be financially viable from day one, owing to:
- Supplying the coffee requirements for both cafes, roasted and packaged on-site
- Retail sales of take-home coffee in both cafes

We are designing a new website, complete with e-commerce capabilities and subscription management functions, which will enable online sales to a much larger, far-reaching customer base across the UK through the following:
- Online retail sales
- Online subscription letterbox service

There is also the potential to wholesale to other like-minded speciality cafes in Scotland, the UK, and potentially worldwide.

Use of proceeds

We have worked hard to build a strong and reliable reputation for quality in the local area, and further investment will enable us to take the next logical step in growing our business.

With over 7 years’ experience in the industry, and expertise in creating the finest-tasting coffee, developing an in-house roastery will enhance quality control of the products we serve, and will add a potentially significant retail dimension to our existing model.

The funding will enable us to renovate a run-down building the business already owns and add an extension, which will house the coffee roaster and create space for packing and storing our product. The installation of solar panels to our south-facing roof will support our environmental ethos, and we will improve our staff facilities.

Investment will also fund the purchase of a high-end coffee roasting machine including the associated technology and equipment required to create an exceptional and sustainable product.

Key Information

Material Debt:

The company has the following outstanding loans:

1. £192,500 loan from Triodos Bank at an interest rate of 6.5% + Royal Bank of Scotland base rate per annum. The loan was entered into in May 2014, and is to be repaid by May 2030. The loan was taken out to assist with the purchase of the businesses cafe premises. This loan is secured against the property the company owns. The loan is currently being repaid in monthly instalments, with the current outstanding balance standing at £129,472.70.

2. £50,000 bounce back loan from Royal Bank of Scotland at an interest rate of 2.5% per annum. The loan is to be repaid in monthly instalments ending in October 2026.

3. £225,000 non-interest bearing Directors loan from the two founders of the business, Jonny Aspden and Alison Aspden. The majority of this loan was lent to the business to purchase and renovate the property where the first cafe is situated. The loan will be repaid when the company is in a position to do so.

The funds raised from this investment round will not be used to repay these loans.

Founder Interests:

Please note, the two Co-Founders of the business currently occupy the residential premises which comprise part of the Company’s premises at The Coffee Apothecary.

Investor Perks

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If you successfully purchase a share lot of this business, you will be granted access.

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If you successfully purchase a share lot of this business, you will be granted access.

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Investing involves risks, including loss of capital, illiquidity, lack of dividends and dilution, and should be done only as part of a diversified portfolio. Please read the Risk Warnings before investing. Investments should only be made by investors who understand these risks. Tax treatment depends on individual circumstances and is subject to change in future.

This webpage has been approved as a financial promotion by Seedrs Limited ("Seedrs"), which is authorised and regulated by the Financial Conduct Authority. It is not intended to be a promotion of any individual investment opportunity and is not an offer to the public. The summary information provided about investment opportunities on this webpage is intended solely to demonstrate the types of investments available on the Seedrs platform, and any investment decision should be made on the basis of the full campaign. Full campaigns are available to investors who have become authorised to invest on the Seedrs platform. All investment activities take place within the United Kingdom, and any person resident outside the United Kingdom should ensure that they are not subject to any local regulations before investing.

Seedrs does not make investment recommendations to you. No communications from Seedrs, through this website or any other medium, should be construed as an investment recommendation. Further, nothing on this website shall be considered an offer to sell, or a solicitation of an offer to buy, any security to any person in any jurisdiction to whom or in which such offer, solicitation or sale is unlawful. Seedrs does not provide legal, financial or tax advice of any kind. If you have any questions with respect to legal, financial or tax matters relevant to your interactions with Seedrs, you should consult a professional adviser.

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 £1,500,000

This is the fully-diluted pre-money valuation of the business (i.e. before the new investment comes in and including issued options and other equity interests). In contrast, the post-money valuation is based on inclusion of the new investment in the value.

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.

Pitch type

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  • Equity
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  • Fund
  • Cohort
  • Secondary

Investing in a regular equity campaign is the simplest and most common way to invest in a startup. You decide which business you want to invest in, and if the campaign hits its funding target then you will become one of their shareholders. As the company becomes more valuable, so do your shares; allowing you the opportunity to share in the future success of the business.

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Equity Offered

The equity offered is the percentage of the company’s shares being issued in return for the amount of investment raised.

When the amount raised is less than 100%, the equity offered is based on the target raise. Once the company has raised over 100% it is based on the total raised.

In some scenarios, entrepreneurs may accept additional direct investment after closing their Seedrs campaign. Provided this is within 6 months of the closing and on the same terms, we do not typically offer pre-emption rights on that extra investment (where you have the opportunity to invest again to maintain your percentage shareholding).

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Seedrs nominee

This shows if you are able to choose, when making an investment, that you be represented by, and your shareholding be managed by, the Seedrs nominee.

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Custodian

If you invest in this Campaign, Seedrs will act as Custodian rather than provide our standard nominee service. This is due to the fact that the business is not directly involved in the share sale and Seedrs will not benefit from any rights under a shareholder agreement. As a result, Seedrs will handle administrative tasks as we do normally, but you will not have information or voting rights, updates from the business, preemption on future fundraising, or ongoing support about business trading activity.

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Secondary market

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Direct investment

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Payment options

We are not able to accept card payments for investments into this sector. You can pay for your investment by creating a bank transfer, using funds in your investment account or create a Pay by Bank payment. Your investment will only be completed once the funds have reached our account.

Business Involvement

This Campaign offers shares for sale in business that is not directly involved in this Campaign or the sale. As a result, the Campaign and post-investment experience, including investor rights, will differ from a business-led campaign on Seedrs. Most notably, the business will not engage with investors in the discussion forums both during and after the sale or provide any updates to investors.

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Payment options

We are not able to accept Pay by Bank payments for investments into this sector. You can pay for your investment with a card payment, by creating a bank transfer or by using funds in your investment account. Your investment will only be completed once the funds have reached our account.

Drawdowns

This campaign offers the ability to pay for an investment by drawdowns.

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