Hot chocolate brand Knoops has marked another milestone on its path to rapid expansion after the firm secured an £8.3 million cash injection allowing it to double its store estate, the Standard can reveal.
The firm, which sells 20 different varieties of hot chocolate and has sites in Knightsbridge, Covent Garden and Notting Hill, plans to open new venues in Canary Wharf, Battersea Power Station and Hampstead to take its total number of stores to 40. Knoops’ long-term plan is to open 200 sites in the UK and hundreds more overseas, with markets in Asia seen as a key target for growth.
South London-based department store Morley’s was lead investor for the funding, with the firm committing £5.5 million and director John Egan taking a seat on the board. It follows a £5 million debt raise earlier this year.
Egan said: “Our significant investment in Knoops is part of the group’s diversification away from the core department store business. We are delighted and excited to be part of the Knoops journey, and see the business creating a new category in the hot drinks market.”
Knoops was founded by German entrepreneur Jens Knoop who opened his first store in East Sussex in 2013. The firm began its speedy expansion in 2019 after serial investor William Gordon-Harris committed funding to the business and later became its CEO.
Knoops funding "aligns with our strategy to begin the international aspects of our ambition and follow our plan to create the new Starbucks for quality barista hot and cold chocolate drinks," Gordon-Harris said.
“We are delighted to have accepted a few limited new investors into the company, where they add industry and other strategic benefits.”
Knoops’ larger high street rival Hotel Chocolat was bought by confectionary giant Mars earlier this month in a £534 million deal, in signs investors are eyeing major growth potential in the chocolate-making market.
According to investor documents seen by the Standard, Knoops is now eyeing as many as 200 stores in the UK and believes it “has the ability” to emulate the rapid growth model of US chain Starbucks, by expanding to 3,000 stores worldwide by 2030 with an annual turnover topping £3 billion.
Knoops founder Jens Knoop said the café chain’s later opening times – its Covent Garden site is open till 10:30pm on weeknights – was helping it attract a wider customer base that conventional coffee shops were missing out on.
“We are getting the post-theatre crowd or the after-restaurant crowd who want a hot chocolate on a chilly night,” he said.
“There is an appetite for something new -- this is about adding something to the culinary scene...we’re offering comfort, escapism and something for everybody.”
