Cake Box’s initial public offering (IPO) is set to see its founders gain £17 million, with none of the funds raised being reinvested into the business.
The egg-free desserts specialist will be worth around £43 million when it enters the Alternative Investments Market (AIM) next week.
Although the company, which has grown to 91 stores since its inception in 2008, is aiming to expand to 250 franchises it is understood that none of the initial funds raised will be put back into the business.
Instead its founders Sukh Chamdal and Pardip Dass will pocket £17 million.
“Our growth has been driven by the quality of our delicious fresh cream cakes and the attractive proposition we offer to our expanding number of franchisees,” Chamdal said.
“We are currently growing our franchise estate by two stores a month, with a significant number of potential locations for further new stores already identified.
“With no direct national competitor for egg-free, fresh cream, personalised cakes, Cake Box is well positioned to continue to expand its slice of the sizeable UK cake market both in stores and online.”
Revenues have grown 128 per cent in since 2016 and the company turned over £12.8 million in the year to March 2018, with the average franchise turning over £94,000 a year.