“For something to truly succeed, it must have a little poetry at the heart of it.” When looking back at 2024 in December, Shamil Thakrar, co-founder of the award-winning Indian restaurant group Dishoom, thought back to a saying of his father, Rashmi, that had stayed with him. He said: “Over time, I think I’ve come to understand this better. I believe this idea guides us to start with the beauty in something, the emotion it evokes, whether some sort of joy, or even sadness or pain, perhaps a strong pang of nostalgia, something that moves you. Then, to find a way to channel this mood, to create something from it and to communicate it. In the end, and without denying the importance of reason, it is without doubt emotions that move us to do anything.”

Anyone who has watched the most recent series of Propel podcasts will know the emotions that Dishoom stirs amongst its peers. When asked which brand they admire the most both in and outside the sector, Dishoom has been front of mind, so much so that I have now started anticipating the answer by saying “apart from Dishoom”. There is, of course, plenty to admire, even love, about Dishoom. It is one of the best, if not the best, business in the UK’s restaurant sector – it sets standards others try to follow. But now, on the verge of a multi-million-pound investment deal with a global investment firm, its ability to spread that “little poetry” into new countries will face its biggest test.

Propel revealed last week, L Catterton, the global investment firm which is 40% owned by LVMH, the French multinational holding company and conglomerate that specialises in luxury goods, was in advanced talks to invest in Dishoom – which Thakrar co-founded with his cousin, Kavi in 2010 – in a deal that could value the business at in excess of £300m. Second round bids were understood to have been submitted last month, with L Catterton understood to have moved ahead of a number of investment firms, including New York-based venture capital fund Imaginary Ventures, to back the 14-strong business. In July, Propel revealed that transatlantic investment funds and high net worth individuals were believed to be among the parties that had submitted first round bids to Dishoom.

Last November, Dishoom revealed it had appointed advisors to help it secure new investment to aid a launch in the US, which could happen as early as this year. The co-founders said the process could see the business bring in an investor or partner to fund the move, and to also provide expertise and strategic counsel as it looks to enter the US market and continue its growth in the UK. The business currently operates ten sites under its eponymous concept and four under its newer Permit Room format.

Dishoom, which opened its first restaurant in London’s Covent Garden, is a business built on putting culture and authenticity centre-stage, and has also played a major part in redefining how people think about and experience Indian food in the UK. Anyone who has been in a Dishoom finds a space that has been crafted with love, care and authenticity. The challenge for the Thakrars, ably assisted by chief executive Brian Trollip, and one they have so far risen to, is to make sure each new opening carries on that path. Shamil Thakrar told Propel earlier this year that he sees hospitality and growth as natural enemies, and that “our job as operators is to reconcile them, and to always keep hospitality as the dominant partner”. Thakrar said he and his team decided early on that the business was not to grow at a rate “faster than the rate at which we can increase the quality of what we do”.

He said: “Hence the phrase deepen, don’t dilute. So, never dilute what you do. I’d like to think that a meal in Dishoom today is better than the one last week, than one last year, than ten years ago. The job really is to keep deepening hospitality and then decide what the growth rate is for that. And I’m going to say something controversial, because we probably will talk about growth. I think hospitality and growth are enemies. Because if you’ve got one restaurant, you can do hospitality right – you can know everyone. Two restaurants, I can still do it, but it’s a bit harder. Five restaurants, it is harder still. So, I think of hospitality and growth being natural enemies. I’m not saying you shouldn't grow, but I think our job as operators is to reconcile them and to always keep hospitality as the dominant partner. Our jobs are not about growth, they are about hospitality – always focused on making sure the customer is having a fantastic time, that the food is better and that the team member is happier. My biggest fear is that we lose track of that focus on making it awesome every time.”

Thakrar said he believes the company can open two or three sites a year, “while still maintaining the integrity and the beauty of what we do”. He said: “With Dishoom, we’ve opened about one a year, but now we can do more, and I think we can do two or three a year. I don’t want to do more than that. Consistent with our philosophy of ‘deepen and not dilute’, the bottleneck for growth is not opportunity or funding. It’s how can we open better restaurants every year? And that’s been our growth philosophy. We also write a story for every restaurant, and that’s also held us back in terms of growth, and yet we’ve grown at a really decent clip, if you look at the numbers. So, we will keep opening Dishooms, but I don’t want to open lots of them.”

That last line must have made for an interesting conversation for would-be suitors, but there has been a subtle uptick in the company’s growth strategy over the past few years. Its second eponymous site will open in Glasgow near the end of this month, while a site in Leeds is lined up for an opening next year. There is also speculation of a further Dishoom in London, at The Hop Exchange in Southwark. Then there is Permit Room – the company’s fledgling all-day bar-café concept – which was launched in Brighton in November 2023 and has grown to sites in Cambridge, Oxford and Notting Hill, with a fifth earmarked for Liverpool. While you could imagine Dishoom opening up to no more than ten more sites under its eponymous brand in the UK, the success of Permit Room opens up at least 15-20 further locations here.

Of course, the main part of the next stage of the Dishoom story will be focused overseas, and especially in the US, with the business hopefully opening a debut site there, in New York, in the next 12 months. Dishoom has visited New York before, setting up a temporary residency last August, when the business operated a breakfast pop-up in collaboration with New York French brasserie Pastis – selling out 6,000 reservation slots in four and a half minutes, with a further waiting list of 20,000. Thakrar said: “I’ve got two deep feelings about the US. One is that I’m deeply confident we’ll make it work, and it will be brilliant. The second is that it’s going to be really flipping hard, and I’m also deeply confident that we’re going to, at times, get unstuck.

