Founders First partners with Brisbane's Ballistic Brewing
Craft beverage accelerator Founders First has continued its investment into independent craft breweries, today announcing a partnership with Brisbane-based Ballistic Brewing.
Founder David Kitchen said that the investment, which follows on the heels of Founder’s investment in Marrickville’s Sauce Brewing, will enable the brewery to continue its expansion nationally.
Last month Ballistic opened its second brewery, and its third venue, with the launch of its 800 litre brewery / 350-seat venue in the developing suburb of Springfield, west of Brisbane.
“We had been working on expanding nationally already, we’ve had a rep in Victoria and New South Wales and as a business we need to continue with that,” Kitchen told Brews News.
“What has become increasingly clear with the launch of Springfield is that venues are very much the direction we want to keep going with.
“We’ll certainly be doing more venues here and, ideally, in support of our distribution expansion into other states.
“I want to build venues like Springfield that has a very strong community and, if we find venues like that, it stays very true to our expansion.”
Kitchen said while Founders First investment gives it a minority stake in the business, its primary role is in the sales activity.
“[This] provides us with the opportunity to share in a pool of fourteen sales reps across Australia in a manner which will be both resource and cost efficient,” Kitchen said.
“Sales is the area where for any small brewery, trying to put reps into other states is hugely expensive and trying to get traction as the number of breweries increase is hugely difficult.
“What Founders First does is the sensible thing and that is bring together a bunch of mutually compatible breweries working together to promote each other’s products.
“It’s a really logical business decision to make, cutting out so much of the cost.”
Kitchen said Founder First provides the platform for that combined sales role.
“To do that it needs some sort of structure so we all do it correctly, we all do it professionally and the overall experience to the customers is a much better one.
“That’s what I believe Founders is bringing, the backend support to leave us to continue what we do best and that is building our communities and brewing great beer and developing our own brands.”
Founders First’s two latest investments come shortly after the craft business investment firm saw its second capital raising of the year close oversubscribed.
The company announced last month that it had been initially seeking to raise $10 million through its series B offer, but that offer closed with the board accepting $13 million of subscriptions. This took the total capital raised in 2019 to more than $21 million, with some investment coming from overseas including investors in Hong Kong and London.
Founders First CEO Mark Haysman said the second capital raising’s overwhelming success built strong momentum as the company heads towards a prospective IPO.
“As a business we are focussed on the compelling offer we hope to take to market in the near future,” Haysman said.
“The capital raised during 2019 has enabled us to identify a number of independent craft beverage businesses that will benefit from partnering with us and our investment will accelerate their growth.”
Kitchen, a board member of the Independent Brewers Association, said the structure of the Founders First investment raised no concerns about Ballistic’s independence.
“It has no control at all,” he said. “It is a minority investor in us so we retain full control.”
“[Any] IPO doesn’t have anything to do with us. Other than they have minority interest in us. That IPO would have no flow on effect to us. It’s got nothing to do with us, nothing to do with our capital structure at all.
“It’s an entirely different business and [an IPO] would just give them the financial wherewithal to provide the suport we need.”
Founders First’s Mark Haysman joined Beer is a Conversation earlier this year to discuss the business and its plans.