Knoops raises £5 million through a deal valued at £34million. The chain of fast-growing chocolate drink cafes aims to open 5,000 outlets worldwide within the next decade.
Since William Gordon-Harris first tried a Ugandan hot chocolate with 80 per cent cacao at a small cafe in Rye in Sussex in 2019, the business has taken off. Later, he teamed up to expand the brand with Jens Knoop’s German cafe founder.
Gordon-Harris stated that Knoops has 21 stores and aims to have 300 “within the next few years” in the UK. “We will embed drinking chocolate on the high-street and in homes, just as Starbucks and Nespresso did for barista espresso.”
Gordon-Harris’s business plan was inspired by a Knoops shop located in Rye East East Sussex.
Last year, Knoops’ website sold chocolate flakes worth more than £1,000,000. These flakes are used to make hot cocoa in home coffee makers. The product is available at Harrods Selfridges Whole Foods.
Gordon-Harris said, “This is the beginning of a chocolate Revolution.” Gordon-Harris claimed that “this is the start of a chocolate revolution.” He said this to middle-class white men in investment meetings who would say they like hot chocolate while skiing. I then take them into their offices and show them their PS1,000 coffee maker next to a Pot of Cadbury’s Hot Chocolate Powder, and tell them 30 years ago there was a Maxwell House box of coffee. “We’re only at the beginning of our journey with chocolate.”
Knoops’s £5million fundraising via the government-backed Enterprise Investment Scheme will include £1million raised by its customers through Crowdcube. Perks include private chocolate tasting events.
Alice Avis and Julian Metcalfe, founders of Hotel Chocolat and Pret a Manger , and Itsu, as well as Andrew Gerrie, co-founder and investor of Lush, are both former chairs of the rival chocolate cafe chain Hotel Chocolat .
Knoops revenues have more than doubled from £4.3 to £9.3 millions in the last year. The sales of stores that have been open more than one year increased by 29 percent. On a comparable basis, underlying earnings increased by 131 percent to £979,000.
Knoops will open its first overseas outlet in Dubai next month. Gordon-Harris said, “The UK is just our test market. There’s no place that our product doesn’t work.” I received a call from Australia this morning, and we are looking at South Korea and Mexico as well as China, India, and America. We will have 3,000 to 5,000 stores in our global footprint. Scalability is easier for us because we don’t prepare food.
“Our stores are very profitable so we can build using sensible debt instead of huge fundraisers.” As we improve our estates, landlords also give us increasing capital contributions. We will begin with franchises in America and China, then move to equity-owned shops as Knoops expands into these countries. “We will be a unicorn of chocolate.”
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