Exclusive – Imbiba invests in Pizza Pilgrims: Hospitality investor Imbiba has invested £3.5m into Pizza Pilgrims, the London-based pizzeria concept founded by Thom and James Elliot, to aid its future expansion plans, Propel has learned. Imbiba, which backs the likes of Vagabond, Farmer J and Darwin & Wallace has taken a stake in the 14-strong business, with brothers Thom and James Elliot continuing as majority owners. The investment from Imbiba will further support Pizza Pilgrims’ expansion plans, with four new sites confirmed for the current year in Lower Marsh, Waterloo; Queensway, Bayswater; Old Quebec Street, Marble Arch; and Seven Sisters Road, Finsbury Park. The first three of these sites will open under the company’s eponymous brand, while the latter will open under its fledgling New York City-influenced Slice by Pizza Pilgrims concept on the former Quality Fish Bar site. The company, which operates one regional site in the Oxford Westgate scheme, launched the first Slice site in December as a 12-month pop-up on the former YO! site at Festival Riverside, Royal Festival Hall. During the course of the covid-19 crisis, the brand has evolved from pizzeria sites, moving into e-commerce with the launch of Pizza in the Post and debuting the new Slice concept. Imbiba’s investment will look to propel growth across all three areas of the business. James Elliot said: “It’s been a mad journey from a Soho market stall to 14 pizzerias across London and we are very excited for the next chapter of our pilgrimage. The team at Imbiba are a perfect fit for us and have a genuine passion for food and restaurants. We feel very confident they are going to help us grow, but in the right way. The most important thing is that we keep the pizza and the company culture we’ve developed over the past ten years at the front of everything we do.” Darrel Connell, partner at Imbiba, who has joined the Pizza Pilgrims board, said: “It’s so exciting to be working with such a creative and personal business, led by Thom, James and their amazing management team. Their passion for what they do is so clear and it shows in everything they do.”

Comment by Propel insights editor Mark Wingett: I wonder how many great ideas for businesses have fallen through the cracks over the course of the pandemic as pubs have been left sadly empty and idle because, as we all know, all of life’s great ideas start over a drink or two, and Pizza Pilgrims is no different. It helped that founders Thom and James Elliot grew up in a pub, but it took a chat over four or five pints before both felt they had an idea that would see the former leave a job in advertising and the latter step away from working in TV. And so, began a journey, which started with a pilgrimage to Naples, took in street food markets and festivals, a book deal, a TV show, a restaurant business, and has landed Pizza Pilgrims at the vanguard of the next generation of pizza concepts coming through the sector. It has also been a journey underpinned by fun. You can’t spend time with both brothers without coming away feeling better for the experience. That they have managed to embed that feeling into their business goes some way to explaining why Pizza Pilgrims is a brand that consumers feel emotionally connected to – having a good, accessible offer has also helped.

But even at the start, some more experienced sector operators needed convincing. Friend of the family and Geronimo Inns founder Rupert Clevely was asked for advice early doors about the concept making the move from street food favourite to bricks and mortar, and questioned whether their take was differentiated enough in what has always been a crowded market. Six months later, armed with impressive sales figures, the aforementioned book deal and TV show being broadcast about their trip to Italy, the brothers returned to get Clevely’s opinion and this time he agreed the move into a permanent site was the right one. Clevely brought credibility, especially when it came to securing early investment. Early investors in the business, included sector investor Ian Edward, ex-La Tasca and Harry Ramsden head John Barnes, PwC head of M&A Sean Williams and Warren Johnson, who founded W Communications. Not only had the brothers gained a set of investors, 15 in total, but they had secured a high-quality sounding board they could call upon when needed.

The brothers opened their first restaurant in Soho’s Dean Street in 2013, and both have admitted that their naivety during this time was both a help and a hindrance. They made some mistakes, but they brought a fresh approach to how they wanted their businesses to be run and how their staff would be treated – they are given a lot of autonomy. A cult following started to grow. The determination to not follow the cookie-cutter roll-out approach means every site is different. Taking inspiration from their site in Swingers in the City, their West India Quay was launched as a “pizza playground”, the group’s largest site came complete with bocce ball, Mario Kart and pinball on offer. This creative streak will continue in the upcoming openings – the site at Queensway will feature a 24-seat cinema, while the opening at Waterloo is made up of three retail units that will each take a colour from the Italian flag – inside and out, and feature Piaggio ape vans with the roofs cut off, to be used as tables of four. Although it looks like an openings splurge, a number of these sites, such as Queensway were secured last summer, the business is not in a rush for space.

