Crowdcube – the original equity crowdfunding platform – is branching out into the world of debt.
Fast growing Mexican restaurant chain Chilango has made history on the platform today with the launch of its “Burrito Bond”. The campaign is targeting a fundraise of £1 million to fund further expansion of the business. Investors in the mini-bond will receive returns of 8% per annum over a four-year term. Minimum investment stands at £500. The bonds operate a bullet repayment scheme and are non-transferrable. Chilango has also spiced up the deal for bondholders in rewards crowdfunding-like fashion – offering burrito vouchers, VIP party tickets and even free food for those investing £10,000 or more.
“Just as we revolutionised equity investment, we are now turning the mini-bond market on its head by taking away the complexity and costs for businesses who want to raise growth capital and cut out the banks, at the same time as presenting a unique way to engage with their customers, encouraging loyalty from existing customers and attracting new people to their brand. For customers and investors, the opportunity to invest in companies they already know, and want to support, as well as receive a regular financial return on their investment is appealing.”
Eric Partaker, Co-Founder of Chilango, offered his thoughts on the offer:
“Our Burrito Bond is the perfect way for us to engage with our loyal following as well as Crowdcube’s investor base and accelerate our expansion plans with additional growth capital. As big fans of Mexican food we love everything that is vibrant, fresh and fun and Crowdcube is all of these. Its mini-bond platform is a breath of fresh air amongst the complexity and expense of existing solutions.”
This move by Crowdcube is in keeping with the drive for a holistic approach that many of the platforms seem to be adopting of late. It’s the largest platforms (think Zopa moving into business loans, Funding Circle into property, etc.) that can most smoothly make additions to their services – leveraging an already solid reputation and trusting investor base. We’ll track with interest the appetite for the first Crowdcube mini-bond – which is already 6% funded.