Behemoth Brewing is celebrating a bittersweet capital raise that netted them $1.8m but left some investors upset they were unable to invest because of technical glitches.

Owner Andrew Childs said the capital raise through Snowball Effect felt “awesome” but he was disappointed that some people who wanted to invest couldn’t do so.

The second capital raise was initially open only to existing shareholders and that netted $1.3m last week. The remaining $500,000 worth of shares went public on Monday at 1pm but “unprecedented” demand caused the Snowball Effect website to crash.

Snowball Effect paused the offer while they sorted out their technical issues, noting on the website: “Please Note- Earlier this afternoon this offer page was inaccessible to some investors, leading us to pause the launch of the offer until we are confident that the page will be accessible to all. We will be notifying those who have indicated interest by email when the offer reopens.”

When the offer went live again at 4pm it was fully subscribed within 23 minutes.

Today the company issued an apology to investors who missed out.

“The offer was heavily subscribed for by existing investors over the course of the last week, and by the time it was launched to new investors, there was only capacity for a small number of investors to secure the remaining capital, resulting in the disappointment of up to 2,000 investors that had expressed interest,” the company’s email said.

“The scale of the demand and limited pool of remaining shares meant the offer closed in less than 20 minutes.

“This was a very unique situation. Our offers normally run for up to 30 days, giving plenty of time for investors to review all the material and make an investment decision.”

Childs said he has been told the level of interest was unprecedented.

“Snowball Effect said their traffic was 40 times higher than they’d had in the past.”

He said he felt the pain of those who couldn’t buy shares.

“I couldn’t get into website myself – I had to rely on other people telling me that we’d reached our target – so I felt the frustrations other people.”

A number of people posted on the Behemoth website about their disappointment.

“… A totally botched offer process for those who tried to get through,” wrote one person. Childs said he’d also received emails from “one or two particularly angry people” but that he’s had lots of positive response as well.

He said people who missed out were likely to get preferential treatment if Behemoth do any further capital raising.

“Snowball Effect were so professional and so good to deal with, but we were let down by the technology.

“On one hand we’re incredibly stoked – we knew coming into Monday that we would be fully subscribed but we would have liked that process to be cut and dry. If people missed out because it was fully subscribed that’s one thing – but a lot of people got part the way through the process and the website crashed and they couldn’t reload or refresh it.”

The glitches aside, Childs was astonished at the level of interest in his business with this capital raise happening much faster than his initial $2m raise 18 months ago through PledgeMe.

“This didn’t happen last time around and I’m not sure why other than to say it’s been a crazy 18 months.

“We’re really pleased with faith shown by existing shareholders, that was much more than expected. The overwhelming thing is how much faith people have in what we’re doing.”

A planned brewery expansion to be covered by this round of funding is well underway with the first beer on the new kit to be released this week while a canning machine is due to be commissioned.

Childs said they wouldn’t rush the next stage of their development which involves opening new suburban venues in Auckland, Wellington and Christchurch and a barrel-room in west Auckland.

“We’re not sitting on hands but we’re not rushing as we want to make sure we get the right venues for what we want to do.

“We definitely we feel we can change the way beer is done in New Zealand in terms of the venues we’re looking to open up.”

Childs also said that now he was in his own brewery he wanted to make more experimental beers. “We’ve got lots of beers in mind that we haven’t made because they’re too fiddly to do in other people’s breweries.”

Existing shareholders paid $1 a share 18 months ago but those shares were revalued at $1.32 for this offer – reflecting the new $34 million valuation of Behemoth.

The brewery was valued at just over $23m ahead of the first capital raise and the new valuation – despite a more conservative assessment process – reflects the massive revenue increase in the past year.

Behemoth used a revenue multiple of 5.5 when valuing the company in 2018. This time they based the valuation on a revenue multiple of 4.05 on predicted annual revenue of $8.4m for this financial year and a multiple of 3.9 for predicted 2021-22 revenue of $8.7m.