Healthy eating chain Tossed has just reached a decade in business and it is aiming to celebrate the milestone in style by embarking on its most aggressive store roll-out programme to date. Its plans hinge on a successful crowdfunding campaign.
There used to be a time when companies with aspirations to expand their business could only turn to banks for financial support if their own pockets weren’t deep enough. Now, though, there is an additional avenue to go down in the form of crowdfunding, the practice of financing a venture or a project by raising contributions from a large number of people. The fundraising is usually carried out over a pre-defined number of weeks and facilitated by a dedicated website.
Healthy eating chain Tossed has become the latest company from the industry to explore that option in a move to raise the £750,000 that it has earmarked to fuel the next stage of its growth in the market. It is using equity crowdfunding platform Seedrs to manage the campaign, which it hopes will appeal to investors impressed by its success so far.
The business has already secured 24 sites, including six motorway service stations and three stores in Dubai, and is looking to expand into more locations soon. Its shops include key West End and London City locations, such as Covent Garden, Liverpool Street and Baker Street, and it also operates in both Westfield shopping centres and Bluewater in Kent.
Tossed will use the funds raised through the new issue of ordinary shares to accelerate its store opening programme, targeting high street, retail and motorway locations in London and the South East, while it continues to assess the international landscape.
It has brand partners who offer access to sites in airports, railway stations and the motorway network of the UK, and its partner in Dubai has secured three locations this year, including one on the Palm Jumeirah and another in the Airport Freezone. Today the brand employs over 250 people, and its sales grew 30% in its last financial year.
“We believe there is a place for a healthy food operator amongst the big players in the food industry, and that Tossed should be that challenger brand,” comments Tossed’s founder Vincent Mckevitt, who opened the first store in Paddington, London in 2005. “By increasing store numbers we will reach a wider market and offer a healthy choice to more people.”
We believe there is a place for a healthy food operator amongst the big players in the food industry, and that Tossed should be that challenger brand”
Two years ago the business secured £1.5m funding from Santander, which remains supportive of its growth plans. One of the chain’s biggest cheerleaders is Welcome Break, the motorway service station network.
Rod McKie, CEO of Welcome Break, said: “Tossed was the missing piece of our jigsaw — a really great brand that delivers healthy fresh food. Bearing in mind we have an 80 million footfall, a lot more people are going to get to know about it.”
Investors can put in as little as £12.33 for one ordinary, voting share, with various tiered perks also available. This includes 20% off each purchase for one year for £200 or more; 50% off each purchase for one year for £2,500 or more; and 50% off each purchase for life for £5,000 or more.
Now the company must watch and wait to see how much uptake its offer receives. If it hits the magic number then the industry is going to see a lot more of the brand moving forward.
After graduating from university, Vincent Mckevitt spent a period travelling the world in search of healthy food before coming up with the idea for Tossed. The mission was simple: to create a new, healthy and exciting food experience that didn’t compromise on taste or portion size for the UK market.
The first outlet opened in Paddington, London in April 2005 and was an instant hit. It served 120 covers on the opening day and panicked that there were too many people in the store, leading it to close the doors twice.
Three years later the company secured a site at Westfield, London and by the end of 2012 it had nine stores in the capital. Its first motorway store opened last year at the Birchanger Welcome Break service station, taking it to 15 sites. Tossed’s philosophy is to keep food simple, fresh and natural, while it lays claim to being the first made-on-site company in the UK to display all its nutritional information.
Other food and drink brands that have successfully raised finance on the Seedrs crowdfunding platform include:
• Chapel Down, the award-winning winemaker and craft brewer, which undertook the largest-ever equity crowdfunding round in 2014, raising almost £4m.
• Hummus Bros, an award-winning chain of London-based restaurants and pop-ups serving healthy and tasty Mediterranean food, raised more than £300,000 earlier this year.
• Hokkie, a Cardiff-based reinvented takeaway Asian restaurant founded by Masterchef finalists raised £320,000 in June 2015.
• Oppo Ice Cream, which reached its initial investment target of £100,000 within hours of going live and raised £300,000 within just a few days.
A new way of funding
The UK alternative finance market is predicted to grow to £4.4 billion in 2015, up from £1.7 billion in 2014 as businesses increasingly look to source more efficient ways to raise capital. The equity crowdfunding sector alone grew by 410% between 2012 and 2014.