London-based Sourdough Sophia is set to extend its retail footprint after raising just over £500k from crowdfunding.
The craft bakery business launched a campaign via its mailing list, website, and socials seeking investment to help increase its shop estate from two to five by the end of 2025.
Within the space of just a couple of weeks, it received pledges from nearly 180 different investors.
“We are absolutely delighted with the support we have received from our existing investors and loyal customers in helping us reach our funding target so that we can move to our next step of growth of Sourdough Sophia,” commented founder Sophia Handschuh, who set up the brand with her partner Jesse Sutton-Jones from their dining room in 2020.
Later that same year, the couple raised over £33k via Kickstarter and invested a further £122k of their own money to open their first high street bakery in Crouch End. Another £500k crowdfunding round helped Sourdough Sophia move into a 2,400 sq ft site on Essex Road in Islington, which was formerly a Costa Coffee.
At around six times the space of its original shop, the location houses a new café opened in April of this year as well as a production unit capable of supplying up to three additional shops. The business is now actively looking at new opportunities for its next sites, confirmed Handschuh, with locations likely to be in central or north London. The third and fourth shops are predicted to cost £375k, with the fifth funded by the company’s own cashflow, while the remaining £125k of the raise is to be spent on growth of systems and a head office.
Sourdough Sophia currently employs 40 staff across its shops and bakery, and has a projected revenue of £1.8m for FY24. It is targeting turnover of £6m by 2026 with a long-term ambition of 10 sites and a £20m valuation.
Its investor pack drew comparisons with other small craft bakery chains including Pophams, Jolene, and Pavilion – Sourdough Sophia had similar pricings for a flat white (£3.50), sourdough loaf (£5.50), and croissant (£2.80) but had a better Google Reviews rating (4.8) and far more Instagram followers (230k).
It also noted that it was placed within 100m of five other bakeries including Gail’s, which it claimed demonstrated the ability for several brands to flourish within the same high street. Around 93% of Sourdough Sophia’s trade is done in-store, and the rest via delivery, with customers spending an average of £8.35 per visit.
Two key people have been brought in to help guide the business’ expansion – Steven Rimmer as an advisor and Harry Stoakes as a non-executive director. Rimmer is a former director of crowdfunding platform Seedrs, and now provides consultancy services and mentoring to individuals, aspiring startups, and growing businesses, including within the food sector. Stoakes is a leisure sector mergers & acquisitions partner at advisory firm BDO and brings a vast knowledge from his experience advising multi-site businesses on their growth strategies, including with Costa and KFC.
German native Handschuh explained that ‘real bread’ was part of her upbringing, with her father Manfred working in several bakeries in towns around Frankfurt. “From a young age, he taught me how to bake bread with just flour, water and salt – no additives or nasties,” she said.
“When I moved to London I couldn’t find any real bread in my local community and was astonished by how little everyone knew about the benefits of sourdough bread. We’re now running two bakeries, a CPU and an annual turnover of nearly £2M; and we are just getting started,” Handschuh added.
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