Chilango hits £800,000 in two weeks with crowdfunding scheme
Mexican fast casual restaurant group Chilango has raised £800,000 in just over two weeks through a crowdfunding initiative called the "burrito bond".
The scheme, which aims to raise £1m to help the business expand, is administered by online finance service Crowdcube and was officially launched on 10 June this year. It will see investors offered an 8% per annum return over four years.
Crowdcube has a crowd of 73,000 registered investors and Chilango has also targeted its own customer base and the general public with the scheme.
In addition to the 8% per annum return, bondholders will receive other benefits including two free burrito vouchers to all those that invest, a VIP bondholder party to the first 100 to purchase a Burrito Bond, and those that invest £10,000 or more will be entitled to free food for the duration of the bond.
Chilango's co-founder, Eric Partaker said: "Our Burrito Bond is the perfect way for us to engage with our loyal following as well as Crowdcube's investor base and accelerate our expansion plans with additional growth capital. As big fans of Mexican food we love everything that is vibrant, fresh and fun and Crowdcube is all of these. Its mini-bond platform is a breath of fresh air among the complexity and expense of existing solutions."
Luke Lang, co-founder of Crowdcube, said: "For customers and investors, the opportunity to invest in companies they already know, and want to support, as well as receive a regular financial return on their investment is appealing."
It is not the first time a company in the leisure and hospitality sector has attempted to raise money in this way. Brewer and bar operator BrewDog adopted a similar scheme last year called Equity for Punks, setting a target to raise £4m. It raised £3m within the first two months of the scheme alone - less than a third of the amount of time it expected.
BrewDog made 42,000 shares available to anyone to buy online at £95 each, ignoring traditional methods of funding to finance its expansion.
Under that scheme, investors received equity in the business, as well as a lifetime 5% discount in BrewDog bars and a discount of up to 20% in BrewDog's online shop.
Former Skype executives Eric Partaker and Dan Houghton launched Chilango in 2007, with their first restaurant in Islington, London. The business now has seven sites, all in London.
