London Cocktail Club has abandoned its £750,000 crowdfunding campaign
The cocktail bar was hoping to raise £750,000 on the equity funding platform so that it could open more bars across the UK capital, but it sent an email to users last Friday to let them know this was no longer the case.
London Cocktail Club had raised £231,010 with 14 days to go, according to a cached Crowdcube webpage. The campaign had been backed by 155 investors.
"We are going to be pulling out of the campaign early," Crowdcube emailed its users. "This is because we've received a number of exciting offers of finance outside of the site which are too attractive to ignore (keep your eyes peeled for some exciting new openings coming this year!! :)"
A Business Insider source said people in the industry question whether the other finance offers are legitimate.
Pact Coffee, a London startup aiming to revolutionise the coffee industry, cancelled its campaign last Wednesday, after it raised £190,000, less than a fifth of its overall target. The company, which delivers freshly roasted coffee by post, said 925 investors took part in its campaign.
In an email titled "Some Damn Good News to Kickstart The Weekend!!" London Cocktail Club said: "We'd like to give everyone who got involved some BIG LOVE, and are so happy to have met loads of new friends and fellow boozehounds!"
The company went on to highlight that it has just picked up a number of awards from recommendation platform Design My Night. "People have been voting for the last month or so, and hundreds of bars were in the running. But standard, LCC smashed it!!"
London Cocktail Club currently has five basement bars in the West End and Shoreditch but it wants to open another three this year, according to City A.M., before trebling in size to 19 sites by 2019.
When the campaign was announced on March 1, London Cocktail Club founder James Hopkins said in a statement: "It's an incredible opportunity to make our family bigger and give our actual fans the chance to be a part of it. Our core values are all about serving everybody so we loved the idea that our customers can become our investors - what better way to grow our family than to allow everyone to get involved? It was a no brainer."
He also said: "Each bar typically has a capital cost of £260,000 (excluding any lease premium) and reaches maturity in under two years. At that point a typical bar would have sales of £600,000 with a typical profit of 25%. Some bars (e.g. Oxford Circus) are larger and cost more but offer higher cash profits. After this fundraising and with three new mature bars, annual cash generation is forecast to be around £1.1m which would be available to finance further expansion."
Business Insider has contacted London Cocktail Club but is yet to hear back.
Following termination of the Pact Coffee campaign last week, Pact Coffee founder and CEO Stephen Rapoport said: "Whilst the business is in great shape today, our customers and the crowdfunding community couldn't support our future plans and finance strategy in enough numbers to close the round. So we're doing the smart thing; taking their feedback on board and reviewing our plans before coming back to the table. I'm proud of the business we've built and our plans for the future, but not so proud that I'm against revisiting the plans as we learn and grow!"