Online book retailer Booktopia has established a leading presence in the Australian market, with years of double-digit revenue growth under its belt and a returning customer base of almost 2 million people.

Now, it wants to automate.

And in order to raise the necessary capital, it’s turned to the crowd. The company is looking to raise anywhere from $3-$10 million on the Equitise crowdfunding platform, most of which it says will be spent on building out further automation capabilities at its distribution centre in order to “increase efficiency and reduce required man hours per unit shipped”.

Valuation

Booktopia is offering Equitise investors the opportunity to buy in interest in the company via the issuance of fully-paid ordinary shares at a price of $1 per share.

Prior to the raise, the company had 113,470,527 shares outstanding at $1, giving it an implied pre-money valuation of $113m. The company will issue a further 3 to 10 million shares through the Equitise platform, depending on demand. The minimum investment is 250 shares ($250).

According to data on the Equitise website, Booktopia shipped over 4.7 million items in the 2018 financial year.

The company’s revenue has grown from $9.4 million in 2009 to $113.9 million in FY2018, and of the 5.2 million customers who bought a product from Booktopia group, 1.8 million are repeat customers – a retention rate of around 35 per cent.

The company incurred product and freight cost of $82.547 million, and booked a net profit before tax of $1.911 million – a net profit ratio of 0.17 per cent.

Company background

Originally founded in 2004, Booktopia has established itself as one of the leading success stories among online merchants in the Australian marketplace.

The group has been awarded a significant number of industry accolades. Some of these awards and accreditations include;

  • NSW Business of the Year in 2018
  • Australian Business of the Year in 2018 for the People’s Choice Award
  • New South Wales Medium Sized Business Award in 2014 (and a finalist from 2011- 2018 seven times)
  • Listed in the AFR/BRW Fast 100 eight times between 2009 and 2017

Endorsement from these award bodies have affirmed Booktopia’s status as a leading Australian online retailer and as a high-growth business.

Conclusion

The Booktopia crowdfunding raise gives investors an opportunity to help finance the company’s push towards more automated business practices.

If the company meets its minimum $3 million target, $2m of that will go towards capital costs associated with automating its distribution centre. If it hits the maximum $10m target, the company plans to spend $5m on automation and a further $3 million on increasing book inventories.

With a 15-year history and annual revenues already in excess of $100 million, Booktopia is one of the more mature companies to turn to crowdfunding as a means to raise capital.

Its push for automation shows the importance of technological advancements in the competitive world of online sales, particularly with the recent entry of global giant Amazon into the domestic market.

If you have a private deal you think we should know about, get in touch with us at [email protected]
The content of this article was not selected, modified or otherwise controlled by Stockhead. Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

 

 

Former fund manager and finance academic, Dr Nigel Finch advises growing business on strategy execution, corporate governance and capital raisings. He has worked across all stages of the business cycle from start-ups to seasoned ASX-listed companies including many who have tackled Asia’s emerging markets. Authoring more than 5 books and 100 scholarly articles, Dr Finch has a thing or two to say about business.