Winemaker Chapel Down crowdfunds for up to £7m to scale up

English company wants to expand North Downs vineyard and ramp up exports

Last modified on Fri 4 Jun 2021 07.51 EDT

The English winemaker Chapel Down is asking the public to take part in a fresh funding round worth up to £7m that will help the business expand its vineyard in the North Downs and ramp up exports.

It is the Kent company’s latest attempt to tap into investor enthusiasm for homegrown tipples as the democratisation of shareholding grows.

Chapel Down plans to use the money to scale up its wineries and finish planting grapevines on the North Downs, where its vineyards are expected to produce an extra 500,000 bottles of English sparkling wine a year. Some of the cash will also help develop its online sales portal and export business.

Chapel Down’s crowdfunding campaign, launched with the online equity crowdfunding service Seedrs, will allow the public to collectively buy up to 11.5m shares at 59.5p each, raking in as much as £6.9m. It will add to the £1.4m worth of shares to be bought up by the winemaker’s directors and backers, including the former Conservative party treasurer Michael Spencer.

The chief executive, Frazer Thompson, said: “Our broad congregation of investors is a crucial part of our success, however large or small.”

It comes amid a recent surge in smaller investors buying stocks, which are usually bought up by wealthy individuals and institutional shareholders such as pension funds, asset managers or hedge funds.

Companies such as Deliveroo have opened their initial public offerings to customers while small investors collaborating via Twitter and Reddit have fuelled the rise of meme stocks, often with an aim to burn short sellers.

Chapel Down has run a number of crowdfunding campaigns, including in 2014 when it broke records for raising £2.9m in 10 days in a funding round that eventually raised £4m.

It also raised money to build a brewery for its Curious Drinks beer and cider business in 2016.

However, the Curious Drinks business suffered because of the closure of its bar and restaurant during the coronavirus pandemic. It was bought out of administration by Luke Johnson – the entrepreneur and investor in companies including Patisserie Valerie and Gail’s – through a £5m deal in April.

On Friday, Chapel Down reported a 3% drop in sales for the year to December, while its pre-tax loss grew to £7.9m from a loss of £4.3m a year earlier. That is despite a 38% jump in wine sales and a 467% rise in direct-to-consumer sales in 2020, with customers buying directly from producers during lockdown.

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