Beverage maker to raise Sh80.5m through crowdfunding

Alexandra Chappatte, founder Kenyan Originals, a craft beverages maker. [Wainaina Wambu, Standard] 

Craft beverages maker Kenyan Originals is looking to raise $700,000 (Sh80.5 million) through crowdfunding to boost expansion plans.

Founder Alexandra Chappatte said the move would enable employees and consumers to own shares, boost the growth of new spirits and expand capacity.

“We need to invest in the brand to get it to a higher level. We want to continue to invest in Capex (capital expenditure) to expand our capacity and create a world-class beverage production facility across alcohol and soft drinks,” she said.

The firm is valued at $10 million (Sh1.15 billion) and Ms Chappatte projected that investors would multiply their investments tenfold in two years.

It recently launched craft gin brands retailing at between Sh1,300 to Sh,2300 seeking to take a slice of the huge market dominated by EABL.

“The reason why it's a good time is we have a lot of interesting things, but we haven't yet really leveraged them. We are going to see the benefits of the spirits and other lines in the business coming over in the next two years,” she said.

The firm is willing to cede a ten per cent stake valued at $1 million.

The minimum ticket size is roughly Sh1,500 (£10) and the maximum £50,000 (Sh7.35 million). The crowdfunding will run for a month and went live yesterday on Crowdcube, a UK-based platform.

Investors are set to get dividends once it is profitable which is expected in a year. The firm, which averages growth of 40 per cent annually, has ambitions to hit an annual turnover of $25 million ($2.6 billion) in the next four years.

Crowdfunding is fairly new in the Kenyan market and Ms Chappatte said it does not tie them from exploring other avenues of funding in the future.

“This is not necessarily focused around huge amounts of raising money," she said.

"We’ve never used this platform. It’s not a desperate need for funding but we think it’s part of the ethos of who we are as a company, that we should have our audience as owners.”

Kenya has online fundraising platforms such as M-Changa and Pezesha which operate a debt-based crowdfunding platform with Kenya’s market only developing.

About £1 billion (Sh147 billion) has been invested in over 1,000 businesses that raised funds through Crowdcube, which has over 1.2 million members.

“We wanted to trial and test it in something that was set up and that people had confidence in. If we see it works we’d be open to doing it locally,” Ms Chappatte said.

Kenyan Originals, started in 2018 and whose products now retail in over 1,800 outlets countrywide, has raised money primarily from seed funding.

This includes an angel investor – Chandaria Capital founded by entrepreneur Darshan Chandaria - among other external investors.

Kenyan Originals has a beverage portfolio - alcoholic and non-alcoholic - of over 10 flavours including ciders, mixers and tonics and iced tea.

The firm's plant in Baba Dogo processes over three tonnes of fruit monthly with a production capacity of 2,000 bottles daily.

It has since expanded this capacity to include a new production line for spirits.