Online single-price retailer Poundshop.com has secured a £2m investment to accelerate growth with backing from venture capital firm Foresight.
Launched by Poundland co-founder Steve Smith in 2014, the business plans to use the growth capital - £1.7m from Foresight and £300k from an unnamed backer - to upgrade IT, expand warehousing capacity and market the site to consumers in the UK and overseas.
“When I founded Poundland 26 years ago, everyone said it will never work, but belief and determination created the multibillion-pound retail industry we know today,” said Poundshop chairman Steve Smith. “In this relatively short space of time, retail has changed enormously with the introduction of e-commerce. My enthusiasm for shopper value has not changed and working in partnership with Foresight, I am looking forward to taking single price shopping to the next level.”
Poundshop chairman Smith, who sold his Poundland stake for £50m in 2002, has ambitions to grow Poundshop to a £100m-turnover business in five years.
A crowdfunding campaign on Crowdcube in 2015 for £175k revealed Poundshop achieved £320k in sales in its first full financial year, with forecasts to grow to £9.2m by the end of 2017/18. The business cancelled the crowdfunding pitch before hitting its target, taking no funds from potential investors. Questions were raised on the platform’s forum at the time about the £2m-plus valuation.
Foresight investment manager John Cordrey said: “We are delighted to have completed this growth capital investment into Poundshop.com, which is already showing strong revenue growth from an expanding community of loyal customers.”
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