Black Sheep Coffee, the specialist independent coffee shop chain, has raised £13m in funding from private investors, bringing the firm’s total funding to £25m since inception of the company back in 2013.
Funding from private investors include: Tellef Thorleifsson, first investor in Spotify, CEO of Norfund and co-founder of Northzone Fund; Bill Shultz, President of Coca-Cola Canada and Board member at Coca-Cola Global; Tore Myrholt, currently Chairman for the Board at Antler and former chairman of McKinsey Consulting Group; and finally, Jacob Schram, former CEO at CircleK. The funding will allow Black Sheep Coffee to continue its global expansion, with the aim of growing its existing number of sites from 34 to 70 by the end of 2019.
Black Sheep Coffee was founded in 2013 by Gabriel Shohet and Eirik Holth, who are also co-CEOs of the company. The brand has achieved a 25 per cent like-for-like sales growth across the last two quarters (Q4 2018 and Q1 2019). It has also increased annualised turnover by 56 per cent between Q4 2018 and Q1 2019 from £8.5 to £13.3m and aims to reach £25m annualised turnover by the end of Q4 2019. This is testament to the founders’ ambitious growth plans, which are only set to continue as Black Sheep Coffee continues to grow globally. Pre-money valuation for the funding round was £96.2m, bringing the company’s post-money valuation to £109.2m.
By not going down the VC and PE route, Black Sheep Coffee’s founders aim to preserve the company’s independence and their long-term vision for the brand. Top-tier private investors from the tech, consulting, finance and retail industries add to high-profile investors in earlier rounds including CFO of Carluccio’s Frank Bandura, Le Pain Quotidien’s Ian Zilberkweit and celebrity poker players Martin Jacobson and Mustapha Kanit.
The funding will go towards the company’s global expansion throughout Asia, the U.S., France, Germany, Switzerland, Austria and the GCC region, starting with UAE this summer. Black Sheep already has a presence in Manila and is looking to open one more shop in the Phillipines before the end of the year. In addition, Black Sheep Coffee will look to further develop its newly launched e-commerce platform, where customers can buy the Black Sheep coffee beans, gift cards, branded bamboo reusable cups and Black Sheep hoodies and t-shirts. The Black Sheep Coffee beans are also now available to buy on Amazon and through subscription.
Black Sheep Coffee’s inspiring corporate social responsibility efforts and sustainable model have contributed to loyal and dedicated private investors and a growing customer base. Having gone plastic-free back in 2014, the coffee shop is now helping the homeless people in their communities, as well as ensuring that their farmers are treated as well as their customers.
Gabriel Shohet and Eirik Holth, co-founders and co-CEOs of Black Sheep Coffee, said: “We started Black Sheep Coffee to challenge big corporate brands on their sustainable approach, and rid the world of boring, average-tasting coffee. We have made a conscious effort to stay clear of institutional investors in order to keep our independence and long-term vision for the brand. As we continue to grow globally, we’ll continue to adhere to our core values: sourcing the best beans in the world, hire the best baristas in town, get rid of plastic, support our homeless communities, never fear competition, open right next door instead.
Tellef Thorleifsson, first investor in Spotify, co-founder of Northzone Fund, said: “I’m really looking forward to seeing how Black Sheep Coffee continues to grow and take the specialist coffee industry by storm. Black Sheep Coffee is on a transformative journey and its tagline to “leave the herd behind” is a true embodiment of what Eirik and Gabriel are achieving as they continue to stand out from the crowd.”
Bill Schultz, President of Coca-Cola Canada and Board member of Coca-Cola Global, said: “Black Sheep Coffee is truly differentiated from the other premium coffee shops, with unique coffee drinks, food and atmosphere. The founders have built an amazing team, driven by their vision and united by the company values. Whether you experience Black Sheep as a patron in their shops and online, or as an associate, supplier or investor; this is an exciting brand to watch!”