Knoops in £5m fundraising as it bids to be the Starbucks of chocolate cafés

Knoops is raising £5 million in a deal that values the fast-growing chain of chocolate drink cafés at £34 million as it bids to open up to 5,000 stores worldwide in the next decade.
The business has taken off since chief executive, William Gordon-Harris, first sipped a Ugandan, 80 per cent cocoa hot chocolate, at a tiny café in Rye, Sussex, in 2019. He later teamed up with the café’s German founder, Jens Knoop, to expand the brand.
Knoops now has 21 shops, with a target of 300 in the UK “within a few years”, Gordon-Harris said. “We will do for drinking chocolate what Starbucks and Nespresso have done for barista coffee, embedding it on the high street and at home.”
Knoops sold more than £1 million worth of chocolate flakes — used to make hot chocolate in home coffee machines — on its website last year. It is also stocked in Harrods, Selfridges and Whole Foods.
“This is the start of a chocolate revolution,” Gordon-Harris claimed. “I sit in investment meetings with predominantly middle-class, older white men who say, ‘I just like hot chocolate when I go skiing.’ Then I take them into their office kitchens, see their £1,000 coffee machine sitting next to a pot of Cadbury’s hot chocolate powder, and point out that 30 years ago, they’d have had a box of Maxwell House coffee there. We’re just at the start of the journey with chocolate.”
Knoops’s £5 million fundraising, via the government-backed Enterprise Investment Scheme, will include £1 million raised by its customers via crowdfunding platform Crowdcube. Perks will include private chocolate-tasting events.
The firm’s board includes Pret A Manger and Itsu founder Julian Metcalfe and former Sanctuary Spa chief executive Alice Avis, while Andrew Gerrie, the co-founder of Lush and former chair of rival chocolate-café chain Hotel Chocolat, is an investor.
Knoops’s revenues more than doubled in the year to April, from £4.3 million to £9.3 million. Sales at stores open for more than a year rose 29 per cent. Underlying earnings were up 131 per cent on a like-for-like basis, to £979,000.
Knoops is opening its first overseas outlet, in Dubai, next month. “The UK is simply our test market; there’s nowhere that doesn’t suit our product,” said Gordon-Harris. “I’ve had a call this morning from Australia, and we’re looking at South Korea, Mexico, plus China, India and America as major markets. Our global footprint will be 3,000-5,000 stores. “As we are not a food preparer, scalability is much less complex for us.
He added: “Our stores are extremely profitable, so we can build with sensible debt rather than huge fundraisers. Landlords are also giving us increasing capital contributions, as we improve their estates. As Knoops moves into China and America, we will start with equity-owned stores then franchise to scale. We will be a chocolate unicorn.”