It’s a simple but brilliant idea. People love eating out together. Chefs want to reach new customers and promote their skills. A city such as London has innumerable unusual locations that can be used as dining venues. Enter Grub Club, a web platform designed to connect diners, chefs and venues.
Set up by friends and business partners Siddarth (Sid) Vijayakumar and Olivia (Liv) Sibony, Grub Club is a classic model of the sharing economy. So much so, that it featured in the recent Wosskow review Unlocking the Sharing Economy as an example of how to extend this economic concept into the food industry. (You can read the Government’s response to the paper here.)
Grub Club’s business model is straightforward. A chef makes a dinner proposal to Grub Club, who vet and approve it. Some 70 per cent of applications don’t make it through. Once approved, Grub Club makes a booking fee for each ticket sold for the chef.
The sharing element is really important. It is all about the whole package. “We’re not about high-end or individualistic dining experiences. Our brand is about social connections. Grub Club is about the experience, the people and the space; it is not a restaurant experience for amazing food.”
So Grub Club members are signing up to occasions ranging from dinners in a clock tower apartment of St Pancras railway station to afternoon teas in private homes.
Three stages of finance
Getting the finance to start and grow the business has been one of the pair’s biggest challenges and triumphs to date.
“The Start Up Loans process was amazing for us, and an absolute godsend.” She is careful to point out that even a nascent business has to understand the right point for taking on such a loan. “It’s a loan; you have to know that you will be able to pay it back.”
It wasn’t just cash that Start Up Loans provided, but also a mentor. Now Vijayakumar and Sibony are building a small network of mentors to tap into. The trick of getting the most out of a mentor, says Sibony, is being “smart and focused about using their time. They often don’t have as much time as they would want to give, so you need to be very specific about where and what you need their advice.”
Recently, the company has raised additional funds from a crowdfunding round on Crowdcube. Vijayakumar and Sibony aimed to raise £250,000 – they reached £325,000.
“There are two benefits from crowdfunding – you raise money but you also raise awareness,” says Sibony. “It’s a great opportunity to enable your customers, chefs and the wider public to own a piece of the company and become part of the journey together.”
And with the investors can come very useful contacts. One of the first investors was already a customer and will soon be joining the Grub Club board.
Revenue growth at Grub Club has been brisk and steady. So is the other key metric – seats per month. The additional finance means that the founders can now accelerate.
Of course this will present challenges – from how to get the best possible return from their marketing budget to implementing the systems and processes that will enable them to manage their growth successfully. It also means having clear goals.
“There’s so much potential in the concept that people tell us that we could expand into all sorts of areas. It is so hard to say no, so you must have a clear purpose in mind at all times.”
“We have figured out what works,” says Sibony. “Now we need to be rigorous in order to deliver consistently and at scale. I want a Grub Club all over the world so I can arrive in any town or city and attend a local dinner, meet friendly people and feel at home wherever I am.”
Visit our page on finance options for new business to learn more about the Start Up Loan scheme. Go to equity finance for growing businesses to learn more about crowdfunding. The Business Finance Guide, published by the ICAEW and the British Business Bank, sets out the full range of options for businesses – from start-up to growth.
Tax reliefs and incentives are available to help companies of all sizes to secure funding.