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Freestar

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Award-winning alcohol free beer brand on a mission to champion the new generation of drinking culture.

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Funded 4 May 2023
£350,003 target
£576,768 from 0 investors
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Business overview

Location London, United Kingdom
Social media
Website www.freestar.co
Sectors Food & Beverage Mixed Digital/Non-Digital Mixed B2B/B2C
Company number 11737165
Incorporation date 20 Dec 2018
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Investment summary

Type Equity
Valuation (pre-money) £4.8M
Equity offered 6.75%
Tax relief

EIS

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Business highlights

  • Over 500,000 beers sold
  • Stocked in 400+ stores at Tesco and Sainsbury’s and Ocado
  • Almost one third of pub visits are now alcohol free
  • IPA indistinguishable from 4.3% beer. Lager 2x World Beer Award
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Key features

  • Secondary Market
  • Nominee investment min. £10.42 +
  • Direct investment min. £10,000.00 +

Idea

Introduction

Freestar is on a mission to champion the new generation of drinking culture by bringing great tasting alcohol free beer to the masses.

With almost one third of pub visits being alcohol free, and the global market forecast to be almost $36bn by 2030, the time is now.

It all started when we, Felix (ex Sipsmith) and Eddy (ex Propercorn) realised we could make alcohol-free beer that tastes just like full-strength beer and in a sustainable way.

We envision a world where every pub has alcohol-free beers on draft, and there isn't a stigma around ‘not drinking’.

Since launch we have

- Won the World Beer Award (twice!)

- Created an IPA indistinguishable from full-strength beer.

- Stocked in Sainsbury's, Tesco and Ocado.

- Became the world's first AF beer to certify as a B Corp.

- Launched a Mentoring Hotline.

- Had our biggest-ever start to a year, with online sales growing by 380% (Jan 23 vs Jan 22).*

To make this vision a reality, we need your support. So, beer lovers, join our crowdfunding today.

*based on unaudited management accounts.

Substantial accomplishments to date

2019

- Quit our jobs on the same day and bootstrap the launch of Freestar
- Have the first pallet delivered to our flats because we didn't have a warehouse
- Had to re-label – by hand – 3,000 wonky labels
- Our first World Beer Award!

2020

- Launch in Ocado and Sainsbury’s for our first Dry January
- First capital raise - £1.1M invested by founders and execs from companies such as Sipsmith, M&S, Crussh and Gleam Futures
- Covid: pivoted the business online and built a webshop in less than a month. At the peak, Amazon alone was selling 1.5 beers a minute
- Launch a mentoring hotline for unemployed youth
- Re-brand - our signature red identity is born
- Became the world's first alcohol free beer to certify as a B Corp!

2021

- Decide to move our production (twice!) to improve consistency and solve quality issues
- Determined to improve the beer even further, we decide to re-make the recipe. Gulp

2022

- Re-make the recipe - trial 3 breweries in 3 different countries. The Belgians knock it out the park!
- Stocked in 300 Tesco stores!
- Win the World Beer Award! (again)
- Launch a limited edition IPA for the Women’s Euros
- We win the Women’s Euros!
- IPA gets listed on Ocado
- We sell our 500,000’th beer!

2023

- Have the biggest-ever start to a year, with our website alone posting 380% growth in Jan ‘23 vs Jan ‘22. Selling 1000 beers a day
- Kick off our first-ever crowdfund to let our community get in on the action and back us

Monetisation strategy

We generate revenue through the sale of beers into retailers, via wholesalers and direct to customers online.

We have an omnichannel approach to build a resilient business and capture growth. The big focus is to get Freestar on tap for the best possible experience of our beer.

Three key channels:

On trade: We have national stockists from Dishoom to Pho to Kricket to Maison Bab and we’ll continue to target multi site hospitality groups with draft listings.
Off trade: The lager is in Tesco, Sainsbury’s and the IPA and Lager is on Ocado. We are targeting increased distribution in all the big retailers for Lager and IPA.
Online: Our online sales were up 380% in January vs Jan 22. We’ll launch a subscription and new pack formats to increase AOV and recruit new consumers.

