Camden Town Brewery hits £1.5m crowdfunding target: Camden Town Brewery has today hit its target in a crowdfunding campaign on Crowdcube less than a month after launching, raising more £1.5m in return for 2% of its equity. So far, 1408 investors have pledged £1,520,860 confirming a valuation of £75m for the business. The company wants to fund a new brewery. Sales have grown from £90,000 per annum to £9m in three years. Launching the campaign on 9 February, owner Jasper Cuppaidge, who began brewing in the basement of his Horseshoe pub in Hampstead in 2006 because of a lack of quality in the lager market, said: “We’ve been growing at a crazy pace down here at Camden Town Brewery over the last few years. A new brewery has been our dream for a while now and will make sure we’re able to keep up with demand and our ambitions. We hope Londoners will get on board with what we’re calling the ‘Hells Raiser’ crowdfunding campaign and help us reach our target and make this dream a reality. We want people to join the journey with us – and we’re certainly going to have some fun along the way.” The pitch states: “We think we’ve only just scratched the surface of what we can achieve at Camden Town Brewery. Were committed to delivering great beer as far and wide as we can and everyone at Camden believes passionately in our long-term vision. We hope that our shareholders choose to stay with us on that journey. Our goal right now is to reinforce our vision up to 2020 ensuring we keep creating great quality beer and pushing strong financial growth. Beyond that, we see a huge number of potential options for the company. You only need to look at the US craft beer market to see exit multiples of 13x Ebitda. Some craft brewers like the Appalachian Mountain Brewery have already gone public and we think there’s a real appetite for a company that can grow while staying true to its roots.” Asked to justify the £75m valuation, Camden Brewery’s finance director, Patrick Franzen, who was an original investor in the business and also co-founded Barworks, said: “Camden Town Brewery has grown more than ten times in the last three years, which is a pretty fantastic rate of growth. We took the decision to value the business on the basis of where we see ourselves at the end of the investment plan, while considering the Ebitda forecast for 2015 as the anchor. We are trying to avoid talking in multiples at this early stage for reasons of high growth rate. Having said that, we are expecting Ebitda for 2015 to be around £1.45m. Current sales support this as we are above the curve for sales so far this year. This number includes the volume of beer that we are having to contract-brew because of our limited capacity at our current brewery. This volume, unfortunately, earns us a much lower gross profit than we see on ‘in-house’ produced beer. When we add back this volume and add the costs that we would incur if we had produced it ‘in house’, we end up with an Ebitda closer to £3m for 2015. We feel very strongly that any valuation today needs to factor this in. We took the decision to do that. Additionally, we have decided to add in the value of the perceived brand strength and the fact that we are going after the much bigger lager market as opposed to the relatively smaller ale market, which is the norm for smaller craft breweries due to the costs around lager production. We feel that craft lager has a fantastic growth opportunity globally. We are looking to produce a return for our investors by building the brand aggressively over the next five years. We are expecting that we will achieve an annual growth rate of just under 40%. This compares to an annual growth rate of around 110% to date, and so should be achievable over the investment period. Capital investment during this time will increase our beer production to 250,000 HL by 2020. This will drive an Ebitda of just under £13m and an equity value of around £151m using a very conservative industry multiplier of 11. This will give a compounded annual return of around 12.4% at exit at the current valuation.”