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Cool Cold Brew

Platform:
Crowdcube
Stage:
Seed
Industry:
Food & Drink
Location:
UK - North West
Date Rated:
01/08/17
Raise:
£100,000
Equity:
16.67%
Valuation (Pre Money):
£499,880
Industry: Food & Drink
Location: UK - North West
Platform: Crowdcube
£100,000 Seed
Valuation: £599,880
Date Rated: 28/07/17

MANAGEMENT

PRODUCT

INVESTMENT
Tax Status: SEIS & EIS

Business Summary

Cool Cold Brew is a chilled coffee drinks brand aiming to disrupt the market with healthier drinks brewed for over 16 hours in freshly filtered water. Cool Cold Brew has been developing the drinks during the last 18 months and is already in discussions with retailers. This round of investment will be mainly used to grow the distribution network, to fund marketing and further product development.

Financial Overview

Date (y/e) May-18 May-19 May-20
Sales May-18£142,786 May-19£540,470 May-20£1,444,900
Gross Profit May-18£56,850 May-19£235,207 May-20£646,765
GP as % sales May-1840% May-1944% May-2045%
Overheads May-18£92,650 May-19£178,300 May-20£460,300
Operating Profit May-18-£35,800 May-19£56,907 May-20£186,465
OP as % sales May-18-25% May-1911% May-2013%
Closing Cash May-18£64,200 May-19£121,107 May-20£307,572

Note: This financial information has been sourced from the company on 31/07/2017. Financial data is NOT verified by Wheatfromchaff Ltd.
47%
SKILLS:
EXPERIENCE:
COMMITMENT:
The Founder has covered most of the roles from the outset. The marketing role has been recently covered but further key roles need to be filled to support further product development.
This is the Founder's first venture and he has limited managerial experience. He will however be supported by a wide range of experienced advisors.
The Founder has invested significant time without any salary to date and over £22k into the business, although £15k of the Director's loan will be repaid in the short-term.
68%
MARKET:
PRODUCT:
COMPETITION:
Although the Ready-To-Drink Coffee is still a niche in the UK valued at £140m, it has experienced rapid growth and is ripe for further innovation to gain customer attention.
The first range of products is ready to be launched with interested retailers and the company aims to expand its offering into the alcoholic beverage market and the health and fitness sector.
The company intends to compete through a healthier approach to differentiate its product and to stimulate more frequent consumption.
54%
PROFITABILITY:
CASHFLOW:
RETURNS:
Given the marketing effort and the expected support from a Head of Sales, the projections seem reasonable but are dependent on achieving listings in top retailers like Sainsburys.
Revenue can drop by a third before further funds are required and the outsourced manufacturer will help to manage the cash flows while the company grows.
The projections provided only extend to three years and if an exit happens then investors should only expect modest returns given the high level of current risk relating to customer adoption.


Conclusion

Although Cool Cold Brew is still in early days, the company has great potential as the RTD coffee market is rapidly growing thanks to the millennial movement. However, investors should note that further key roles need to be filled if the company really intends to develop many more products and to commence European expansion within two years.

If the team gains any commercial traction, a further investment round would be needed. Therefore investors will need to invest a minimum of £2.5k to secure pre-emption rights.

They would also benefit from a 15% lifetime discount and the superior SEIS tax scheme.

Related Links

Crowdcube Pitch

www.coolcoldbrew.co.uk

 

Right To Reply

Joe Devereux-Kelly, Founder & MD comments:

Although Cool Cold Brew maybe my first venture, the sheer fact I have started the business from the ground up and kept the business going for just under 2 years provides testament to my ability as a founder. With 9 out of 10 businesses failing within the 2 years, we have already surpassed this point with a shoe-string budget and demonstrated we can handle business challenges and turn them into positive outcomes.

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The Ratings we publish have been approved and issued at Financial Promotions in the United Kingdom by Wheatfromchaff in the United Kingdom who is Authorised and Regulated by the Financial Conduct Authority FRN: 751017. Wheatfromchaff Limited registered office is Kilver Court, Kilver Street, Shepton Mallet, Somerset, BA4 5NF and telephone number +44 (0) 1749 347 577. Telephone calls may be recorded. VAT No: 214 0196 49

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