Former pub entrepreneurs raise £50m for new leisure-focused growth fund

Imbiba, the leisure- and hospitality-focused growth investor founded by former pub entrepreneurs, has closed a new fund at its maximum target of £50m after grabbing £30m from the British Business Bank.

The firm, which helped to found pub chain Drake & Morgan in 2008, has been investing in the sector for more than 20 years. Bar chain Darwin & Wallace, Temper restaurants and family-focused private members' club Purple Dragon have also received backing from the company.

When it sold Drake & Morgan to private equity firm Bowmark for £30m in 2013, Imbiba made an impressive 5.7 times return on its money invested.

"Having traded through different economic cycles over the last 20 years, we see some fantastic opportunities in the current leisure market and believe that an agile £50m fund will be key to help to drive the growth of some of the more dynamic businesses in our industry," said Imbiba chairman John Connell.

Connell, who built and sold two pub empires before creating Imbiba, will run the fund along with former Cadbury-Schweppes finance director Simon Wheeler, private equity veteran Brian Phillips, marketing expert Fraser Bradshaw and private equity investor Darrell Connell.

The business seeks to invest between £1m and £10m in high-growth companies, and retain a stake for around five years.

The new fund might be seen as a risky manoeuvre, since a lack of real wage growth and consumer uncertainty is said to be piling pressure on retailers and hospitality businesses. Yet according to Deloitte, the UK leisure and hospitality market is estimated to be worth £117bn and accounts for 7.4 per cent of GDP. Imbiba believes that with the growth in frequency of spend rising dramatically over the last 15 years, new opportunities exist for entrepreneurs.

The £30m from the British Business Bank came from its Enterprise Capital Funds programme, which contributes a mix of public and private money. It has so far committed £1.14bn (including third party cash) to investments including 27 venture capital funds, and in the Autumn Budget last year the government promised to contribute another £1bn to the programme.

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