Coffee review and recommendation app and website Beanhunter recently successfully completed a $500,000 funding round.
Participants in the round include PC Tools founder and major backer of Freelancer.com, Simon Clausen through Startive Ventures and ex iPrimus head Campbell Sallabank through XSallarate, who also advised on the investment round.
Beanhunter CEO James Crawford remarked that it is great to have the support and ongoing participation of such experienced entrepreneurs.
“Our strategy is to use this funding to continue enhancing our platform to accelerate the growth of our community of coffee lovers while driving new business to our café partners,” he said.
“We are proud to be the international specialist in coffee and café reviews,” James continued. “Currently the app and site have over 1.3 million monthly user sessions, 14,000 cafes listed globally and 100,000 reviews – with this funding we plan to grow this dramatically.”
What is the story behind Beanhunter?
Beanhunter was founded in 2009 by James Crawford, Al Ramsay and Adam Lowe.
Al used to travel a lot for his previous role and was frustrated with not being able to find great coffee shops. Information was scattered across blogs and personal websites – there was no one destination that showed the best coffee shops in real time that was driven by the coffee community.
Beanhunter has since grown to become a top destination for coffee aficionados and coffee lovers around the world to find and share great coffee.
It now owns the review site Beanhunter.com, the Beanhunter app, the coffee bean marketplace Beanbuy.com.au, and the leading coffee industry job site, CoffeeJobs.com.
A change of plans for the better
Beanhunter was actually looking to raise $3 million at a post-raise valuation of $10 million after acquiring CoffeeJobs.com last year. Chris spoke to Anthill in detail about the factors behind why they have chosen to raise do this $500,000 round instead.
“Initially our thoughts were to go for a higher amount at a higher valuation. The market feedback was very positive however given that there were two areas of the long term revenue model yet to launch and to be commercially proven there was some resistance to the valuation we were seeking. We also did not want to dilute too much by raising a larger amount of money at a low valuation.
“We quickly read the situation and re-cut the round to match the market and by doing this were successful in raising the capital we need for the next stage without giving up too much equity and without wasting too much time. This will then give us both momentum and a broader investor base moving into subsequent rounds as required.
“We feel the biggest mistake we could have made would have been to waste more time holding out for the best possible deal. By taking a pragmatic approach, we now have the funding to move the business to the net stage. It is also very exciting to now move to full execution mode rather than more ‘pitching’.
“This $500,000 is really a seed round. It is however the biggest round we have done to date by a long way.
“In terms of future capital requirements, we have structured the business plan to not need any additional funding. Having said that to be a truly competitive worldwide business typically requires many millions of dollars in funding. We have parties interested in investing larger amounts that we will be following up over the next 12 months. The focus now however is deliver to our plan.”