Brompton secures £19 million investment and will use money to 'be more ambitious'
Brompton, the iconic British folding bike company, has secured £19 million in investment from BGF.
Announced on Tuesday morning, the deal sees BGF, formerly known as the Business Growth Fund, take a minority stake in Brompton. The press release states that the company will remain independent, however, "owned by the founder Andrew Ritchie, the current CEO Will Butler-Adams, their friends, family, and its staff".
Butler-Adams said that Brompton - which makes one of the best folding bikes on the market - needed to "strengthen our balance sheet to give us the confidence to be more ambitious".
“Over the last two decades, Brompton has grown organically at circa 20% a year, funded by reinvesting our profits," he said. "For the year ended March 2023, turnover grew 21% to £130m, supported by the launch of the Superlight T Line and Electric P Line products.
"We export 80% of our bikes to 46 countries, and in November 2022 made our one-millionth bike, a great achievement. But this is not enough, we need to move faster. The impact of climate change is being felt by us all and the greatest carbon emissions come from our cities where most of the world’s population now lives.
“Our team at Brompton are brimming with ideas to accelerate our growth through product innovation, storytelling, outstanding stores and having fun with our amazing community. But if we are really going to go for it, we need to strengthen our balance sheet to give us the confidence to be more ambitious.”
The bike manufacturer's accounts, published on Companies House earlier this year, show that turnover increased 40% to £106.9m ($128.7m) in the year up to 31 March 2022, up from £76.1m ($91.6m)
However, pre-tax profits fell 28% to £7.1m ($8.5m) from £9.7m ($11.7m).
According to its report, this was down to a several factors, including a massive increase in funding for research and development, higher staffing costs, and rising costs associated with supply chain delays and manufacturing, as well as inflation.
Daina Spedding, an investor at BGF, said that there was "clear synergy" between her fund and Brompton.
“We are incredibly excited to be backing an iconic British brand that is rich in heritage and engineering prowess, with an outstanding track record of profitable, global growth," she said. "From the outset, there has been a clear synergy between Brompton and BGF, with shared long-term goals and a focus on sustainable growth that is good for both people and planet.
"We look forward to supporting the business as it continues to expand into new markets and invest in new technologies and manufacturing capabilities to meet ever-growing demand for its revolutionary cycling range.”