The first independent UK franchisee of coffee giant Starbuck, 23.5 Degrees, has been invested in by Connection Capital in it’s second backing. This investment of £3.6m follows the growth capital investment of £5.6m in 2015.
This follow-on capital, along with new bank finance, is ear-marked to fund expansions plan for 23.5 Degrees. The growth plans span over the next four years and include 150 new Starbucks stores in the UK, with immediate action taking place as two new stores are expected to open before the end of August.
Over the next 12 months there are 23 more openings scheduled to take place, with high street, travel routes, retail areas and industrial estates, all marked as potential locations. These stores will accompany drive-through locations, which is a segment of the market yet to be grown to that of the size of US refreshment outlets.
According to consultants and industry experts, the coffee shop market is expected to grow rapidly over the coming years with significant expansion by 2022. Co-founded by Managing Director, Mark Hepburn, with 20 employees in 2013, the coffee franchisee has grown to employ 70 members of staff and has served 5.6 million customers.
Speaking about the investment, Connection Capital’s Managing Partner, Claire Madden said “23.5 Degrees has grown rapidly in just a few years, creating hundreds of jobs and investing millions of pounds into the UK economy along the way….With this new funding, Mark and his team will have the next piece of the jigsaw to build on their success and deliver their expansion plans.”