2022 split
53% Off Trade
37% On Trade
10% Online

Use of proceeds

We’ve got a great product, in a white hot market, with a strong distribution footprint and run by an experienced team. Furthermore, we believe we have the know how and the vision to put our award winning beers on taps up and down the country. What we need now is your investment to support three key areas:

35% - Grow our team: Behind great beer are great people. We will recruit the best sales team to get Freestar on draft in a pub near you! Our plan is to have 100 taps by the end of 2023, and 2,750 by the end of 2027, or 1 tap every 34 square miles in the UK! i.e you’re never more than 30 minutes from a pint of Freestar!

34% - Marketing: Paint the town red. Well, the fields, more accurately – we aim to lock in a strong festival and activation plan to grow awareness and sample our beers up and down the country getting ‘liquid to lips’ and recruiting consumers at the point of sale.

31% - Working Capital: To build our stock holding as we grow.

Key Information

Debt

The company has the following outstanding loans:

- £16,700 Virgin Start-up loan from The Enterprise Fund Limited at an interest rate of 6% per annum. The loan is to be repaid in monthly installments of £386.08 with a final repayment date of 1st January 2025.
- £33,655 Bounce Back loan from Natwest at an interest rate of 2.5% per annum. The loan is to be repaid in monthly installments of £741.75 with a final repayment date of 22nd February 2026.
- €17,920 Scramble loan at an interest rate of 12% per annum. The loan is to be repaid in monthly installments of X with a final repayment date of August 2023.

The funds raised from this investment round will not be used to repay these loans.

Trade Creditors

The company has the following trade creditors:
- £12,055 to Codestorm - website fulfillment house
- £11,785 to Diamondpak - cases manufacturer
- £25,441 to N20 - sampling provider

Commission Agreements

The Company has agreed the following commission arrangements with its advisors and consultants:

If Dom Smales sources celebrity or influencer investment into the Company, he will be entitled to receive a number of shares equal to 10% of that investment.

If Pete Goldsmith sources investment into the Company from any Premier League footballer, he will be entitled to 6% commission on the value of that investment (3% paid in shares, 3% paid in cash), at the same share price as the investment.

If Chris Fung sources any investment into the Company, he will be entitled to 5% commission on the value of that investment (in cash or equity), at the same share price as the investment develops a product that is marketed by the Company, he will receive 1% plus VAT of the Company’s total gross revenue.

Please note that the above may therefore result in future dilution

Investor Perks

Please note that any discounts, rewards and/or offers listed by a company in its campaign are subject to the terms and conditions applied by that company. It is the company’s responsibility to honour such discounts, rewards and/or offers and Seedrs does not take any responsibility for them.

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Investing involves risks, including loss of capital, illiquidity, lack of dividends and dilution, and should be done only as part of a diversified portfolio. Please read the Risk Warnings before investing. Investments should only be made by investors who understand these risks. Tax treatment depends on individual circumstances and is subject to change in future.

This campaign for Freestar has been approved by Seedrs Limited (trading as Republic Europe) ("Republic Europe", "us" or "we"), as of 24 March 2023 as a financial promotion. Republic Europe is authorised and regulated by the Financial Conduct Authority with firm reference number 550317. In approving this campaign, Republic Europe has concluded that the information, taken as a whole, is "fair, clear and not misleading." This means that for factual statements we have reviewed evidence of their accuracy, and that for aspirational statements we believe they are phrased appropriately in light of their speculative nature. You should note that in the case of factual statements, the evidence we review is provided by the business, and we do not audit it, which means that we may not be able to identify forged or altered evidence. You should further note that in the case of aspirational statements, the nature of the type of businesses presented on the Republic Europe platform is such that they are likely to have high ambitions, and we may approve statements that convey those ambitions even where we do not believe, or we do not have a view on whether it is likely, that they will be fully realised. The pre-money valuation and investment sought in the campaign are those set by the business: they are not reviewed or established by us, and the valuation is not an independent view of what the business is worth. Given the nature and type of businesses presented on the Republic Europe platform, it is possible that the business has very little cash remaining prior to receiving this investment, and the investment sought may be necessary for the business's on-going existence.

