Union Roastery
Funded

Roastery offering quality and affordable blends

DEAL TYPE Revenue share
MINIMUM INVESTMENT MYR 10,000
FUNDRAISING GOAL MYR 300,000
HEADQUARTERS Malaysia
CLOSING DATE 23 April 2019

Investment highlights

Update

In response to the developing demand for this deal, we are pleased to share that this campaign has been extended to Tuesday, 23 April 2019, which will be the end of the campaign as well

Capitalising on a great market opportunity

Malaysia coffee market value grew at a CAGR (2013 – 2018) of 7.2% from USD1.3bn in 2013 to USD1.8bn in 2018; driven by rising urbanisation, increasing disposable income and growing coffee-drinking culture

Unique coffee blends

Combining different types of coffee beans such as Columbia Supreme Arabica, Brazil Santos Arabica, and Rwanda Arabica to find suitable blends for their clients

Strong customer base

Supplies to >25 customers including Kettle Bell, Little Salty Cafe, and Union Chain Group, with plans to target more small independent cafes and restaurants

Robust traction

Achieved an average EBITDA margin of c.28% in the first year of operation; forecasted to generate revenue of MYR450k, with EBITDA of c.29% in 2019

Capable management team

Led by a serial entrepreneur and investor with >18 years of experience in entrepreneurship, investing, Food & Beverage (“F&B”) and corporate finance

Use of proceeds

  • Repayment of advances to Union Chain Group for outlet expansion
  • Working capital requirements

Background

  • Established in 2018 by serial entrepreneur, Tham Lih Chung, Union Roastery is a coffee roaster located in Kuala Lumpur, Malaysia
    • Roasts unique coffee blends by combining beans of different origins, varieties, and densities to strike an overall balance and complexity of flavours to suit the varied taste of clients
  • Sources a myriad of quality coffee beans, including Brazil Santos Arabica, Colombia Supremo Arabica, and Rwanda Arabica
    • Amongst its blends, the two popular products are:
      • Beginning Blend – consists of 50% Brazil Santos Arabica and 50% Laos Robusta with medium dark roast level
      • Libra Blend – consists of 90% Brazil Santos Arabica and 10% Colombia Supremo Arabica with medium roast level
  • At present, it supplies to >25 customers including Kettle Bell, Little Salty Cafe, and Union Chain Group
    • Current output on average is c.325kg / month from Aug 2018 to Jan 2019, with a maximum capacity of 2,500kg / month; plans to increase maximum capacity to 10,000kg / month by the end of the year
  • Revenue is generated through: (1) sale of coffee beans priced between MYR65 – 75 / kg; and (2) delivery fees, charged when orders fall below 10kg / month
    • Generated an average of c.28% EBITDA margin in the first year of operations; forecasted to generate revenue of MYR450k, with an EBITDA margin of c.29% in 2019
  • Expansion plans include: (1) developing new blends; (2) R&D in roasting and cupping; and (3) securing more small independent cafes and restaurants

Traction

  • Generated an average of c.28% EBITDA margin in the first year of operations; forecasted to generate revenue of MYR450k, with an EBITDA margin of c.29% in 2019

Management team

Lih Chung Tham
Founder & CEO

- Serial entrepreneur and investor who founded Rhombus Connexion and Union Group; invested in Barista Guild Asia, Aavri Group (Singapore) and amongst others
- Former Assistant General Manager (Corporate Strategy Department) of MMC Corp Berhad, and Manager at RHB Investment Bank
- Major deals involved include:
Capital repayment by DIGI.com
Relisting of Gas Malaysia
Relisting of Malakoff
Privatisation of Aliran Ehsan
- >18 years of experience in entrepreneurship, investing, F&B and corporate finance