Our series “International Inspiration & Home Truths” shares some of the crowdlending stories we’ve heard from across the globe, and brings that inspiration back to Aotearoa. You’ll find out what’s happening overseas, but also hear from some of the enthusiasts who’ve helped us to imagine what crowdlending could look like for a range of kiwi organisations. The second area we’re diving into is craft beer (one of our favourite things).
The UK is dominating the craft beer crowdfunding market
BrewDog are arguably leading the way internationally on the crowdfunding front. They’ve done four rounds of Equity for Punks, and have raised over £26million ($49million NZD) from 50,000 investors for their Scotland-started craft beer company.
It all started with two men and a dog. Their first pitch video in 2009 shows much younger, less hip versions of the founders James Watt and Martin Dickie. They stand earnestly in front of their brewery kit sharing their big plans for their beer.
Equity for Punks from BrewDog on Vimeo.
They took a huge leap, from starting in 2007 to becoming a publicly listed company in 2009. Their first round closed in February 2010 and saw the punk founders raise over £642,000 from 1,350 investors. Their early supporters not only got shares in the company, but also beer discounts and an invite to the annual general meeting, which you could literally call a piss up in a brewery. Though, now it’s a piss up over 10 different bars. Here’s a video recap of their latest AGM:
Not ones to shy away from bold statements, in 2015 during their Equity for Punks IV round the founders took to a helicopter and dropped taxidermied “fat cats” onto the city of London. Over the following 12 months they raised over £19m from their crowd, making it one of the largest crowdfunding campaigns in history.
But, their latest move into the crowdlending space is arguably their most exciting move yet.
“This is funding for the 21st century”
Their BrewDog Bonds II were launched late 2016, and they raised their maximum goal of $10million from 2,699 investors in less than 30 days.
Their mini bond offered their investors a 7.5% interest rate over four years, as well as beer discounts. The bonds were focussed on accelerating growth, both in the UK and in America where they are currently building a new factory in Ohio.
Today, Brew Dogs have held the title of the fast growing food and beverage company in the UK the last four years, and have been profitable since 2008. They have revenue exceeding $70million, over 800 “passionate people” working for them and 50 brew bars all over the globe.
Recently, BrewDog’s sold 23% of their company to TSG Consumer Partners for £213m, which gives their investors from their first round in 2010 a 2,800% return (though, they are capped at selling 40 shares in this round of shareholder buy backs).
And the UK influence has sailed across the sea to Ireland
You don’t have to be a monumental punk-backed beer behemoth to borrow from your crowd. Local independent brewery from County Wicklow (where Barry’s clan are from!), O Brother Brewing, borrowed a modest €20,000 from their crowd to expand their brewery and create an experiential tour for the passers-by.
One of the three-brother strong team, Padhraig O’Neill reflected on their experience “The idea of peer-to-peer lending really appealed to us. Promoting our business and the hassle-free process was great, it is the future of business finance.
Closer to home
While these have been intriguing developments in the Northern Hemisphere, we’ve been really excited about what it could mean for craft beer companies closer to home. Because craft beer and crowdfunding seem to be a match made in a beer-fuelled heaven.
We’ve seen two swift and well supported campaigns through PledgeMe for Wellington-based craft brewers. First up with Yeastie Boys, who raised their half a million goal in half an hour in 2015, followed by the Matts at ParrotDog raising their goal of $2million in two days the following year.
So we’ve asked some of our smart friends (and alumni) to tell us what they think. What could crowdlending mean for the beer makers in (or from) Aotearoa?
Who are you, and what do you do?
I’m Stu McKinlay, accidental entrepreneur, Benevolent Dictator and co-founder of Yeastie Boys. I make people happy with delicious beer in pretty designs.
What do you think about crowdlending?
My initial thoughts around crowdlending is that it’s fantastic to see the modern market adapt to the opportunities that present themselves from us being so connected. To me funding and lending through the crowd is simply an extension of the way many people used to fund businesses and projects, via their friends, but the process can be sped up now thanks to technology.
Could something like the BrewDog bonds happen in New Zealand?
It will happen in New Zealand! I have no doubts.
What are your concerns about crowdlending in New Zealand?
The concerns I have about crowdlending are pretty much the same as crowdfunding… simply that people are educated around what the risks and rewards are.
What excites you about it?
I’m always excited by things that create more opportunities for competition… crowdlending, like crowdfunding before it, gives so many more people the opportunity to build their business in a way that would not have been available to them a few years ago. With people who would have never known that the business even existed, let alone been looking for capital. It builds a community around business growth rather than having a bunch of banks doing everything.
Inspired? Curious? Want more than a sip? Chat to us!