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Riot Foods hopes crowdfunding market will warm to offer of non-voting shares

Monday 5th February 2018

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Riot Foods, which markets nut butters, breakfast mixes, protein powders and biltong, is a third of the way to its target of raising $600,000 on PledgeMe with four days to run on its crowdfunded share sale.

Chief executive Ryan Kamins said his company is hoping to tap into the same vein of crowdfunding popularity that craft brewer ParrotDog and Zeffer Cider Co enjoyed with an offer of non-voting "investor shares" for investors who put in up to $149,999. Investments of $150,000 or more are entitled to ordinary shares.

The offer is for up to 17.8 percent of Riot Foods at 27 cents a share based on a valuation of $4.6 million. Non-voting shares are entitled to an equal share of dividends or distribution of surplus assets but can't vote on directors or any resolution other than might affect the rights attached to their shares. To date, existing shareholders have invested about $3.8 million.

The total raised would be as much as $1.3 million including a $300,000 equity investment made last November by an investor ahead of the PledgeMe campaign. Of that, $578,000 would go on working capital and almost $200,000 to set up its second plant, near Auckland International Airport.

The biggest shareholders of Riot Foods are Derrick and Jenny Kamins with 70.1 percent. Ryan Kamins has a direct interest in about 17 percent of the company and says Derrick, his father, is an experienced entrepreneur and adviser to the company as a member of the board.

According to the PledgeMe site, Riot Foods had sales of $1.4 million in 2017 and is forecasting revenue of $2.1 million in 2018. It expects to reach sales of $7.4 million and earnings before interest, tax, depreciation and amortisation of $121,000 in 2020.

The company has three business lines - its CleanPaleo brand of breakfast mixes, protein powders and biltong, its Poppy + Olive nut butters business, which Riot Foods acquired last year and its wholefoods manufacturing unit, which is a gluten- and dairy-free production facility. 

On Friday, Riot Foods said it has inked a deal that will see its biltong range sold in Australia via Coles, giving it 400 to 600 outlets across the Tasman. The first order through its distributor is for $70,000, it said. The company also has distribution through BP New Zealand petrol stations. The CleanPaleo brand is also stocked by the Countdown supermarket chain in New Zealand.


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