Republic Europe does not make investment recommendations to you. No communications from Republic Europe, through this website or any other medium, should be construed as an investment recommendation. Further, nothing on this website shall be considered an offer to sell, or a solicitation of an offer to buy, any security to any person in any jurisdiction to whom or in which such offer, solicitation or sale is unlawful. Republic Europe does not provide legal, financial or tax advice of any kind. If you have any questions with respect to legal, financial or tax matters relevant to your interactions with Republic Europe, you should consult a professional adviser.

Tax Relief (SEIS)

This business is eligible for SEIS relief - providing qualifying investors with income tax relief of 50% of their investment and certain other tax reliefs. Tax treatment depends on individual circumstances and is subject to change in future. Click to learn more.

Tax Relief (EIS)

This business is eligible for EIS relief - providing qualifying investors with income tax relief of 30% of their investment and certain other tax reliefs. Tax treatment depends on individual circumstances and is subject to change in future. Click to learn more.

Valuation (pre-money)

Valuation rounded from £4,833,838

This is the fully-diluted pre-money valuation of the business (i.e. before the new investment comes in and including issued options and other equity interests). In contrast, the post-money valuation is based on inclusion of the new investment in the value.

It is calculated as the pre-money valuation plus the amount of new investment. e.g. If Company A is ascribed a pre-money valuation of £1,200,000 by prospective investors investing £300,000, its post-money valuation is £1,500,000.

The investee business is responsible for setting its own valuation, it has not been prescribed by Seedrs.

Pitch type

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Equity Offered

The equity offered is the percentage of the company’s shares being issued in return for the amount of investment raised.

When the amount raised is less than 100%, the equity offered is based on the target raise. Once the company has raised over 100% it is based on the total raised.

In some scenarios, entrepreneurs may accept additional direct investment after closing their Seedrs campaign. Provided this is within 6 months of the closing and on the same terms, we do not typically offer pre-emption rights on that extra investment (where you have the opportunity to invest again to maintain your percentage shareholding).

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Nominee investment

This shows if you are able to choose, when making an investment, that you be represented by, and your shareholding be managed by, the Nominee investment.

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Custodian

If you invest in this Campaign, Seedrs will act as Custodian rather than provide our standard nominee service. This is due to the fact that the business is not directly involved in the share sale and Seedrs will not benefit from any rights under a shareholder agreement. As a result, Seedrs will handle administrative tasks as we do normally, but you will not have information or voting rights, updates from the business, preemption on future fundraising, or ongoing support about business trading activity.

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Secondary market

This shows if the business has opted-in or opted-out of allowing its shares to be bought and sold on the secondary market.

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Direct investment

This is an option to invest and hold shares 'directly' in the company (rather than via the Nominee investment). This option is only available to those investing over the threshold amount, which is determined by the fundraising company.

If you choose to hold your shares directly, you will be responsible for any contractual or administrative arrangements with the company you are investing in.

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Payment options

We are not able to accept card payments for investments into this sector. You can pay for your investment by creating a bank transfer, using funds in your investment account or create a Pay by Bank payment. Your investment will only be completed once the funds have reached our account.

Business Involvement

This Campaign offers shares for sale in business that is not directly involved in this Campaign or the sale. As a result, the Campaign and post-investment experience, including investor rights, will differ from a business-led campaign on Seedrs. Most notably, the business will not engage with investors in the discussion forums both during and after the sale or provide any updates to investors.

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Payment options

We are not able to accept Pay by Bank payments for investments into this sector. You can pay for your investment with a card payment, by creating a bank transfer or by using funds in your investment account. Your investment will only be completed once the funds have reached our account.

Drawdowns

This campaign offers the ability to pay for an investment by drawdowns.

Security Token

A security token is a digital asset that represents ownership or other rights. It is a digital form of traditional investments. In the future, you may be able to trade your investment through compatible exchanges.

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