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Online furniture retailer Temple & Webster (ASX: TPW) will raise $40 million to capitalise on strong sales growth in June.
Proceeds of the placement will be deployed towards strategic growth initiatives to take advantage of a consumer shift to online shopping that has been accelerated by the COVID-19 pandemic.
Further, the company plans on enhancing its digital storefront and strengthening its product and service offering with the funds.
One of these plans is for Temple & Webster to invest in an offshore startup that is developing AI interior design tools.
Part of Temple & Webster's planned investment in the startup involves entering into a long-term commercial agreement with that company to bring the AI tools to the Australian market.
The placement will be conducted at an offer price of $5.70 per share, representing a 9.7 per cent discount to the last close price, and will result in approximately 7 million new shares being issued.
Read more: Temple & Webster revenue nearly doubles during COVID-19 restrictions
It comes as the e-commerce group recorded growth sales growth of 130 per cent in June 2020, with the company expecting full year EBITDA of more than $8 million.
The company's YTD revenue is up 68 per cent to $151.7 million, with $29.2 million in cash on hand at 31 May.
"We remain very excited about the position of Temple & Webster and our unique opportunity to capitalise on the structural shift from offline to online for furniture and homewares," says Temple & Webster CEO mark Coulter.
"With the recent acceleration in this trend, we think it is financially prudent for the Company to strengthen its balance sheet to provide us with the flexibility to make additional investment into our growth, including our technology and product and service offering."
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