Hungryhouse Bounce Back after Dragons’ rejection
A company which gained but then lost investment on The Dragons’ Den has finally found investors prepared to invest in the business.
The founders of Hungryhouse.co.uk, a website that makes it easier to find local restaurants and order takeaways online, won £100,000 of backing from James Caan and Duncan Bannatyne in exchange for a 50% stake in the business.
However, the deal fell apart during the post-show due diligence and the Dragons walked away leaving founders Shane Lake and Tony Charles frustrated. But the publicity of appearing on theshow opened up opportunities with other backers and now the pair are pleased that the Dragons’ deal fell through.
“It was great when we were offered the backing we so desperately needed by the Dragons”, says Charles. The exposure of being on TV was massive for us too. But when you go into the Den, aside from the positives, the one thing you can’t expect is a good equity deal. On reflection, we’re glad the negotiations with the Dragons fell through; the new deal, £150,000 for a smaller equity stake – values the business at over three times what was agreed in the Den.”
The company’s private backers, Bryan O’Connell and Andrew Fuller, were among those watching that night, and liked the idea so much that they contacted hungryhouse with a view to funding the business.
O’Connell says: “We have experience in investing in similar website models, and we immediately felt that this idea had legs. On meeting Shane and Tony, we were particularly impressed with their passion for the business. The team had achieved so much with so little that it was clear that our £150,000 would have a big impact on the growth. We didn’t get the equity deal obtained in the Den, but then the business has grown significantly over the last 5 months – and of course we aren’t the Dragons.”
Crimson Business Ltd. 2008