Deal review: Booktopia has nine-figure revenues, now it’s calling in the cost-cutting robots
Link copied to
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”.
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.
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;
Endorsement from these award bodies have affirmed Booktopia’s status as a leading Australian online retailer and as a high-growth business.
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.