Monday, 11 December 2017

Zing Zang baby.



Ok so the picture is a joke - right - dont get all PC on me. The latest ECF news is that Zing Zing, the Chinese takeaway, have already, after only 2 days on Crowdcube, blasted their £500k target.

This is Zing Zing's second Cubism. They raised an astonishing £1.7m last year against a target of just £350k. 

Since then the rice has taken longer to steam than they thought - even with five times the capital base. But hell, come in well under budget and you can still hike your price on the Cube and no one will bother to question it. Apparently they hadnt allowed for the fall in the £ and subsequent price hikes in their COGS. Do they know that Brexit has only just begun and has a minimum of 2 years to go, without any idea what it will look like eventually?

4 units are up and running but two are new and the other two have not reached maturity yet - so some way to go to get the recipe right. 3 new openings planned in London for 2018, with whatever recipe is on hand. Units are certainly cheaper than most to get going so that is a plus. Reviews of existing outlets are generally good but they are not sensational. Shouldn't they be? 

Our guess - plenty of dilution heading the way of investors, eased by fictional growth in values. Just may get some real traction or enough to be a target for purchase. ROI, well that depends on the above - high risk but rewards are good if you like Chinese. 

Whoever made up investment rules needs to rewrite them.

2 comments:

  1. as much as the branding is on point, im a little disappointed by the numbers. you could argue that the business has had some set-back as a result of brexit. however, there is still scope for potential as the take-away market is quite a robust sector. the fact they have overfunded either means there are investors who really believe that they will get a decent return or a fool and his money are easily parted.

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  2. As a frequent reader and big fan of your blog and an investor in 7 business on Crowdcube over the last 4 years, I am always very keen to see if businesses that I have invested in appear on your blog (then slump in my chair if they do). Thankfully they rarely appear and I have dodged many bullets.
    I did invest a large sum in Zing Zing the first time and have once again gone into Zing Zing in this 2nd round of funding. In fairness to Zing Zing, the number and the spiel behind why the numbers haven't hit targets do add up. The rapid emergence of Uber Eats and Deliveroo over the last 18 months have impacted the market hugely but I do feel that Zing Zing has adapted well. Not only are they prominent on Deliveroo but they have also released another brand (Zing Green) onto Deliveroo. The further sub-brands (many more in the pipeline) are able to operate from the same shops as the Zing Zing brand itself but give them twice as much presence without the double costs. The major costs are understandably head office but ZZ are sitting in a very solid place with the numbers coming out of their stores. From here every store will see the overall profit margin increase as costs from head office increase only marginally in relation. The strategy behind the rollout looks solid and will also save costs as locations overlap to save on delivery costs.
    Reviews should always be taken with a pinch of salt as on the whole, especially with takeaway restaurants, people tend to only leave a review when things have gone wrong. Their deliveroo feedback is good. In Kensal Rise, for example, where one of their stores is, they have a Deliveroo rating of 92% (ZZ Green) and 86% (Zing Zing) compared with 63% of the only other 'Chinese' option.
    Unlike many other businesses that appear onto Crowdcube, I do feel Zing Zing are in particuarly good shape as they prepare to roll out their next stores. have We shall see!

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