YFM invests £5m in Tonkotsu

YFM used both its British Smaller Companies VCT and VCT 2 funds for the investment. VCT typically invests £250,000-10m, while VCT 2 invests £1-10m in companies. The firm normally invests 60% from one fund and 40% from the other.

Investment director Mike Clarke told Unquote: "The key for the team is to maintain the individuality and authenticity around the business, so they're doing a measured roll-out with a handful of sites planned over the next couple of years." The firm is Tonkotsu's first institutional investor, though the company has previously taken out debt financing. 

Entrepreneur Sarah Willingham will join as chairman of the business and the company will open two more restaurants later this year: one in Peckham and one in Shoreditch.

The company generated sales of £6m in 2017, which increased to £7m in 2018.

Company
Founded in 2012, Tonkotsu currently operates nine ramen restaurants in London and one in Birmingham, up from seven locations in 2017. The restaurants produce their own noodles and ramen broth. Headquartered in London, the company employs 120 people.

People
YFM Equity Partners – Mike Clarke (investment director); Jamie Roberts (partner)
Tonkotsu – Stephen Evans (managing director); Emma Reynolds, Ken Yamada (co-founders).

Advisers
Equity – TLT, Jon Gill (legal); Stratton HR, Anna Cornwallis (operational due diligence); James Cowper Kreston, Phil Snell (tax); Price Bailey, Stephen Reed (financial due diligence).
Company – DSW, William Baxter (corporate finance); Grant Thornton (corporate finance); Field Fisher, Tim Bird (legal).

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• Topics
• Expansion
• UK / Ireland
• Consumer
• YFM Group
• Minority investing
• United Kingdom