Hummus Bros

Idea

Convertible Details

This investment round is being raised by way of a convertible instrument.

The key terms that apply to the Hummus Bros convertible are as follows:
► Discount – conversion at a 25% discount to the valuation set by a Trigger Event.
► Valuation cap of £9,000,000
► Conversion is triggered by ("Trigger Events"):
◆ An Equity Fundraise – defined as the Company raising investment capital of at least £250,000 from one transaction or a series of transactions, in exchange for the issue of Ordinary Shares. The Seedrs fund raise does not count as a transaction;
◆ A Change of Control of the company (transfer of more than 50% of the share capital); or
◆An IPO – being a listing of the company’s shares on a recognised stock market or secondary market.
►Longstop Date is 12 months from the date of the convertible agreement.

If conversion has not been triggered by the longstop date shares will be issued on the longstop date at a valuation based on the lower of (i) a pre-money company valuation of £6,000,000; or (ii) the price for any share issued after the date of the convertible agreement. The convertible would also convert to equity at this price in the event of winding up or liquidation of the company.

Introduction

We currently operate 6 high street locations and 40 popups a month in canteens of large offices such as Goldman Sachs, PWC or Morgan Stanley.

We serve healthy & tasty Mediterranean food including hummus bowls topped with mouthwatering toppings such as beef stew, sauteed chicken, guacamole or falafel and accompanied by pitta bread. We also serve home made soups, quinoa-based dishes, salads and desserts.

We intend to expand further by opening more high street locations, operate more canteens and sell our preservative-free hummus in supermarkets. To do this we would use High Pressure Processing (HPP) technology which extends the shelf life of the product without changing our award winning recipe. We found that there is a lack of hummus brands in supermarkets, only the supermarkets' own label. We believe that we could capture a significant share of this £150m market and grow it by offering our better quality hummus.

Intended impact

Over the past few years we have observed the popularity of Mediterranean food and hummus in particular increase significantly. We have been making our food available by first opening high street restaurants and more recently directly in canteens of large offices around London. We are now looking to make our hummus available in supermarkets.

Our menu offers healthy options including ones for vegans and vegetarians as well as for our customers that have food intolerances to gluten, lactose or nuts.

We are hoping to make our wholesome, freshly-made, preservative-free food available more widely so that more people can adopt a healthy diet.

Substantial accomplishments to date

Over the past 10 years we have had a number of accomplishments.

We have opened 6 high street locations and operated 490 popups in corporate restaurants in 2016.

We have been named one of Time Out's Top 50 restaurants in London as well as regularly featured in their Top Cheap Eats. Hummus Bros has been featured in a number of publications such as the Evening Standard, The Drum, The Telegraph, The Financial Times, etc (our press coverage is available at www.hbros.co.uk/press).

In 2014 we released our first cook book packed with 60 of our best recipes.

In December 2016 we were granted an alcohol licence for our Soho branch.

We have also launched a number of new products such as our wraps, soups, Shakshuka and quinoa.

Monetisation strategy

In 2016 we turned over £2.59m* from our six restaurant locations, popups in corporate restaurants and deliveries to offices around London. These all operate predominately on week days at lunchtime.

We are looking to continue innovating with new products and how these are delivered to our customers to increase the revenue from all our current channels.

We are hoping to increase our turnover over the next 12 months by opening 1-2 more high street locations and increasing the number of popups that we operate.

*Source: unaudited management accounts.

Use of proceeds

We have opened 6 branches over the past 10 years which have cost as low as £75k to acquire and refurbish (depending on the size of the unit and the rent).

We'd expect to use up to £125,000 of the proceeds to open one more branch.

The maximum we will seek is £500,000 in which case we will open up to 3-4 more branches (£400,000) and move forwards with a launch of Hummus Bros branded products in supermarkets.

The business currently has a £25,000 bank loan as well as a £176k bond repayable in 2020. None of the funds raised will be used to repay these debts.

Please note that the company has classes of shares that rank in preference to the shares that Seedrs investors will receive. Shareholders with these shares will first receive the amount they invested and will then participate in the distribution of any funds remaining. The amount invested in these shares is worth £306,605.