Healthy eating, healthy growth with Santander Growth Capital scheme
With funding from Santander, healthier eating place Tossed is taking its concept of delicious but healthy food to a wider market.
- Company: Tossed
- Turnover: £5 million
- Sector: Catering
- Healthy eatery chain Tossed started business with one store in 2005, opening another store every year for the next five years, all financed both internally and through loan and leasing agreements. These new stores require upfront financing, but quickly generate profit. However, the company’s lack of a stable financier was inhibiting growth.
- Having previously raised private equity finance, Tossed were now looking to finance expansion.
- Santander provided £1.5 million in a package that included senior debt and hire purchase facilities, and an overdraft, as well as access to Breakthrough Growth Capital, a form of mezzanine financing that does not require an equity stake.
- Santander finance enabled Tossed to launch their ambitious growth plan to open new stores on a regular basis for the next 18 months.
Launched in 2005, Tossed is a restaurant and takeaway company that has grown into a substantial business comprising ten outlets and a turnover of £5 million. Now, with backing from Santander, founder and Managing Director Vincent Mckevitt, and Finance Director Neil Sebba, have embarked on an ambitious new phase of expansion.
“I’ve always been into good food and healthy eating,” says Vincent. “And when I looked around in London there were very few places offering healthy choices and sensible portions.” Sensing a gap in the market, Vincent took inspiration from the salad and smoothie bars of New York and set about creating something similar in London.
Having convinced a landlord that a restaurant/takeaway founded on healthy eating was a viable prospect, Vincent opened his first shop in Paddington, West London, with substantial salads, hearty soups and healthy breads high on the menu. The store was an instant success. “On the first day we were so busy at lunchtime that we had to shut the doors to prevent more people coming in,” he says. Demand remained high, driven by Tossed’s focus on fresh food, prepared in front of the customers. “A lot of restaurants pay lip service to healthy eating,” says Vincent. “It’s absolutely at the heart of what we do.”
With the idea validated, the business began to expand. Vincent opened five more shops in as many years, funded from revenues and a range of loans. Neil joined in 2009 and became instrumental in raising £1.5 million from private equity firm Beringea in a deal designed to enable the company’s first stage of growth.
In 2012, Neil and Vince were introduced to Santander by accountancy firm Baker Tilly. “We were interested in the Growth Finance funding offered by Santander under their Breakthrough programme,” says Neil. David French, a Director at Santander Growth Capital, led the negotiations and was impressed by what he saw at Tossed. “They had been growing year-on-year for seven years,” he says. “And we could see they were very sophisticated. In addition to Vincent, Neil had been brought in from corporate finance boutique Cornerstone as Finance Director and they also had people from Pret A Manger.” Santander was also impressed by the company’s ability to earn revenue from new stores. Although upfront spending was required, the newly opened stores became profitable very quickly.
David could also see that the company had outgrown its initial finance deal with Beringea, as current case-by-case arrangements were making it difficult for Tossed to open new stores quickly. In order to enable the company’s growth plans, Santander agreed to provide £1.5 million in finance, a deal comprising Breakthrough Growth Capital, senior debt, and an overdraft, as well as hire-purchase, Bacs and internet facilities. “All along they really did everything they could to make it happen and they’ve provided a lot of support since,” says Neil. “We were clear that we wanted funding to open more stores and create jobs.”
Breakthrough Growth Capital
Access to the Breakthrough Growth Capital fund proved particularly appropriate. The funding is a form of mezzanine finance that does not require equity, with part of the interest rolled back until the maturity of the loan, thus freeing up cashflow. Impressed by this solution, Tossed subsequently moved its banking to Santander, the migration handled by Santander Relationship Director Andreas Sorteriou. “It is a challenge to migrate banking,” says Andreas. “My role was to make it go as smoothly as possible and I think we succeeded in doing that.”
Since receiving Santander funding, Tossed has announced plans to open several new stores. “It’s an 18-month plan,” says Vincent. “During that time we aim to take the total number of Tossed stores up to 18 or 20.” And both Vincent and Neil are open to involving Santander in their company’s expansion for years to come. “We’ll see where we are in eight months then we’ll talk again,” says Neil.
What is Breakthrough?
Breakthrough is a programme of funding, business support, events and consultancy to help high-performing small and medium-sized enterprises (SMEs) leap to the next level of sustainable growth. Taking part in Breakthrough does not guarantee access to all elements, as each programme is tailored to meet the individual requirements of the business. To find out more, register your interest, and to see if you are eligible, visit the Breakthrough website.
All lending is subject to status.
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Relationship Director Comments
Some people have a great idea but they don’t have the passion or ability to put it into practice. Vincent is one of those people who can take an idea and make it work.