This one almost went under the radar
Hmmmm…Crowdfunding something that already has a £1.8bn valuation is not for me
surely it should be listed at that valuation?
I think their rationale is to expand their customer cum equity holder base by the looks of it as they’ve already raised £21m before putting it on CC and also they’re still in growth mode apparently. Ultimately, I think it’s an engagement play for their platform as much as a fundraise.
I’m not too clued up on BrewDog other than being aware of their success, so hoping someone else more familiar with BrewDog chimes in on this one.
I’ve been in the 2013 and 2015 rounds. It was more niche then, particularly the earlier one, and it was people who liked the product and wanted to support it, and hopefully make some money as well. This current round, which has been running for nearly a year, is, I would guess, looking to expand the community, getting more champions on board. They started off with a good product - at exactly the right time regarding customer willingness to pay - and have done a fantastic job of creating something more than simply a product out of their offering. They’re pushing 100k investors now, so that’s a whole lot of people wanting the company to do well, buying their beer, telling their friends about it etc. I suppose the proof will be in the pudding when investors can actually trade, and the market will decide if the valuation is right, but this is certainly one I’m happy to have been part of, and will continue to buy the beer even after I sell my shares (whenever that might be).
I guess the question is do you draw the line? Revolut & Monzo have both done / are about to do crowdfunding rounds with billion plus valuations.
As long as crowdfunding investors are buying in on relatively equal terms to the VCs in terms of valuation etc. then you could argue that it’s good that the general public are getting to invest in these exciting up & coming companies. How sophisticated those investors are is a concern of course but if individual’s investments are capped at a fairly low amount then that helps minimise the risk.
I could be missing something there of course?
My concern is risk/reward, how much bigger can a brewer valuation realistically get? and what are the chances of that happening? vs what are the chances of the valuation falling dramatically base on some random bad news?
I bought into the current round last year but not via Crowdcube. I buy and drink the product, just wanted to be able to tell my friends that I own a part of it (!) and if I make any money from the shares at some point, then it’ll be a bonus but it’s not a serious investment for me.
They’re already expanding out of just brewing and have opened their first hotel in the US, aptly named the ‘DogHouse’!
The valuation of 1.8B is just insane with only 10M EBITDA + some growth potential. But the more we doubt the more it’ll probably go higher at least while it’s private.
This is not for me as well in terms of risk/reward, there are better breweries with huge brands, dividend paying, liquid and listed on the market selling at bargain from Emerging markets.
I don’t think it’s about the cash at all, by offering those rewards for £95 all they are doing is giving ordinary folk the chance to invest in something they love. The investment is much greater than £95 with the additional buy in to the brand.
I suspect if it’s anything like Monzo, offering people the chance to invest modest sums probably costs them a fair bit of cash to do!
Nah, I’m all in Freetrade
They’re definitely moving to a lifestyle brand as opposed to a craft beer brand and they’re getting into the whole experiences space, hence the hotel. But I can’t, didn’t even request the pitch deck
Interesting Can you name them?
I’ve invested back a few years ago and I think it is an attractive opportunity at £1.8bn; Brewdog is one of the fastest growing businesses in UK and have a strong devoted community. For peer comparison, Fever tree is similar in a few aspects (growth, financial performance, key metrics etc) and has a market cap of £4.36 bn.
Brewdog being a strong brand and established business, we’re unlikely to see any crazy return multiples. However, there’s been hints of an IPO on the horizon so investors could potentially realise 100-300% returns over the next 2-3 years - I would consider that pretty good for the risk involved. Not to mention the beer perks are awesome
Personally I think there are a number of unsophisticated investors on the platform.
Crowdfunding is extremely high risk. Expectations need to be set that a number of companies will go bust - Whether it’s fraud, incompetence, bad luck, etc. People also need to understand that cash will be tied up for 10+ years.
Sugru highlighted this. Also, on the Brewdog forum people are complaining about lack of liquidity… a number of these people have earnt returns in the thousands but are still not happy.
It will be a challenge for crowdfunding platforms to strike the right balance between encouraging investment and making sure people are educated.
Other platforms like OurCrowd require a conversation before allowing investments.
Good point about liquidity, When crowdfunding you’re sacrificing the liquidity for potentially very high rewards (along with high risk), if the valuation is too high at the start the probability of getting multi-bagger become very small even if the company is a success. You need to put a lot in to get a lot back. At that valuation I’d rather look at listed companies where I can sell straight away.
In saying that, I got in on EFP4 and topped up my investment this round. Given equity markets are so high I think BD has a strong chance of significantly beating the markets. The founders are very switched on and seem to make good commercial decisions based on data.
They also openly talk about the stuff they get wrong and are very transparent.
I’m a happy repeat investor in BD, the liquidity is frustrating, but I’m not intending to sell anyway. Their attempts to sort out their own platform seem to have stalled, but I am still surprised to see them on Crowdcube now, especially given the target was £15m and that was met, I’m not sure why now they’re listing there for another couple of mil, I can only think it’s for additional exposure.
I still think they have a way to go, the US expansion could be massive, especially given their relationship with the big boys like Stone. They still hold exclusive rights with some foreign brewers, which is really important in the current craft boom, and gives them an edge over competitors. I’m disappointed that they turned their focus to the US, and they certainly have sold out with their increased focus on lagers, but hey, from an investor standpoint they’ve been flying regardless. Can’t say I’m looking forward to spending time in the new Canary Wharf bar, even though I inevitably will.
They have also talked about China. No update in a while so it may have flopped, but could be huge for them if they make it work.
The only craft brewery on 3 continents sounds somewhat promising (screenshot of BrewDog response in the CC discussion):
Another good example of an Equity Punk exclusive benefit
I’ve snapped up my early bird tickets, if anyone is going to be there, give me a shout