Solo Coffee, a prominent supplier of cold-brew coffee in the UK, is on the verge of expanding its operations to the United States. To support its growth plans, the company is currently seeking further investment opportunities.
Currently, Solo Coffee operates primarily in London and distributes its products in the UK through various retailers, including Ocado. Additionally, the company has made significant inroads in the on-trade sector, with renowned chains such as All Bar One utilizing its products for popular cocktails like the espresso martini.
Solo Coffee plans to commence sales in the United States in the upcoming months, with aspirations of expanding its market presence to continental Europe and the Middle East in the following year.
Solo Coffee, founded in 2018, is currently in the process of raising £1 million ($1.2 million) in investment, as revealed by Co-founder Theo Garcia. The company has already secured around £900,000 from external sources to fuel its growth and operations.
Asked how Solo Coffee was conducting the new round, he said, “A mixture of private individuals, family offices and maybe a crowdfund.”
Both Garcia and fellow Co-founder Alex Foss Sims maintain an equal shareholding in Solo Coffee. Garcia further mentioned that the upcoming investment round is not anticipated to bring about a significant alteration in the shareholding structure, as the founders are expected to retain majority ownership.
The move into the US will see Solo Coffee team up with what the company called “one of the largest coffee distributors in the country, with access to 60,000 sites nationwide”.
In the meantime, the company has successfully secured an agreement to become the exclusive supplier of coffee concentrate for Florence by Mills Coffee, a brand founded by the renowned actor Millie Bobby Brown.
In the year to the end of April, Solo Coffee generated revenue of £1.2m. “We are aiming for circa £4m in fiscal year 2024,” Garcia said.
On the question of profitability, he said the company is “currently running at a break-even level but are aiming to be profitable this financial year”.
Garcia added, “We are aiming to grow fast but sustainably, raising money for key growth opportunities only.
“We’ve found that investors are now more wary of businesses that are on a ‘grow at any cost’ spending model. We are a super lean business – a team of three – and have low operating costs. We plan to stay as lean as we possibly can, investing in the areas when we feel real pinch points.”
Asked when Solo Coffee could next need to raise funds, Garcia said, “Depends on the opportunities. We are aiming to be fully profitable this fiscal year but will be eyeing key growth opportunities within the US and UK where increased investment may be necessary, particularly in the US.”