Brisbane entrepreneur Steve Baxter this week invested $25,000 in a beer delivery startup that currently has just 50 customers.
Friday Beers delivers a different mixed six-pack of beers to subscribers every Friday afternoon for $28.80 per week, with no lock-in contracts.
The founders pitched the concept to investors on Network Ten program Shark Tank in an episode aired Wednesday night.
Baxter was initially sceptical, telling the Friday Beers team that the premise of operating only one day a week represented a “hole in their business plan”.
But he was won over by financial modelling suggesting Friday Beers could ultimately do 5000 deliveries on a Friday afternoon around Australia.
With a profit of $8 per delivery landed on someone’s desk, Baxter calculated the business could ultimately turn a weekly profit of around $50,000 and potentially $2.5 million a year.
“This actually becomes a very effective conduit for people wanting to promote their product, effectively to people who work in well-paying jobs in the inner city,” he said.
“You could potentially double that and turn it into quite a great business.”
Friday Beers currently operates only in central Brisbane and has to date completed 350 deliveries to a customer base of 50.
Baxter was nevertheless compelled by the concept enough to satisfy the founders’ request of a 10 per cent stake in the business for $25,000.