Unsurprisingly, private equity has sniffed around the business for a number of years, I understand sales in a good week across the group’s total estate were circa £300,000 net pre-covid, but taking on investment hadn’t been on the company’s radar pre-pandemic. What the crisis did do was highlight the group’s ability to pivot and rise to the challenge the lockdowns have provided. Developed before the pandemic, the group’s Pizza in the Post idea has taken on a life of its own. Allowing the brand to reach a new audience, James’ films around the concept and of consumers trying it have seen the company’s Instagram account take off, it has also put the business in front of new customers outside its London base. Currently, the company is doing between 800 to 1,200 kits a day. As James told me: “It’s been an absolute godsend if I’m honest. It’s been great to have something so positive to direct our energies. Financially, it has been a good crutch and we’ve been able to keep approximately 40 of our team off furlough, which has been amazing. From a brand perspective, it’s helped us double our social following in the past 12 months and has introduced Pizza Pilgrims to a completely new audience.”

On top of the four sites already secured, the business is beginning to “build a great pipeline” and feels there is still plenty of opportunity for growth in London. It’s launch in Oxford, albeit only an hour away, has provided the business the opportunity to gain experience and confidence in operating in a different city, however, it is thought further steps outside the capital will now wait until next year. Alongside growing its London estate, James told me the rest of the company’s energy will be focused towards relaunching its Pizza Academy in Camden, which it had to close after a day of school in March last year, developing its e-commerce platform with Pizza in the Post and opening that second Slice site. It is very early days for Slice, and James said that, at present, “we are not 100% sure” what the future looks like for the concept. He said: “We spent a lot of time in New York while writing the book and fell in love with the pizza scene there. We feel Neapolitan pizza has become hugely popular in the UK in the past ten years but NYC slice pizza is still quite rare here. We want slice to be a fun, relaxed experience. Somewhere between a slice shop, restaurant and New York dive bar. We will see how it develops but we believe that a semi-QSR pizza joint with a strong delivery offer has great room for growth into the London villages.” A subscription service is also in the works, as James said: “A different pizza kit every month that lets you take your own pizza pilgrimage.”

Speaking to Propel last June, Imbiba’s Connell said the company was seeing the investment world in “three buckets” – distressed, good businesses that went into lockdown with slightly stretched balance sheets and those that want to capitalise on opportunities. Pizza Pilgrims firmly falls into the latter category. It didn’t need the investment but given the once-in-a-generation opportunities currently available, it has decided to accelerate the company’s growth plans. Of course, there is plenty of competition out there in the pizza category – aside from national groups such as PizzaExpress and Franco Manca, there are those concepts coming up behind Pizza Pilgrims – Yard Sale Pizza, Homeslice, Santa Maria and Pizza Union to name a few. But, for Imbiba, it was only interested in the “category leader”. Connell said: “At Imbiba, our investment strategy is simple. We only invest in what we deem as category leaders within respective sub-sectors. Within wine bars, it’s Vagabond, healthy grab-and-go equals Farmer J, boutique hotels equals House of Gods, etc. There’s a lot of competition in pizza and we’ve met with many brands over the years but Pizza Pilgrims is, in our humble opinion, absolutely the category leader in pizza. If we were unable to invest in Pizza Pilgrims, we wouldn’t have invested in the pizza category. Covid has been a real leveller for all hospitality and leisure businesses with everyone in the same boat. How the guys responded in launching both Pizza in the Post and a new restaurant concept, Slice, during the pandemic was unreal. This once again highlighted how the product, the brand and the team were absolutely category leading.”

While many, quite rightly, have been concentrating on securing survival capital, others are now seeking development capital to create a gap between themselves and the rest as the world turns again. Connell said: “We’re seeing lots of opportunities where brands want to come roaring out of the pandemic and expand. We’ve made four new investments during the pandemic and have another three that should complete in the next month so we’re very much ‘open for business’. As we know, hospitality entrepreneurs hate standing still and it’s super exciting and invigorating for us to meet entrepreneurs from across our great sector that have their tails up and want to expand following such a tough year.” The crisis has highlighted, if it needed to, food brands now need to be multi-channel – bricks and mortar, e-commerce, delivery, click and collect etc. Connell continued: “What the pandemic has shown, from an investment perspective, is that it has a multi-channel strategy and a product that lends itself to multi-channel (as pizza does) provides a real hedge when disaster strikes. While no multi-site restaurant brand, with the heavy burden of fixed costs that goes with sites, will be getting rich while their restaurants are closed, having a multi-channel offering allows companies to continue to trade, to keep the lights on and, crucially, keep the team remunerated and the brand alive.”

When you look at a deal, the good ones are those that work best for all involved. This investment by Imbiba into Pizza Pilgrims certainly feels like it falls into that category. It will allow the pizza brand’s founders and management team to focus on growth for the next two years, before even bigger investment predators come calling, and reinforces Imbiba’s position as one of the most proactive investors in the sector, with an increasingly diverse portfolio. Crucially, it allows Thom and James to keep having “fun” with the business they founded nearly ten years ago and, at the moment, we would all like a slice of that.

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