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MunchFit

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Backed by the Brownlee brothers, the F&B brand on a mission to disrupt the world of fitness.

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Funded
£700,000 target
£773,239 from 0 investors
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Business overview

Location Margate, United Kingdom
Social media
Website www.munchfit.co.uk
Sectors Food & Beverage Mixed Digital/Non-Digital Mixed B2B/B2C
Company number 08655512
Incorporation date 19 Aug 2013
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Investment summary

Type Equity
Valuation (pre-money) £6.2M
Equity offered 10.18%
Tax relief

EIS

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Business highlights

  • Meals assessed by Brownlee brothers' nutritionist, Nigel Mitchell
  • Partners include Virgin Active, Equinox and Men's Health
  • Over 3,000 meal plan subscriptions delivered since D2C launch
  • Record revenues achieved in Q1 2022*
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Key features

  • Secondary Market
  • Nominee investment min. £10.80 +
  • Direct investment min. £25,000.00 +

Idea

Introduction

MunchFit has served over 700k goal-based meals to help people reach optimal fitness and nutrition, with its products sold via retailers, cafés, and directly to consumers online. Offering affordable premium or simply high quality, prepared-food options to the UK market, MunchFit is ready to grow further with new business lines and support from noted investors like Spencer Matthews and new ambassadors, the Brownlee Brothers.

Substantial accomplishments to date

From the humble hustle of a personal trainer to elite partnerships and national deliveries, it’s been quite the journey.

· Through partnerships with leading gym brands and major retailers like Ocado and Amazon Fresh, MunchFit has achieved record revenues in Q1 2022*.

· MunchFit has served over 200,000 protein smoothies across our 3 Equinox cafés and they are now available in Virgin Active.

· Their nationwide meal plan service has signed up over 2,100 customers and sold more than 3,000 plans since launching the direct to consumer offering in 2020.

· We achieved a record quarter in Q1 2022 with £520k in revenue up over 50% from £335k Q1 2021.

· We achieved our highest year's revenue in 2021 of £1.61M.

Monetisation strategy

As MunchFit continues to grow, there will be a razor-sharp focus on 6 areas:

· Affiliate marketing - With access to over 80 gyms, focus is on driving the affiliate programme via PT's & fitness Instructors and direct marketing to members.

· Automated subscription - New flexible auto-renewal subscription model and launching add-on products, including new drinks range, to drive revenue and target profitability.

· Expanding reach to attract more customers - Investing in proven channels, high quality content and marketing automation to grow customer attention and retention. Achievements to date include:

· Retail partners - Ocado, Amazon Fresh and Planet Organic stock a range of MunchFit meals.

· Direct to consumers - Meal plan subscription service is available nationwide.

· Fitness cafes - 3 in Equinox's gyms and 2 new cafes in Virgin Active, selling a wide range of meals, protein shakes, snacks and drinks.

Use of proceeds

Minimum investment requirement of £700,000 will be spent according to the following splits:

· Marketing Growth Activities: £250,000

· Technology Enhancements: £100,000

· Working Capital: £350,000

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.

Key Information

Debt

The company has the following outstanding loans:

1. £50,000 Covid Bounceback loan at an interest rate of 2.5% per annum. The loan is to be repaid monthly with a final repayment date of 6 Nov 2030.

2. £29,116.67 from two overdrafts of £14,133.28 and £29,116.67. The overdrafts are repaid monthly at £441.67 and £483.33 respectively.

3. £271,737.58 PAYE arrears plan for Munch Fit Ltd. The plan is to be repaid in monthly instalments of £10,000 with a final repayment date of 21 Aug 2024.

4. £42,113.68 PAYE arrears plan for Feast Fit - a wholly owned subsidiary of Munch Fit Ltd. The plan is to be repaid in monthly instalments of £1,914 with a final repayment date of 22 March 2024.

5. £27,655.34 Floating Charge in the form of a Sales Finance Agreement with Barclays. The agreement has a Minimum Service Charge of £6,880 per annum and carries no interest. The Floating Charge is also secured over the assets of the business.

6. £83,338.19 in financial equipment leases across Munch Fit Ltd and Feast Fit Ltd.
- The equipment leases for Feast Fit total £6,651, repaid monthly with a final repayment date of Nov 2025.
- The equipment leases for Munch Fit total £76,687.14, repaid monthly with a final repayment date of Sept 2025.

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

Shares Classes

Share classes and Founder incentive
The company has 2 classes of shares, ordinary shares and Z shares.

The Z shares are incentive shares held by the founder in addition to the founder’s ordinary shares.

If the company exits at a valuation equal to or below £7.5m, all proceeds will be distributed to ordinary shareholders pro rata and the founder will only receive proceeds in respect of his ordinary shares.

If the company exits at a valuation of above £7.5m, the proceeds will be distributed as follows:
Proceeds up to £6m will be distributed pro rata among all ordinary shareholders.
Proceeds over £6m but less than or equal to £10m will be distributed 92.5% to ordinary shareholders pro rata and 7.5% to the Z shareholder.
Proceeds over £10m but less than or equal to £15m will be distributed 87.5% to ordinary shareholders pro rata and 12.5% to the Z shareholder.
Proceeds in excess of £15m will be distributed 85% to ordinary shareholders pro rata and 15% to the Z shareholder.

Pre-emption Rights for Existing Investors

The company has agreed with 3 of its existing investors that in the event the company issues any shares (a “Fundraising”), these investors will first be given the right to subscribe for up to £1.2m worth of shares at a 20% discount to the proposed Fundraising share price.

The total amount the investors can invest under this right to subscribe at a discount is capped at £1.2m.

The company has agreed with the investors to waive this right in respect of this fundraising right, and its existing investors will be participating at the full price of this round.

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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 webpage has been approved as a financial promotion by Seedrs Limited (trading as Republic Europe) ("Republic Europe"), which is authorised and regulated by the Financial Conduct Authority with firm reference number 550317. It is not intended to be a promotion of any individual investment opportunity and is not an offer to the public. The summary information provided about investment opportunities on this webpage is intended solely to demonstrate the types of investments available on the Republic Europe platform, and any investment decision should be made on the basis of the full campaign. Full campaigns are available to investors who have become authorised to invest on the Republic Europe platform. All investment activities take place within the United Kingdom, and any person resident outside the United Kingdom should ensure that they are not subject to any local regulations before investing.

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 £6,179,585

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

Investing in a regular equity campaign is the simplest and most common way to invest in a startup. You decide which business you want to invest in, and if the campaign hits its funding target then you will become one of their shareholders. As the company becomes more valuable, so do your shares; allowing you the opportunity to share in the future success of the business.

Learn more about pitch type on Seedrs

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).

Learn more about investing and pre-emption rights.

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.

Learn more about Custodian here

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.

Learn more here

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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