Scottish brewer BrewDog has taken its Equity for Punks crowdfunding concept to the US, as the company prepares to expand into the world’s largest beer market with the opening of a 100,000 square foot brewery and a roster of new beers.
Equity for Punks USA is the fifth fundraising venture by the brewery, but its first in the US. It previously used the equity crowdfunding platform to raise over £26 million across four rounds of funding for its Aberdeenshire business.
The business has now announced a $50 million round of crowdfunding that will last for six months – the first time that it has crowdsourced funding from the American public. The capital will be used to “turbo-charge” its American expansion and “marks and unprecedented move by any small business, with BrewDog set to further pioneer its audacious new approach to community-fuelled business in the US”.
Investors, which BrewDog calls punks, will be able to pledge $47.50 per share with a minimum investment of two shares. As well as a stake in the company, investors will receive lifetime discounts in BrewDog bars and free brewery tours.
BrewDog co-founder James Watt said: “Equity for Punks is a completely new business model in the States – it’s a revolution in small business finance. It’s an opportunity to enlist the people of the nation who changed the beer landscape forever, and invite them to join our existing 46,000-strong global investor community. We’re asking beer fans to help us change the face of small business finance in the US and spread our passion for great craft beer. Few companies have been so bold as to turn their backs on traditional financial institutions in favour of a brave new world of community-driven business. We’ve pioneered the Equity Punk model in the UK, and now we’re bringing our unconventional approach to alternative business stateside.”
BrewDog’s earlier Equity for Punks investment from more than 46,000 individuals across the world has enabled the brewery to expand rapidly and keep pace with increasing demand for its beers across Europe, the UK and abroad. After closing its most ambitious round of funding in April, where BrewDog sought £25 million’s worth of investment but fell short of that target by £6 million, the business has seen UK sales increase by 93% for the first six months of 2016.
BrewDog’s flagship beer, Punk IPA, is holding its position as the number one craft beer in UK supermarkets while growing at over 150% in the UK off-trade.
Work to increase capacity at its brewery in Aberdeenshire has recently been completed, bolstering the total brewing capacity to 1 million hectolitres.
The Scottish company has described its latest offer as “a small price to pay to own a craft brewery”, but has previously come in for criticism of the amount of equity offered to Equity for Punks investors. The £25 million funding round opened last April offered fans the chance to buy at least two shares in its UK business beginning at £47.50 each, but the 8.83% stake offered amounted to a valuation of around £283 million – or more than 70 times the £3.9 million operating profit it made during the year.
BrewDog’s American expansion provides the business with ample opportunity to tap into an “explosive” craft beer market, which is forecast to be worth 20% of the overall American beer market by 2020. It is currently constructing a 100,000 square foot brewery in Columbus, Ohio, scheduled to open towards the end of the year, while the first BrewDog releases in the US are scheduled for November.
Watt continued: “Equity for Punks is about community. It is about connecting us with the people who love our beer. It is about building a new type of business. It is about taking beer lovers on this amazing journey with us. It is about working together to build something we can all be proud of. In 2010, we tore up convention, turned the traditional business model on its head and launched Equity for Punks, giving thousands of people a front row seat to the craft beer revolution in Europe. Now, we are coming to America. We are combining Europe’s leading brewer with the world’s biggest craft beer market – expect fireworks.”
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