At the start of last year, James Watt, co-founder of BrewDog (with the sensibly more publicity-shy Martin Dickie), announced he was launching House of Unicorns, a reality show for start-ups with a £2m investment prize. It would be like Dragons’ Den, but for entrepreneurs identifying as punks.
On his LinkedIn page Watt self-identifies as ‘investor – entrepreneur – punk’, but he knows what it takes to create a unicorn too. When TSG Consumer Partners invested £213m in BrewDog in 2017, it valued the brewery and bar business at £895m, making it a dollar unicorn. Watt made £52m out of that transaction.
Last month Tilray Brands, from the US, acquired the BrewDog brands, its brewing facilities and 11 of its 49 UK pubs for just £33m, following a process run by AlixPartners. The 484 employees of the 38 bars that were closed, heard they were being fired on a 15-minute Zoom call (with BrewDog CEO James Taylor and AlixPartners). Staff were on mute, so had no chance to ask questions.
Nasdaq-listed Tilray’s main operations are in pharmaceutical cannabis, but it owns other brewers. This deal can be seen as a horizontal integration in more ways than one. BrewDog’s results, meanwhile, haven’t managed a plateau in years; it posted five consecutive years of losses up to its most recent announcement in 2024.
Once the poster child for crowdfunding, its Equity for Punks campaign, which Watt claimed thumbed a nose at the City and its rules and regulations, raised more than £75m from retail investors between 2009 and 2021.
Thanks to their loss of pre-emption rights as part of the TSG deal, those retail investors won’t receive a penny from BrewDog’s sale. I hate to say we told you so, but we really did. A Corporate Financier feature on BrewDog in April 2012, when it had raised just £3m from punk retail investors, ended by saying we hoped those investors would not be left feeling cheated.
At a time when we really want to change the culture around UK households investing in UK businesses, this is not a good look. The BrewDog saga should definitely act as a warning against completely loosening regulations. For Watt, you feel there may be more money to be made yet – Netflix and co would surely lap up Two Halves Don’t Always Make a Pint: The BrewDog Boom and Bust – but he’s strangely media-shy at present.
Marc Mullen
Editor
