Alcoholic tea purveyors Noveltea have escaped from the Dragons’ Den after turning down a raft of offers – but a surprise twist has served up a bright future for the Newcastle company
The firm’s co-founders and tea mixologists Vincent Efferoth and Lukas Passia appeared on the latest episode of the long-running BBC Two series in the hope of enticing investment for no more than 10% of the firm.
The duo, who originally come from Germany but based the business in the North East after studying at Newcastle University, have taken the beverage sector by storm as the first to cold-brew and infuse tea with a matching spirit. The company sells The Tale of Earl Grey, which is distilled with gin, the Tale of Tangier infused with rum and the Tale of Oolong, which is infused with Scotch whisky.
They served hot and cold tasters of Tale of Earl Grey and Tale of Tangier to Dragons Deborah Meaden, Peter Jones, Jenny Campbell, Tej Lalvani and Touker Suleyman, all of which went down well.
Their strategy was to offer 5% for £80,000, but Tej Lalvani proposed £80,000 for a 40% stake, while Jenny Campbell and Touker Suleyman countered with £80,000 for 39%.
After negotiation, the three Dragons agreed to join forces to offer £80,000 for 30%.
Mr Efferoth and Mr Passia’s strategy had been to cap the stake in Noveltea at 10%, however.
Eventually, after deftly answering all the Dragons’ questions and navigating their way through tense negotiations the duo decided to leave empty-handed – because three of the Dragons wanted too high a stake of the business for their cash.
Days after the episide was filmed in the summer, however, their decision was vindicated when they completed a crowdfunding campaign which raised a whopping £342,000 for roughly 9%. That gives the firm a valuation of around £3.8m.
Mr Efferoth said: “The most important thing for us was to stand our ground and not sell out.
“They said that having three Dragons on board would take it to another level and explained how it could make a difference. But we couldn’t give 30% away for such a low valuation for a product that has huge global sales potential. We are confident we have a great team and a good network to do it ourselves.
“So we are not disappointed, quite the contary actually. We are happy we did it because it was quite an experience and also it shows that three Dragons were interested in getting in.
“And afterwards we did the successful crowdfund which raised £342,000 for a much smaller share, and that proves we are on the right track.”
Mr Passia added: “We have strong plans and a lot to be thankful for – we benefit from a well established retail network so we’re actually far from disappointed and look forward to moving onwards and upwards.”
Source : Chroniclelive