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A chilled chai drink manufacturer that secured a £100k investment on Dragons’ Den, ditched the funding in favour of a crowdfunded cash injection.
Tuk Tuk Chai scored the investment from dragon Peter Jones on Sunday 12 August episodes of the entrepreneurial show.
However, the drink startup’s founders confirmed that after filming ended, the potential partners mutually decided to walk away from the deal.
Tuk Tuk instead turned to the crowd to raise £150k in order to upscale in production and invest in marketing.
In a crowdfunding campaign on Crowdcube launched the day after the Dragons’ Den episode was shown, Tuk Tuk completed the fundraise in 24 hours, for 8.5% of its equity on a valuation of £1.85m.
The funding campaign has now secured almost £190k, securing 126% of the company’s initial funding target.
On the show, the startup had initially sought £100k for 5% equity, but agreed an offer from Jones, who has previously invested in fmcg brands including Reggae Reggae Sauce and Bare Naked Foods, for a 33% stake.
Rupesh Thomas, co-founder of the business with his wife Alexandra, said they discussed the need to inject more funds into Tuk Tuk with Jones, and decided a separate crowdfund would be the best model to do so.
Elsewhere in crowdfunding, alcoholic tea brand Noveltea has almost doubled its initial funding target of £120k after raising £218k on Crowdcube to grow UK listings and exports.
The premium brand overfunded its campaign to sell 20.6% of equity at a valuation of £840k.
Read the full story and other finance articles from this week’s issue of The Grocer and on thegrocer.co.uk/finance later today.
Morning update
Vaping should be promoted as a less harmful alternative to smoking by the government, a committee of MPs has said today.
MPs on the Commons Science and Technology Committee called on the government to promote e-cigarettes to reduce the death and disease caused by tobacco, despite divided opinions in public health on vaping.
In a report published today, it said the government is missing an opportunity to “tackle a major cause of death in the UK” by promoting tobacco alternatives.
E-cigarettes are 95% less harmful than conventional cigarettes and should not be regulated in the same way, the report claims.
Around 2.9m people use e-cigarettes in the UK, 470,000 of which say they are using vaping as a method of stopping smoking.
“Concerns that ecigarettes could be a gateway to conventional smoking, including for young non-smokers, have not materialised,” said Norman Lamb, who chairs the committee. He added, “ecigarettes could be a key weapon in the NHS’s stop-smoking arsenal”.
The FTSE 100 has opened flat this morning, as have most of the European indexes despite fears over US trade sanctions.
Early risers this morning include, Glanbia (GLB), up 1.4% to 14.8p, Majestic Wine (WINE), up 1.2% to 414p, and ABF (ABF), up 1.2% to 2,334p.
Early fallers this morning include Crawshaw Group (CRAW), down 4.1% to 6.8p, McBride (MCB), down 1.7% to 130.9p, and Domino’s Pizza Group (DOM), down 1.2% to 286.4p.
Yesterday in the city
The FTSE 100 kicked on yesterday, jumping 0.8% to 7,556pts as trade fears over US and Chinese relations appeared to ease.
Yesterday, Walmart (WMT) announced its second quarter results, which showed that Asda’s sales grew 0.4% for the period.
Asda CEO Roger Burnley claimed the figure, covering the period 1 April to 30 June, showed there was “continued momentum” in Asda’s recovery, with the results the fifth consecutive period of positive growth.
However, the performance is a slowdown on the 3.4% like-for-like sales increase reported in the first quarter of the year as the earlier Easter period boosted the first quarter at the expense of second quarter sales.
Walmart’s shares jumped 9.3% to $98.6 after its results highlighted a 40% rise in online sales, bringing overall sales to $128bn.
Yesterday’s risers included Greencore (GNC), up 4.1% to 173.7p, Distil (DIS), up 4.1% to 2.55p, Ocado Group (OCDO), up 3.9% to 1,056.5p, and Sainsburys (SBRY), up 2.6% to 338.2p.
Fallers following the day’s trading, included Wincanton (WIN), down 5.2% to 250p, Hilton Food Group (HFG), down 3.3% to 922p and Treatt (TET), down 2.9% to 465p.
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