Boulder-based Spark Grills Inc. closed nearly $7 million out of a $12.5 million equity raise in February as it prepares to expand its manufacturing capacity in Boulder.
The first part of the raise gave the company a little more runway, and it plans to close the remaining capital funding hopefully before the end of the second quarter, said CEO Ben West. The infusion of cash also means the company will probably be expanding its headcount by around 50%, he said.
The company produces smart charcoal grills and the associated fuel, and ships them out to customers across the U.S. The proceeds from its latest fundraising efforts will primarily be used to accelerate growth, West said.
“It’s a pretty cool time for us,” West said. “We got out to market about 18 months ago, and we learned a lot.”
While a lot of people are interested in charcoal grilling, many find it an intimidating practice to pick up, West said. That’s where his company comes in. Alongside the grill itself, Spark produces its own charcoal fuel bricks, or "Briqs," which it formulates to burn at different temperature ranges and durations. Software in the grill fine-tunes how it runs, and a connection to the company’s app lets users monitor food and grill temperatures remotely.
“We’re really overhauling the grill industry, we think,” West said.
The company's growth will come in a few key areas, he said.
For one, the company is looking to scale up its fuel manufacturing operations. Previously, the company had been proving out the abilities of that arm of the business, but now it’s ready to ramp up operations at the Boulder facility.
The company previously had a 20,000-square-foot facility where it handled all of its warehousing, order fulfillment and fuel production. It has doubled that footprint in order to ramp up the fuel production start of the business.
“Right now we’re really proving out production capacity in a very high-quality, high-throughput manner,” West said. “I think we’ve proven the prototype stage, and we’re scaling up the prototype stage here now.”
Eventually, the company would look to establish other manufacturing facilities closer to the sources of hardwood that feed the fuel production, but that step is further down the road. Potential sites for that kind of expansion might lie in Northern Mexico or Missouri, West said.
“We’ve done the prototype stage earlier on with previous investments, the current investment would be to scale what we’ve proven, and then we would replicate that,” West said.
The latest set of new funds will also go toward a lot more inventory investments and accelerated product development, West said.
Spark Grills employs about 25 people now, and it will probably look to add another 10 to 15 more with this raise, West said. Five to 10 of those will likely come in the next few months, with further growth extending beyond that timeframe.
The company was originally founded in San Fransisco, but West moved it to Boulder a little over three years ago to get access to the local food innovation scene.
“I call it the Silicon-Valley-for-food scene,” West said. “There are a lot of food startups here.”
West also anticipated that it would be easier to secure manufacturing space in the area than in San Fransisco. On top of that, Denver seemed like potentially a solid customer market for the company.
