Member Article

Mexican fast food chain targets five-fold expansion with second investment round

London-based Mexican fast food chain, Chilango is today launching its second investment round on Crowdcube in the form of an equity crowdfund that aims to raise £1m from investors in return for a 3.26% stake in the business.

The funds raised will kickstart the next expansion phase that expects the company to see five-fold growth in the next five years.

This is different to Chilango’s “Burrito Bond” offer last summer, in which investors put in a minimum of £500 in return for an 8% p.a. interest payment over the four years of the bond. The round overfunded to secure a record-breaking £2.1m on the crowdfunding platform.

Eric Partaker, co-founder of Chilango explains why the company has opted for equity investment this time: “Our guests can’t get enough of our burritos and tacos and we love how equity crowdfunding means they can, literally, buy into a brand they love for as little as £10. Investors make fantastic brand evangelists so we want to have as many on board as possible.”

With the help of the new equity round, founders Eric Partaker and Dan Houghton are gearing up to reach over 50 locations over the next 5 years.

To support this five-fold increase, Chilango is looking at potential sites in over 20 cities throughout the country, as well as introducing international franchises, with an initial focus on Dubai in the Middle East. As a first step in this plan, the £1m will fund the launch of three UK restaurants.

Eric added: “With the bond the entry bar was £500 so it was accessible to fewer people, although we still attracted over 700 who are all very happy with the return on their investment following two dividends.”

Luke Lang of Crowdcube adds: “Chilango pioneered our bond proposition back in June last year and we’re delighted to welcome them back for an equity raise this time.”

The Burrito Bond has already paid out £130k to its investors in its first two interest payments.

The £2m capital raised has allowed Chilango to grow rapidly in 12 months, creating around 40 more jobs and financing three additional sites, with London Bridge and Camden High Street open, and Soho on the way, taking the group up to 10 restaurants.

This was posted in Bdaily's Members' News section by Ellen Forster .