The mini-bond was launched on Crowdcube at the start of June and funding has now reached £1,418,000, 10 days before its closing date.
Investors said to have participated include Carluccio’s chief executive Simon Kossoff, Domino’s Pizza former chief executive Chris Moore, Jamie’s Italian former managing director Kevin Bacon, Costa Coffee former managing director Mike Dowell, Krispy Kreme former chief executive Don Henshall, as well as McDonald’s UK’s former vice-president of marketing and Carluccio’s chief finance officer.
The funds will be used to finance Chilango’s expansion, including the opening of its next venue on Camden High Street in 2015.
The four-year mini-bond presents an interest rate of 8 per cent, and offers two free burrito vouchers to all investors – free food for the duration of the bond for those investing 10,000 or more.
Upon launching the bond, Chilango co-founder Eric Partaker said: “Our Burrito Bond is the perfect way for us to engage with our loyal following as well as Crowdcube’s investor base and accelerate our expansion plans with additional growth capital. As big fans of Mexican food we love everything that is vibrant, fresh and fun and Crowdcube is all of these. Its mini-bond platform is a breath of fresh air amongst the complexity and expense of existing solutions.”
Crowdfunding is becoming an increasingly popular financing tools in the hospitality sector: most recently, Austrian coffee house Kipferl raised £125K on CrowdBnk to open its second site, and River Cottage raised £1m in just 36 hours on Crowdcube at the end of June.
Another successful example is The Clove Club, which raised £250K to fund the opening of its Shoreditch Town Hall venue and went on to become one of the World’s 50 best restaurants.
An appealing offer for loyal customers and friends, mini-bonds are however non-convertible and unsecured, presenting risks for investors.