‘Keeping founders poor doesn’t help anyone’

David Abrahamovitch averages four cups of coffee a day; a fitting dedication to caffeine as the founder of Grind (and the father of two young children). But, he confesses, he wasn’t always a coffee aficionado. The first Grind café, opened in 2011, came about after Abrahamovitch, then aged 25, inherited his father’s mobile phone shop on London’s Shoreditch roundabout.

On the advice of a friend, he transformed the phone shop — where he’d once worked as a teen — into a Melbourne-style café. It was a success, but real growth came a decade later, when Grind launched online sales of pods and beans during Covid.

Today, despite having 13 cafés — including its newest branch in Dubai airport — online sales make up the lion’s share of the company’s revenue.

The business was last valued at £150mn, with annual revenue at £30mn for the 2023-24 year. It employs 350 staff.

“A lot of people get into coffee because they love coffee,” Abrahamovitch says. “I got into coffee because I had a building.”

You grew up on the outskirts of east London. What was your family background like?
My parents didn’t come from much at all, but both were smart and worked hard. In their generation, that was enough.

My mum was in the corporate world, and gave us stability. She was paying the mortgage and the school fees. My private education was amazing — it was cool to be clever there.

My dad was a classic entrepreneur, setting up shops across different industries. It was very much feast and famine, but it looked more fun than going to an office. My sister is also an entrepreneur now [running Dusk, the bar drinks app], so there’s a clear influence.

By the time I was born, my dad had moved into mobile phone repairs, spotting that it was going to become a big thing. From the age of 12, I would work all summer in the repair shop. I watched how to do sales calls, account management and customer engagement. I learned more from that about running a business than I did from my economics degree. I actually worked full-time during my final university year for a dispute resolution tech start-up, initially backed by [venture capital firm] Balderton.

I also did a few summer banking internships during my degree, but I knew immediately I had no interest in it as a career.

What inspired the first Grind store and how did you finance it?
When dad died, I had to figure out what to do with the shop he’d left behind on Shoreditch roundabout. It was a long-term lease, and the rent was £8,000 a quarter. My mum paid the rent for a few quarters, and I got a small amount from selling off the customer base. The shop had been wasted as a mobile store — the area had really transformed and my dad had always talked about changing it. When I mentioned it to my friend Kaz, from Melbourne, he said: “Let me put some money in. Let’s do a café with proper coffee.”

I didn’t have enough money to fit out the first one. I thought we would be doing it for £50,000 and it ended up costing nearly £200,000 because we had to do so much to make it commercial. I magicked a quarter of it up myself from credit cards and stocks. The rest we really had to beg, borrow and steal. I remember filling out business bank pages to borrow £20,000 for coffee machines and ended up having to agree personal guarantees. We even did some of the work ourselves, such as sanding down the stools — it was the first and the last time I’ve done any DIY. 

I called my mum the night before opening to ask for a few hundred pounds for the float. She literally came with a bank bag of £400 or £500 in five, 10 and 20 pence coins. That £500 really was the last of what we had. We budgeted for a loss in the few months, but, luckily, people came in. The flat white caught on. 

For the first few years, I couldn’t afford to go full-time at Grind. I stayed working full-time at the Balderton-backed tech start-up. It nearly killed me getting the first one open. Then in January 2014, we raised £1mn. At that point, I thought I owed it to the investors to go all in. Plus, by then, we were making £15,000 a week, helped further once we got our late licence and could serve espresso martinis after 5pm. 

When did the business really take off?
In 2019, after we did a £3.5mn crowdfunding raise, we invested in building out a new direct-to-consumer arm. I wanted to make high-quality coffee pods without the sustainability issues, and we launched that in January 2020. 

I thought maybe the new website could generate one store’s worth of revenue. But by April, during lockdown, we were doing crazy numbers. One minute I was telling all the staff they had to go home. Then my phone was exploding with Shopify notifications. We had £2mn in our account earmarked for two sites in Canary Wharf and the South Bank, but ended up putting it all into the direct-to-consumer part of the business.

We didn’t even have all the stuff we needed, but I was just like: “Do not stop, no one touch that website. I don’t care if we don’t have the stock. We’ll figure it out.”

There were moments when I thought we would lose the business completely because of Covid. It was crazy to go from that in March 2020 to 18 months later, the business being worth way more.

It was only after that point that Grind became a cohesive brand. Beforehand, it had just been Soho Grind or Shoreditch Grind and so on. We became a different entity [Kaz James was a co-founder for the first physical stores, but Abrahamovitch is the sole founder of the broader Grind entity].

What was Grind’s approach to cracking such a competitive sector?
We knew from the start we didn’t want any other coffee brands sold at our cafés. A roaster took pity on us and was like, sure, I’ll give you 20 bags a week of your own white label blend!

In terms of flavour profile, we haven’t really changed much since. If you go to speciality grocery stores and get an espresso, it’ll be quite flowery and delicate. And coffee guys like that. But the reality is 95 per cent of the coffees we’re selling are flat whites and cappuccinos. And that [type of] coffee doesn’t work that well with milk. So it was about having something where you can still really taste the coffee coming through the milk, with a little bit of chocolate and nuts — that little bit of natural sweetness. Italians think their way is the best, with their dark, fast, $1 espressos. I love Italians’ obsession with food and drink, but I don’t necessarily agree.

How do you manage your personal finances now?
The direct-to-consumer boom prompted us to bring in a big investor [Richard Koch, who co-founded LEK Consulting]. Since then, I’ve sold down my stake a little in various rounds to de-risk a bit. That’s allowed me to buy an amazing house and all the stuff that comes with having two kids. 

Apart from my house, the vast majority of my money is invested in exchange traded funds, stocks and a pension. I also have seven or so angel investments. I mostly back founders I know.

On paper, 80 per cent of my wealth is still in the business. I think I’ll grow it faster there than in the stock market. But equally, I’ve got two kids and I want to make sure that if, for some reason I’m no longer here, there’s plenty to pay the school fees and have a nice life. Although my wife [Victoria Beckham’s make-up artist] is successful in her own right.

I subscribe to the American attitude that keeping founders poor doesn’t help anyone. They’re just more stressed about the day-to-day and won’t want to take risks in the same way. My lead investor has been super supportive in terms of allowing me to take money off the table.

What do you spend money on?
My main splurge now is definitely holidays. I’m never going to be able to travel with a three- and a four-year-old again. Plus, they won’t want to go on holiday with me in another 10 years probably. When it comes to material things, it’s as everyone says — as soon as you can afford the stuff, you no longer want it.