Three of London’s most acclaimed independent restaurants find themselves at very different stages of the same agonisingly complicated process: Asking their diners to finance their continued existence, at a time when spiralling costs are affecting business and customer alike.
Sonora, the London Fields taqueria; Ombra, the Cambridge Heath Italian restaurant; and Sarap, the Mayfair Filipino neo-bistro, are all bidding to evolve. Sonora co-founders Michelle Salazar de la Rocha and Sam Napier are opening a first restaurant in Stoke Newington; Ombra founder Mitshel Ibrahim is seeking a permanent home for Forno, the pastificio iteration of Ombra that thrived during the COVID-19 pandemic; and Sarap founder Budgie Montoya wants to progress from longterm residency to fully fledged restaurant with a site in Carnaby.
Montoya’s investment, yet to launch, is an equity crowdfund, which will give diners and investors shares in the future business, while Sonora and Ombra’s platform is Kickstarter, which gives rewards — from single meals to full venue hire — to backers. Forno’s bid runs until 25 December, with Sonora’s ending on 6 December; one of the terms of Kickstarter is an “all or nothing” clause whereby projects must be fully funded to receive the investment sought. Sonora is looking for £65,000; Ombra £60,000.
Crowdfunding is a familiar sight in the city, and pasta restaurant Bancone, which has sites in Soho and Covent Garden, is using the same route as Sarap in a bid to raise over £700,000 for expansion. It became popular for its low barriers to entry compared to traditional forms of investment, as well as the ability to monetise a captive, large fanbase in ways banks and angel investors (sometimes) do not recognise.
The last three years have only made those traditional routes tougher for restaurants. With financial relief from COVID-19 largely coming in the form of government-backed loans, and inflation pushing up interest rates, the cost of money via loans has risen; businesses are already laden with debt; and banks’s risk aversion to giving out those loans has risen accordingly. Taken together, these circumstances create a dilemma for restaurants, with reserves depleted by the pandemic and the opportunity to replenish them shrunk by inflation. For those in between businesses like Sonora and Sarap, it’s a stick-or-twist that looks more like raise the money, or close.
But the same financial forces are squeezing customers’s finances, too, making the comparative ease of crowdfunding stickier than it was before. The difference between these bids for expansion and the ability of international names like Harrods and Björn Frantzén; Richard Caring and Bacchanalia; and Raffles and Mauro Colagreco to plough ahead with grand openings in the city’s richest areas couldn’t be starker, and the chasm is only likely to widen in the coming months.