Business Growth Fund (BGF), established to help the UK’s fast growing smaller and medium sized businesses, has made its first investment in the North West, with a GBP3.25 million investment in award-winning Mexican street food chain, Barburrito.
This is BGF’s fifth deal in three months, making it currently one of the most active investors of long-term growth capital in the UK and bringing its total investment in fast growing companies to GBP37 million to date.
Founded in 2005 by Manchester based entrepreneurs, Morgan Davies and Paul Kilpatrick, award-winning Barburrito is a chain of fast-casual Mexican restaurants that offer healthy food to eat in or take away. Having started as a single unit in Manchester and the UK’s first ever burrito bar, the business now operates from six sites in Manchester, Liverpool and Leeds and employs over 100 people.
Net revenues for FY 2012 hit GBP4 million and like-for-like net sales are up 20% on last year. Over the last two years the business has invested heavily in operations, branding and its supply chain to enable rapid expansion. Barburrito’s rapidly growing popularity with consumers is due to it consistency in serving fast, fresh and healthy Mexican food.
BGF’s GBP3.25 million equity investment will fund an active rollout programme with the business planning to triple its number of restaurants to c18 sites over the next four years. The bulk of the new restaurants will be in prime locations in London. As a result of this expansion, Barburrito expects to create approximately 250 new jobs.
Mexican food is one of the fastest growing sectors in the restaurant industry at present. In particular, burritos bars are taking off and are expected to be the growth sector of the industry over the next three years.
Davies and Kilpatrick were the first people to open a burrito bar in the UK. Prior to founding Barburrito, they successfully developed and sold an upmarket single site multi cuisine takeaway business, Globe Delivery. In 2009, they teamed up with industry veteran Richard O Sullivan, the co-founder of Millie’s Cookies, who has supported the rapid growth of the business as non-executive chairman.
Following BGF’s investment, Colin Hughes will join the board as a non-executive director, bringing additional experience in the food retail sector. Hughes was previously on the boards of Pret a Manger and EAT, where he was involved in rolling out 100 new sites.
