GRAND RAPIDS — BarFly Ventures LLC, the parent company that operates the growing HopCat craft beer bar chain, has secured a new $5 million investment to further its expansion in the Midwest, MiBiz has learned.
Additionally, HopCat also appears poised to open a sixth site in Michigan with the addition of a new bar and restaurant in suburban Detroit.
In confirming the company’s latest round of fundraising, Chris Knape, BarFly’s vice president of marketing and communications, said the funding comes from a total of five individuals, including new investors and some who chose to reinvest.
“We see the investment as a sign that this expansion is going well,” Knape told MiBiz. “There are people that are willing to reinvest to continue the positive trajectory.”
The addition of $5 million in capital is intended to support the opening of three to four new HopCat locations in and around the Midwest for the “foreseeable future,” he said.
Knape said the most recent capital infusion should get the company through its planned 2017 expansions. Each location typically requires between $2 million and $5 million to launch, Knape added, noting that startup costs vary widely depending on the site.
As MiBiz reported last September, the company received $25 million in mezzanine financing from two Texas companies, Congruent Investment Partners and Main Street Capital Corp.
HopCat operates pubs in Grand Rapids, East Lansing, Detroit, and Ann Arbor in Michigan, as well as in Indianapolis, Ind.; Madison, Wis.; Lexington, Ky.; and Lincoln, Neb.
In Grand Rapids, BarFly also operates Grand Rapids Brewing Co., Stella’s Lounge and The Waldron Public House, which recently shut down as a pub to focus on private events.
The company planned to open its Chicago HopCat location on Sept. 3 — after this report went to press — and it expects to open another on Oct. 8 in downtown Kalamazoo. A HopCat location in Kansas City is planned for a grand opening later this year.
Aside from its previously announced plans, the company was not prepared to discuss where it targeted other new HopCat expansions, according to Knape.
However, a review of state documents shows an entity registered to BarFly Ventures founder Mark Sellers III filed paperwork on Aug. 1 with the Michigan Liquor Control Commission to transfer a liquor license at 208 W. 5th Ave. in Royal Oak from current owner KSK Hospitality Group Inc. to HopCat-Royal Oak LLC.
Knape would neither confirm or deny that BarFly was eyeing Royal Oak for a possible HopCat location.
KSK does business as Onyx Bar and Grill and Woody’s Diner. The liquor license transfer had yet to receive approval from the MLCC at the time this report went to press.
Additionally, Sellers is the registered agent for various HopCat business entities tied to cities including Pittsburgh, Cleveland, Cincinnati and Nashville.
Knape said BarFly wouldn’t rule out other sites, but noted the company generally considers the Midwest as its base of operations.
“We’re very selective about locations,” Knape said. “We tend to look at historic rehab projects other chains wouldn’t touch.”