Sourced Market – Crowdfunding their way to a retail empire
They say that the UK is turning into an entrepreneurial nation. London is now one of the best cities to do a startup.
Now Sourced Market is not really a start up. They are an independent business that has been going for over 5 years. I met with the founder and CEO, Ben O Brien, to have a chat about his business and expansion plans.
A curated market of artisanal products
Sourced Market started in 2009 as a venture to bring artisanal farmer’s market produce to Londoners. They started with stalls at music festivals selling products from various stalls in Borough Market. They set up their permanent location in a prominent position in St Pancras station and have been thriving there for 6 years.
They curate artisanal products from over 120 suppliers.
This is a profit making, cash flow generating business that is expecting to grow at about20% per annum.
Details of their Crowdfunded Bond
Minimum Issue : £750,000
Interest rate: 8%, Capital repaid after 4 years
Minimum Investment : £500
Probability of default : 0.36%
Why are they looking for investment?
They are looking to expand to 2 more sites in London in 2016, in Marylebone and Victoria. If the max funding target is reached, they will expand to 2 more sites in 2017. This is not their first time trying to crowd fund. A couple of years ago, they raised a friends and family round but got an offer from a VC with food retail experience and went with that option instead.
What these numbers mean, is that they are offering a really generous interest rate at 8%. This was set at this rate as it is about the average rate offered for all the bonds. The founders and early VC investor have decided to raise money via a bond so as not to dilute their equity stake further.
The probability of default is Crowdcube’s internal statistic based on the exisitng business financials and it is supposed to be one of the lowest ratings on the platform. This means, that they are highly likely to be able to meet the interest payment and repay the capital at the end of the 4 year term.
If you treat this as an alternative investment, have some cash that won’t need for 4 years, the term of the bond, then this is a great way to diversify your investment portfolio. You can read all the details and more financial info on their crowdfunding page. As of writing this, there is only 25 days to go and they are already over 60% funded.
