The irreverent team from Morningcider are hitting up the crowd for a million dollars to underpin their push into overseas markets and maybe break a world record.
The company known for its penchant for puns has opened an equity crowdfunding campaign on PledgeMe, seeking between $500,000 and $1.1 million by selling shares at $1 apiece, and valuing the Auckland craft cider firm at $8 million before any money comes in the door.
The goal is to be at the forefront of what the local industry sees as a $1 billion export opportunity, with the money raised going towards getting the team overseas to pitch their wares and tweaking the product for local tastes, such as the preference in China for bottled drinks over Morningcider’s existing canned range.
“We’re in that awkward space where we’re bigger than the smaller companies but have heaps of room to grow,” co-founder Tim Shallard said.
Morningcider currently produces about 200,000 litres a year and can scale up fast through multiple contract manufacturers if demand explodes.
Shallard said tapping the crowd through PledgeMe doesn’t just bring on investors, it also creates “brand ambassadors with an incentive to share the news”.
How you like them apples?
As its information memorandum – dubbed Incider Trading (without the jail time) – says: “Crowdfunding isn't just about raising capital; it's about staying true to both who we are: cheeky, disruptive and deeply connected to Morningside and what we're about: fostering a movement of people who want something different.”
While the investor document and slick promo video – produced by All Good Media – are ripe with puns, the financials are clear on how the team plan to spend the money and what the investment prospects are beyond supporting a local company with a sense of humour and plenty of community spirit.
Morningcider lifted its annual sales 41% to $1.79 million in the March 2024 year for a 59% increase in gross profit to about $529,000, while its loss before interest, tax, depreciation and amortisation narrowed to $215,000 from $234,000 in the prior year.
The March 2025 year is forecast to report annual sales of $1.83 million and a gross profit of $749,000 with an editda-loss of about $152,000.
The financial gains are expected to come in the following three years as the marketing drive at home and abroad kicks in, with positive ebitda of $455,000 projected in the 2028 financial year on sales of $8.1 million and a gross profit of $3.25 million.
All that jazz
They’ve tagged the bulk of the funds to go into the export drive in China, Australia, Hong Kong and Taiwan, develop new markets in the US, Canada, Japan, UK and Europe, and mount a domestic marketing push, with the increments staggered depending on how much they raise in the crowdfunding campaign.
They've also set aside $30,000 to plant 400 apple trees, adding to its existing 100 around Morningside in Auckland, in a bid to create the world’s biggest urban apple orchard.
And for prospective shareholders, the crowd supporters holding as much as 12% of the company will be backing Morningcider to reinvest its earnings back into the business to fuel future growth with an eventual private equity sale or trade acquisition seen as a potential liquidity event down the track.
Morningcider’s directors looked at trading platforms to provide a degree of liquidity for its incoming shareholders, but decided against it given the cost and expected number of trades per year. Instead, the share register will be managed inhouse with a list of interested buyers maintained and matched if any shareholders choose to sell.
“It’s a fun opportunity to support what I think is a pretty cool business,” Shallard said.
Reporting by Paul McBeth. Image from Curious News.