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Deal announcement - 23.5 Degrees

28 September 2015

We are delighted to announce a £5.6 million growth capital investment in 23.5 Degrees, Starbucks’ first ever franchisee.

  • Investment date: September 2015
  • Investment: £5.6 million
  • Legal advisers: Gateley plc

23.5 Degrees was launched in 2012 in response to Starbucks’ strategic decision to build its UK business through franchising, and currently operates 13 stores across six UK counties.

Connection Capital’s investment will provide working capital for the roll-out of new stores, enabling 23.5 Degrees to extend its reach into additional regions in the UK. The cash will also facilitate the raising of debt finance from the Royal Bank of Scotland, which will be used to acquire 16 further sites. With Connection Capital’s investment 23.5 Degrees remains on track to achieve its goal of opening 100 stores over the next five years.

This investment broke new ground for Connection Capital being the largest private equity investment to date and the fastest fundraise with £5.6m raised in just 6 days.

The deal proved very popular with Connection Capital clients because:

  • 23.5 Degrees is run by a highly qualified and competent management team with backgrounds in Starbucks, KFC and Dominos franchises
  • world class international brand
  • majority EIS eligible structure
  • the continued growth of branded coffee chains across the UK, with outer London and the regions still considerably under-penetrated.
"This is an attractive opportunity to invest in an ambitious UK company, backed by a world class international brand. The energy, drive and experience of the management team, the strong relationship with Starbucks, and the continued potential for growth in the UK coffee market, made this a really exciting deal to present to our investors.” - Pascal Wittet, Investment Director

If you are interested in receiving more information about future investment opportunities and are not yet a client of Connection Capital, please contact Steve Wilson.