BGF backs Mexican street food chain and budget gym chain with £5.6m follow-on funding
Investments into Barburrito and Xercise4Less to back further growth for fast-growing companies
The Business Growth Fund (BGF), the independent investment company backed by five of the UK’s high street banks, today announced follow-on investments totalling £5.6m into Mexican street food business Barburrito and low-cost gym chain Xercise4Less.
Barburrito, which was backed with £3.6m of BGF funding, was founded in 2005 by Morgan Davies and Paul Kilpatrick as a street food-themed Mexican restaurant chain.
It was originally the first enterprise in north-west England to receive backing from BGF when the business was backed by initial funding of £3.25m in 2012.
Since then the chain has opened a series of restaurants across the UK and now has 11 sites across Manchester, London, Liverpool, Leeds and Nottingham, with a current net sales run rate of more than £8m.
Morgan Davies, managing director and co-founder of Barburrito, said: “We started this great burrito race in the UK and as I have always said, this is more than a business…it’s a passion.
“The further funding provided by BGF is a great step forward for our business. It offers us a vote of confidence and most importantly, the funds with which to continue to take the business forward.”
Low-cost gym chain Xercise4Less received £2m of follow-on funding from BGF.
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Founded in 2006 by Jon Wright, the budget gym operator received its first round of BGF backing in September 2013 following a strong year of growth for the business.
Following the investment the business has continued to perform strongly, and is now on track to open a further 11 sites across the UK this year, taking its total to 29.
BGF said it will still retain a minority stake in both businesses following this latest round of investment.
John Swarbrick, head of portfolio at BGF, said: “We are an investor of just three years standing and the majority of our investments are still less than 18 months old.
“However, we are already seeing many encouraging signs of growth across the portfolio of companies that we have backed.
“This sort of sustained growth often requires the provision of further funding and the ability to provide this forms a critical element of BGF’s offer.”