Sydney craft beer business Batch Brewing Co. has closed its equity crowdfunding round, hitting its $1.5 million maximum after just five days.
The Equitise raise opened to investors who had expressed an interest on Monday last week, and within two-and-a-half hours it had hit its minimum target of $500,000.
It opened to the public on Thursday, and hit the $1.5 million cap just over 24 hours later, on Good Friday.
Founded by home brew enthusiasts Andrew Fineran and Chris Sidwa back in 2013, Batch secured a small amount of early funding, which Sidwa says was largely about vetting the business plan.
Since then, it’s been self-funded, he explains.
The business operates out of two venues in Sydney’s inner west — a main production brewery and tasting room in Marrickville, and a second, more experimental venue in Persham, focused on R&D.
In the 2020 financial year, Batch generated $3.3 million in revenue.
Now, it’s time to push it to its next level, Sidwa says.
“That required more than we had access to, personally.”
Like many entrepreneurs who go down the equity crowdfunding route, the founders were focused on the community and the values behind their brewery.
The business isn’t really of a size that’s of interest to traditional equity investors, Sidwa notes. But, they also didn’t want to change their business model or become more ‘corporate’.
The founders are “not 100% capitalist in nature”, he explains. They’re about giving back to the community, and operating as sustainably as possible.
And, while that sometimes attracts a particular kind of customer, it’s not always the most profitable direction to move in.
By going down the equity crowdfunding route, people who appreciated that side of the business could choose to own a part of it.
“I hope that’s the way the world is going … I hope people want to get behind products that try to do their best.”
Craft beer post-COVID
The successful raise follows an “incredibly challenging” year for Batch brewery.
As the hospitality industry shut down due to the COVID-19 pandemic, the keg business — providing beers on tap to local bars — dried up entirely. One Batch venue was temporarily closed, and the other transformed to become a bottle shop.
The team even changed the size of their cans to make them better suited to fit on the shelves of other stores, too.
At the beginning of the pandemic, they had only just started offering delivery, and they did see an uptick in orders coming through as people consumed more alcohol at home.
But, while elsewhere we’ve seen consumers shifting to support local businesses, Sidwa says Batch didn’t necessarily see that.
About 95% of the brewery’s sales are local anyway, he notes.
“We were already attracting those customers.”
What he did notice was people looking for value — opting for the cheaper slabs from the mainstream stores.
“Money was tight, and you didn’t know when it was going to end.”
Now, however, both tasting rooms are back open, and Batch is gearing up for bigger and better things.
The funding will be used to boost its presence in New South Wales, and to expand into into other Aussie states and territories.
The co-founders are also focusing on building out the team. They’re still managing tasks like bookkeeping and ordering labels, Sidwa explains, rather than focusing on the business growth.
They’re looking for people who can take the pressure off, he adds, “but also people who are smarter than us in areas we’re not experts in”.
Having the round close on Good Friday meant the team could let their hair down and relax over the long weekend, Sidwa adds.
“Everybody is ecstatic. To see the outpouring of support was really powerful.”
But, now the hard work begins. They’re starting to lay out the plans for the next few months, and starting to divide up the work — albeit a few weeks earlier than expected.
“It was a very big sigh of relief,” Sidwa says.