GreenBank Capital (CSE:GBC) Inc said it has agreed to a £1.5 million (C$2.63 million) loan facility with portfolio company Staminier Ltd to complete the second tranche of its investment in online food delivery platform Beelivery.
The company said the investment will enable Beelivery to accelerate its business strategy as it seeks to gain 450,000 new customers over the next two years. Greenbank previously announced an agreement to acquire up to 25% of the issued capital of Beelivery.
UKTV Ventures, a commercial subsidiary of the UK’s national broadcaster BBC, is also a party to the agreement and under its investment into the grocery delivery platform, it will be providing airtime for a forthcoming advertising campaign for Beelivery.
READ: GreenBank completes first tranche of investment in online food delivery platform Beelivery
GreenBank has now appointed a director to the board of Beelivery and said it will work closely with the company to expedite its exponential growth plan.
"Beelivery is an exceptional business with real potential to become best in class in the very fast-growing and global online grocery delivery market,” GreenBank CEO Terry Pullen said in a statement.
“We are delighted to be involved with such an exciting business run by a first-class team and we are very much looking forward to helping them achieve their ambitious goals,” he added.
Beelivery sources its line of products from any grocery outlet local to the customer and unlike most of its competitors, Beelivery has more than 90% nationwide coverage in the UK and average delivery times of only 46 minutes. Orders can be placed by customers, and deliveries are carried out by a team of independent drivers, 24/7, 365 days a year.
The company was founded in 2015 and just under £8 million (C$13.68 million) of orders were handled in the last financial year to September 2020, generating a profit at an EBITDA level.
Having demonstrated the robustness of its business model Beelivery is using the GreenBank and UKTV investments to help rapidly scale the business, with management targeting orders of over £370 million (C$645 million) in the year to end-September 2023.
GreenBank said the funding for this second tranche was provided by way of a secured loan from Staminier. GreenBank currently owns 19% of Staminier's shares and has an option to acquire the rest for a consideration consisting of the issue of GreenBank shares. It said it intends to complete that acquisition as soon as possible once it has obtained agreement from certain investors in Staminier and has cleared any regulatory hurdles.
The loan to GreenBank carries an interest rate of 7.5% per annum unless the acquisition of Staminier is completed, in which case the interest rate shall be zero. It is repayable on the earlier of GreenBank raising more than C$5.2 million from the issue of new common shares to investors or on the 31st of December, 2022.
GreenBank is a next-generation merchant banking business with offices in Toronto, Dallas, New York, and London.
Contact the author at stephen.gunnion@proactiveinvestors.com