“Since that first day in 2011, it’s been the support of our customers that has driven us to where we are today, and we knew we had to allow them to fund our next stage of growth. Grind has always been about doing things our own way, and a little differently, and this disruptive approach to fundraising really resonated with us.”
Having successfully scaled to four sites, and on track to serve 750,000 coffees in the next 12 months, the next step for the group is to in-source the roasting of our custom blend – offering greater control, improved coffee margins, and allowing us the opportunity to take up the wholesale and retail opportunities that we’ve already been presented with.
“We have identified some space in east London, about 10 minutes from Shoreditch, in which we plan to create a state of the art roastery, a central kitchen and a sixth Grind, all in one. In this new space, the biggest and most ambitious Grind yet, we will not only roast coffee, but also bake croissants, cakes and pastries to be delivered to every Grind each morning. We’ve also got a few special projects up our sleeves, and the roastery will allow us the space and the facilities to make these a reality.”
We feel that we have an incredibly strong management team in place that will enable us to keep growing Grind. After building the roastery, which we anticipate will cost about £350,000 to set up, we will use additional funds to continue to open further sites at a cost of approximately £200,000 for a small format site (without a restaurant offer, such as Holborn Grind) and approximately £300,000 for a larger format restaurant site, with a full kitchen (like London Grind).
The Grind Bond has been designed to be a simple investment. We are targeting £750,000 with a maximum fundraise of £1.5 million. For an initial investment of £500 or more, where each Grind Bond has a face value of £500, Grind & Co. Ltd will provide registered holders of Grind Bonds (“Bondholders”) with a fixed rate of return of 8.0% gross interest per annum over the course of an initial 4 year term payable in cash. At the end of the initial 4 year term and on every anniversary thereafter, you have a choice:
1. either continue to hold your Grind Bond(s) for another year on exactly the same terms
2. or give us six months’ notice and we’ll redeem your Grind Bond(s).
On maturity of your Grind Bond(s), the full amount of your initial investment will be repaid without any deductions or charges.
Grind is an established group of Espresso and Cocktail Bars in London with a loyal following and a burning ambition to revolutionise the coffee drinking experience. Born from a desire to find ‘real’ coffee – Melbourne born DJ and musician Kaz James and his entrepreneur buddy David Abrahamovitch teamed up to develop a group of beautiful spaces in London for eating, meeting and drinking – to a killer soundtrack.
With a day to night trading model serving coffee, cocktails and delicious food, through extended opening hours we are consistently striving to differentiate ourselves from the competition. We are confident we will achieve gross sales of £4.4m in the next 12 months from our four existing and two planned sites, and expect to serve in excess of 750,000 coffees and 100,000 cocktails in this period.
Our original site, Shoreditch Grind is a perfectly circular, stand-alone building perched on the edge of Old Street Roundabout, at the heart of ‘tech city’. Our recording studio upstairs is constantly ‘on air’ and has been used by some of the world’s most recognisable artists from Sam Smith to Tinie Tempah and Pixie Lott. Shoreditch Grind alone now achieves gross sales in excess of £1m p.a from around 900 square feet of trading space.
Our second site, Soho Grind is just metres from the famous Carnaby Street and features a hidden cocktail bar that is revealed each night beneath the streets of Soho.
Our third site, Holborn Grind was born from an invitation from Hoxton Hotels to be a part of their new hotel in Holborn. Grind stepped up to a new level of design and finish to match – with floor to ceiling glass, a sweeping marble bar and bespoke brass shelving suspended from the ceiling, Holborn Grind is a striking space and has been nominated for awards at the forthcoming Restaurant and Bar Design Awards.
London Grind, our fourth site, opened earlier this year in our biggest space to date – a listed nineteenth century bank sat on the south bank of the Thames. As our first full service restaurant, London Grind serves an Italian-influenced menu from breakfast through to dinner – of course with a Melbourne twist.
Our fifth site will open in Covent Garden in summer 2015 and we are on the hunt for more special locations.
