Information on the Target

5 to go is the largest coffee shop chain in Eastern Europe and the leading franchise in Romania, recently achieving a landmark of over 600 locations. Established in 2015 by co-founders Radu Savopol and Lucian Bădilă, the company has rapidly positioned itself as a staple in the Romanian HoReCa market through its distinctive business model, which features a single pricing strategy for all its offerings. With a presence across 130 cities and over 300 franchises, 5 to go has built a loyal customer base thanks to its quality coffee and welcoming atmosphere, encapsulated in the slogan “Smile, there’s coffee!”.

Industry Overview in Romania

The coffee shop industry in Romania has experienced significant growth in recent years, driven by rising consumer preferences for specialty coffee and café culture. As the demand for high-quality coffee continues to expand, both domestic and international brands are entering the market, leading to increased competition. This presents ample opportunities for innovative concepts like 5 to go to thrive.

Romania's coffee market is characterized by a youthful demographic that values convenience, quality, and social experiences in their coffee-drinking habits. The rise of the 'on-the-go' coffee trend has resulted in a greater emphasis on quick service and accessibility, factors that 5 to go has effectively capitalized on through its expansive franchise network.

Furthermore, the pandemic has accelerated coffee consumption at home, but as health restrictions ease, a rebound is expected as consumers return to social settings. Coffee shops have adapted by enhancing their retail offerings and creating more engaging customer experiences, which bodes well for future growth in the sector.

In conjunction with its rapid expansion, 5 to go is strategically positioning itself to tap into other regions, especially South-East Europe and areas with a significant Romanian diaspora, thereby further solidifying its market presence.

The Rationale Behind the Deal

The strategic partnership between 5 to go and investor groups INVENIO Partners and Accession Capital Partners (ACP) aims to facilitate the coffee chain's growth beyond Romania. This investment allows 5 to go to leverage the experience and resources of its new partners, focusing on both domestic and international expansion to meet the growing consumer demand.

With a proven track record of meeting growth targets—including surpassing its 2024 budget by 10%—the company is poised for sustained development. The collaboration sets the stage for 5 to go to reach its goal of 1,000 locations in Romania and establish a stronger foothold in the European coffee market.

Information About the Investor

INVENIO Partners manages two private equity and growth equity funds, including a focus on investments in South East Europe. They have established a reputation for supporting companies in realizing their potential through growth capital and operational guidance. Recent partnerships also highlight INVENIO's commitment to elevating strong companies in high-potential markets like Romania.

Accession Capital Partners (ACP), formerly known as Mezzanine Management, has maintained an active presence in Central and Eastern Europe since 2000, raising over €1.1 billion across its dedicated growth capital funds. The firm is backed by notable institutional investors, allowing ACP to provide crucial support for promising businesses as they navigate competitive landscapes.

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The investment by INVENIO Partners and ACP in 5 to go represents a strategic opportunity with considerable upside. The coffee shop chain's unique model and established brand in Romania position it well for expansion, particularly in regions with strong Romanian communities. The demand for specialty coffee and café experiences is projected to remain robust, presenting a favorable environment for innovative brands like 5 to go.

Moreover, as the leaders of the company remain involved in operations, the foundational vision of 5 to go is likely to be preserved while being enhanced through the new investors’ guidance. This continuity can foster customer loyalty and expand the brand's reach effectively.

In conclusion, while this partnership brings with it the challenges of scaling operations and entering new markets, the potential for growth is significant. The combination of seasoned investors, a proven business model, and the cultural appetite for coffee experience in Romania and beyond makes this a compelling investment opportunity.

Overall, given the solid infrastructure and established market presence already achieved by 5 to go, the strategic investment is likely to yield positive outcomes and drive the brand towards becoming a leading player in the European coffee industry.

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