Awesome Merchandise has launched a £350,000 crowdfunding initiative to help accelerate its expansion plans in the US and Europe.
The fast-growing Leeds business has found a suitable site in Austin, Texas, and is poised to launch its offering to the huge US market.
Awesome Merchandise was established in 2005 by Luke and Charlotte Hodson. The business began life in Luke’s bedroom, making badges using a £300 Lexmark printer while the couple were both still students.
The company expanded rapidly and is now based in a 2,140sqm unit in Leeds, kitted out with a wide range of equipment including screen printing, digital printing, and embroidery. The firm employs more than 80 staff.
Sales last year were £5.5m, up 50% on the prior year and the firm aims to reach £8m turnover this year.
The crowdfunding initiative, via Crowdcube, allows supporters to invest between £10 and £50,000 with a range of rewards and incentives for investors ranging from discounts to t-shirts and branded investor pins, or even having one of the firm’s machines named in the investor’s honour at the top end. The A and B shares on offer represent a 5.83% stake in the company.
“We have been looking at Crowdcube as an option for around a year. This was at the same time we decided we were going to launch Awesome in the US. We fully committed to it in April and it has taken us around three-and-a-half months to get ready to launch,” Luke Hodson told PrintWeek.
The fundraiser values the business at £5.65m.
“The valuation is 10x EBITDA for our 2017 figures and our current growth rate in UK year-to-date for 2018 is around 31%. We have scalable systems and a website in place as well as a strong brand that we are confident we will get traction in new markets and continue to grow in the UK,” he stated.
Hodson said the firm was “open to overfunding if the campaign is successful”.
The Crowdcube information was emailed to the firm’s customer list yesterday, and at the time of writing the firm had already received pledges totalling almost £100,000 with 42 days of the project left to run.
Awesome Merchandise has carved a niche for itself supplying a wide range of customised products to bands and performers, events, creatives, and a host of companies from major brands to micro-breweries. Products include t-shirts, tote bags, caps and hats, badges, stickers, tea towels and even plectrums.
Its product range currently spans 650 product types, and it has plans to expand the range substantially. In its investment pitch, the firm said that it aimed to take its model to the US and “recreate these types of partnerships” there.
“The fit out [in Austin] is coming to a close in the next two weeks. We already have our phase-one equipment in place and this is basically a very extensive screen print setup that means we will be ready to print a lot of t-shirts, bags, tea towels, caps and more from September,” Hodson said. “The idea for the US factory is to get to a place where it closely replicates what we have in Leeds. We expect there will be some equipment and product differences to suit the US market.”
It has already committed to making a £750,000 investment of its own on the expansion plans, including the US factory launch, and on the development of a new e-commerce website that will be rolled out across the US, UK and Europe.
“We've been bootstrapped to this point and we are super-excited that we have got to this point and about the possibility of getting investors, customers and family involved in the next stages of Awesome,” Hodson said.
Sam Jarvis has joined the firm as head of US operations, and both Luke and Charlotte Hodson have been spending a lot of time in the US as the new facility ramps up.
Hodson said the business had made some key appointments as a result of the plans, and had a "great management team in place" to cope with the expansion.