“We have built a fantastic reputation for incredible coffee, food and cocktails – our coffee is considered amongst the best in town, and the Evening Standard regularly namechecks our Espresso Martini as one of the best in London.”
As a Group it’s been phenomenal to see what we’ve created resonate with so many people. The four sites have got busier and busier, we’re getting tons of press, and our customers are really engaged – already, over 5,000 of them have signed up to our Black Card membership scheme, and we’ve got an online following that eclipses others in our sector.
Behind the scenes, we’ve used tech to innovate at every level. We’ve built a bespoke database to manage our Black Cards, we’re working on an amazing new app, and our management team can even stream live sales and monitor speed of service from their phones. We’ve also invested heavily in the Grind central team, with an industry leading central team including an Operations Director, Head of Coffee, Head of Bars, Head Chef and in house marketing and finance. Grind currently employs 80 people of 16 nationalities.
From the beginning, Grind was never going to be about creating a faceless chain. It’s always been about attention to detail, about London, and about creating spaces where we want to be. With your investment, we’ll continue to make this a reality – and we’ll keep turning incredible spaces throughout London into places to eat, meet and drink – with you as a central part of our story.
The Story so far
Shoreditch Grind, our first site, was founded in 2011 and it grew quickly, in scale and reputation. It is now a thriving and bustling coffee shop in the heart of east London. Later, the two co-founders added a recording studio upstairs, and soon after began opening in the evening, serving the now infamous Grind Espresso Martini. Open 18 hours a day, we like to think that Shoreditch Grind has become an east London icon.
Following the success of Shoreditch, David and Kaz knew they wanted to do another, and in 2013 David stepped away from the tech-based company that he had helped found to focus full-time on growing the Grind.
“I knew we’d need some expert help and funding. I’d raised funds in the past, but I felt that what this business needed at this stage was an individual investor who would really engage with the brand and become part of the team. We were introduced to John Ayton – he just got it instantly – and he invested along with Diarmid in 2014.”
John Ayton – best known for having founded Links of London and being the earliest investor in Bremont Watch Company – and Diarmid Ogilvy, another seasoned investor, backed the business in early 2014 and David immediately started assembling a crack team to help manage the expansion.
Two further sites quickly followed, Soho Grind, with a cocktail bar hidden beneath Beak Street, and Holborn Grind later that year as part of the new Hoxton Hotel in Holborn. The brand’s new flagship site, London Grind, opened in February 2015, in a listed former bank at the address of 2 London Bridge.
“London Grind is a big step up for the brand – it’s more than twice the size of any of the other sites and the first with a full kitchen and restaurant offering. It’s our most incredible space yet – an Old Bank built in 1850 at the iconic address of 2 London Bridge – an imposing piece of real estate.”
The fifth Grind, in Covent Garden, is due to open Summer 2015.
Specialty coffee is a growing market and the demand for high quality coffee is getting greater and greater.
Coffee sales in the UK are estimated to be over £6 billion per year. The large coffee shop chains account for 40% of the sales in the sector, and continue to grow at a rate in excess of that of the rest of the retail sector. It’s estimated that a further 1,000 chain coffee shops will open before 2018. Consumer demand is increasing – one in five adults now visit a coffee shop daily compared with one in nine in 2009.
Specialty coffee is growing even faster – in 2013 alone over 300 new independent coffee shops opened across in the United Kingdom, and Grind has been at the crest of this movement since 2011. Now we are one of the largest providers of speciality coffee in London and we expect to serve over half a million cups in 2015.
It’s not just in London that the demand for speciality coffee is growing – the leading cities of the world like New York and Tokyo are also following the same trends. In the US, significant financial investment has entered the sector from some of the world’s leading investors – Blue Bottle Coffee in the US recently raised US$26 million in venture capital from leading tech investor Index Ventures, and La Colombe and Stumptown (both also in the US) have also received significant funding. In 2014 and in the UK, Taylor Street Baristas also received c.£1.8 million in funding via Crowdcube.