“There are a whole lot of things we just assume are similar, maybe culturally, and they’re possibly not. We’ll open one, which is hard enough – set it up and get the operation right. The menu won’t be right, the concept won’t be quite right and will almost certainly require some local tailoring. In the UK, it took us a couple of years to open our second site, and I think the second site was where we really made it a Dishoom. The first site wasn’t quite right then, so I want to take that time and do it right. We are looking for somebody who can help us with that journey of growth, particularly in the US, and also who’s going to help us really deepen what we do.”

That somebody is set to be L Catterton, an investment firm with significant experience building restaurant brands, with current and past investments in the space including Baja Fresh, Outback Steakhouse, PF Chang’s and Velvet Taco. In Europe, it has backed Goiko, one of the fastest growing casual dining restaurant concepts in Spain, since 2018. Just this week, the investment firm acquired Kisshokichi, the world’s largest Kobe beef restaurant chain, as part of its broader push into the global food and beverage sector. Founded in 2008, Kisshokichi operates about 50 restaurants across Japan and is the largest buyer of certified Kobe beef worldwide. The partnership aims to accelerate the chain’s growth and tap into rising international demand for premium Japanese cuisine. That last line, swap Indian in for Japanese, could equally apply to Dishoom.

According to a 2023 report by the National Restaurant Association, the number of Indian restaurants grew by 25% in the last five years in the US, outpacing the overall restaurant industry’s growth. This reflects the increasing demand for the unique and bold flavour that Indian cuisine brings to the table. Of course, it is a gamble, one that is currently based, in regards to future success in the US, on the success of a short-term pop-up. Will they find it easier to launch in a country where the Indian restaurant scene is still immature, against Hawksmoor going up against into a country steeped in the traditions of steakhouses?

Then there is the valuation. Latest accounts available for Dishoom show the company saw turnover increase 23% to £116.8m in the 12 months to 31 December 2023. The results – reflecting the first time the current 12-month period and prior comparable year were both unaffected directly by covid 19 – included significant growth in Ebitda, up 41.9% to £13.3m. Pre-tax profit increased to £7.4m from £4.8m. One of my favourite lines written about Dishoom was “at a glance, you might expect a solid valuation, maybe 10x Ebitda”, just because it has been so long since the UK restaurant sector has seen such a multiple! There is no read across here. Dishoom, as with many things it does, is a one-off – as will be the valuation. It is being viewed as a lifestyle brand, one with impact, a key attraction for L Catterton, which launched an Impact Fund Platform a few years ago, dedicated to growing the next generation of mission-driven consumer companies.

A 50-page design guide is produced to deliver on the individual stories for each site Dishoom opens. The forthcoming Glasgow restaurant will be centred on a spy from India, while the recently opened Permit Room in London’s Notting Hill is based around the story of an artist who drinks a lot. With new investment on board and a new country to captivate, Thakrar and his team will need to come up with more stories and at a greater pace, leaning ever more on what the business calls its “articles of faith”– ideas that are fundamental to the way “we try to run our business”.

He says: “One lesson we learned was that while we were clearly running a business, elevating profit to the key focus wasn’t serving us. Instead we formulated a principle: ‘obsess over awesome food and drink, awesome service and a happy team, and control the costs. Then, revenue and profit are the applause that follows.’ Written here, perhaps it is obvious, but for us, it was transformational and is now embedded in everything we do and every way we measure it. As we grew, we were fiercely determined not to let growth dilute the quality of our food, drink, service or the happiness of the team.” If Dishoom can continue to do just that, it could potentially be one of the best exports the UK hospitality sector has ever produced.

Wildwood operator raises £9.25m: Tasty, the listed operator of the Wildwood and Dim T brands, has raised £9.25m through a share placing. Tasty announced on Friday (1 August) its intention to raise the funds by way of an accelerated bookbuild that has been completed. The placing has resulted in 1,699,400,000 of new ordinary shares by way of the placing and 150,600,000 new ordinary shares by way of the subscription, each at the issue price of 0.5 pence per new ordinary share. David Page, the former chairman of Franco Manca-owner Fulham Shore and ex-chief executive of PizzaExpress, who has become chair of Tasty, has subscribed for 70,000,000 placing shares and his spouse, Andrea Pinnington, has subscribed for 45,000,000 subscription shares. Page will receive 8,425,321 consideration shares and Andrea Pinnington will receive 472,439 consideration shares pursuant to the terms of the share purchase agreement. Chief executive Jonny Plant has subscribed or 10,000,000 placing shares while new chief financial officer Nick Wong has subscribed for 110,000,000 placing shares. The company is also undertaking a retail offer that will close on Wednesday (6 August), at noon. Tasty announced Adam and Sam Kaye, and Amberstar (a company controlled by Phillip, Adam and Sam Kaye) are intending to participate for an aggregate amount of £500,000 through the retail offer. As part of the deal that sees Page join as chair, the company will be renamed Bow Street Group on the London Stock Exchange and sees Tasty acquire a cash shell owned by Page and associates as part of the deal. The business said it is undertaking the fundraising and the acquisition, which together with the proposed new board appointments, will see a revised growth strategy, which the “enlarged board believes will provide the group with opportunities to increase sales and increase shareholder value through both organic and inorganic growth opportunities”. The net proceeds of the fundraising are intended to be used by the company to invest in and improve the group’s existing restaurants; invest in the company’s technology and operations; acquisition of other restaurant brands; and provide working capital support to deliver the company's revised growth strategy. There will also be a full review of existing sites, including scope for seven full refurbishments (approximately £250,000 of capex per site with an approximate four-year payback); a review of the status of five existing short leases within the group’s estate; and the potential rebranding of existing group brands. The company said: “In addition, the enlarged board will seek to undertake four to six acquisitions over the first three years following admission, with an aim to grow the enlarged group’s brands to 50-plus sites.”