Kenyan brewer African Originals has announced that it is ready to cede a 10 percent stake as it seeks to scale up its operations through crowdfunding. Speaking to Business Today, African Originals CEO and founder Alex Chappatte revealed the company is targeting to raise at least USD700,000 (Ksh81.8 million as per the current exchange rate of Ksh116.8 per USD).
African Originals, a new company launching both in Kenya and the United Kingdom (UK), was inspired by Kenyan Originals (KO), which has been crafting beverages locally using local ingredients such as lime, mabuyu and groundnuts. Under the umbrella of African Originals, the company will have three brands including Kenyan Originals, African Originals and 58.
Kenyan Originals was started three and half years ago with seed funding from Ms Alex and industrialist Manu Chandaria as the first investors. Later, the company brought on board more investors including experienced players in the alcóholic beverages space.
So far, the company has partnered with over 1,100 outlets in Nairobi, and is looking to expand across the country and the continent. “We are now in a stage where we feel like we have a great network and good advisors and we really want to make this (brand) truly African originals. If truly we are African Originals we should make the target audience be able to own a part of the company,” Ms Chappatte said.
“Crowdfunding makes it very accessible for people to get shares in the company. The minimum share is the equivalent of Ksh1,500 which means our audience can be part of our great story. And then they can be our biggest champions… they are already our biggest champions.”
The crowdfunding will kick off on June 7, 2022, running for 30 days until July 7, 2022, on UK’s crowdfunding platform Crowdcube. She says that the company had limited options for a local platform for crowdfunding.
“You can do a minimum ticket of 10 Pounds which is almost the equivalent of Ksh1,500 or a maximum ticket of 50,000 Pounds. In return, you will get shares in the company in the equivalent of our valuation. You’ll be able to get dividends once we start making money and break even in 12 months,” Chappatte added.
Chappatte says that the only risk involved in the crowdfunding initiative is putting the company information out for the public, which will make it accessible to competitors. The company will also have to deal with divergent opinions and input from new investors, who will want to have their voices heard in the company’s hierarchy of decision-making.
“I have a lot of confidence in the brands we have created so I do not see the sharing of information as a big risk. Secondly, I think by having many people own your company, everyone has their opinion. The benefits of that is that people feel part of that journey,” she says.
In the last year, Chappatte says the company has experienced tremendous growth of between 30 to 40 percent.
She attributes the growth to a gap in the local market, where consumers do not have a choice of quality beverages that they can resonate with.
“I think the beverage space here is really ripe for disruption. We have a pretty significant monopoly, and there are very few markets in world at that kind of monopoly. There isn’t much choice for the consumer. There are no other players challenging what the big players are offering, and particular choices that are relevant to the local consumers. That is where we come in because we have our production here, we have our consumer here and we speak to them every day, and that’s why we are able to innovate quickly,” she added.
Chappatte says that the company is not worried about the increasing taxation by the government, saying that the local consumer is looking for quality beverages that justify the prices.
“In this market it’s sort of a hygiene factor. We are in a premium market where we invest on quality to justify the higher price. Consumers are willing to pay a higher price for the quality and therefore the increases are less impactful as compared to the lower mass markets,” she says.
The company, which is based in Nairobi’s Baba Ndogo area has two bottling lines, and also a canning line.
Read Also: The Making Of a Kenyan Craft Beverage Brand