HopCat in downtown Grand Rapids ranks as one of the top beer bars in both the world and nation. Photo by Adam Bird
A bar chain with millions in fresh capital is speeding up its nationwide expansion.
World-renowned beer bar HopCat has received an injection of $25 million from an unnamed Texas-based investor, BarFly Ventures spokesperson Chris Knape said today. The deal closed last week.
The Texas lender received a small equity share in BarFly with the investment. Sellers is still the majority owner of the company.
The deal will help Grand Rapids-based BarFly — the parent company of the growing HopCat chain, which started in Grand Rapids in 2008 — open 30 HopCat locations in the next five years.
The influx in cash will allow BarFly to open six locations a year, starting in 2016, Knape said. The goal is to focus on Midwest college towns.
Five HopCats will have opened in the last 14 months when the Lexington, Ky. location opens this fall.
“This is a good opportunity to grow and create jobs,” Knape said. “We’ve picked up the pace, but it feels comfortable.”
Reports have surfaced that Louisville, Ky. is the next location. The second Kentucky location hasn’t been confirmed, but Knape said the chain does like that market.
Funding to further concept
The search for capital was initiated, because BarFly saw the HopCat concept worked in markets outside of Grand Rapids, such as East Lansing and Ann Arbor. The chain’s other locations include Indianapolis, Madison, Wis. and Detroit.
Knape said the seven locations have all been able to “avoid feeling like a big chain” and maintain the “heart and soul” of the original HopCat on Ionia Avenue in downtown Grand Rapids.
BarFly’s investment bank, Southfield-based Cascade Partners, put out the feelers earlier this year and received a lot of interest.
“There was a tremendous amount of interest from across the country,” Knape said.
Preparing for expansion
Knape added that BarFly recently moved into a new office in Grand Rapids at Blue35, at 35 Oakes St. SW, to accommodate the company’s growth and remain in the Heartside neighborhood and in walking distance of the company’s downtown establishments.
In January, Sellers told the Business Journal of his plans for expansion, including the recent hirings of a managing partner, CFO, human resources director and a “beefing up” of the graphics department.
BarFly employs about 1,000 people and often looks to promote from within.
Sellers told the Business Journal that BarFly spent 2014 preparing for this upcoming growth.
“We spent the entire year preparing for the expansion,” Sellers said. “We re-did a lot of the internal workings. We hired a lot of new people in advance of the growth.”
Each new HopCat location averages about $3 million. Sellers expected about $41 million in annual sales for BarFly, including its other establishments in Grand Rapids, Grand Rapids Brewing Co., McFadden’s Restaurant & Saloon and Stella’s Lounge.