Third time lucky as Booktopia completes $20m capital raising
6 February 2020, Written by David Simmons
Following a failed IPO four years ago and a recent $10 million crowdfunding attempt that fell well short, online book retailer Booktopia has finally secured the capital needed to fund future growth.
The Australian-owned company has today announced it completed a $20 million capital raising from a consortium of private investors.
The money raised will be put toward enhancing capacity and efficiency at its Sydney distribution centre, investment in automation to scale its inbound and outbound capacity and working capital.
The equity was raised from a consortium of private investors led by Su-Ming Wong, co-founder & CEO of Champ Ventures (who will join the board of Booktopia) and John Sampson, founder & CEO of JBS Investments.
The founding shareholders retain majority control and Booktopia will continue to be an independent Australian-owned business.
Booktopia CEO Tony Nash (pictured) says the capital raise will allow the company to continue growing.
"Booktopia has come so far and the team is rightly proud to have built this 100 per cent Australian owned business to scale from within our own internal resources," says Nash.
"The funding will allow us to accelerate our growth in a controlled and measured way by investing in our ability to deliver to Australian book consumers through expanded distribution infrastructure and stock. This has been a proven high growth and predictable model for us for 16 years and we are now about to change. We know that's what our customers want from us."
The $20 million in capital raising is entirely separate from its recent acquisition of the University Co-operative Bookshops according to Nash.
"We were already very well advanced with our private investors before The Co-op went into administration and as Tertiary Academic Sales were already a significant portion of our revenue it was deemed that if the numbers worked then we would purchase it from within our own financial capacity," says Nash.
The $20 million capital raise is welcome reprieve for Booktopia after the company fell on its face during a failed crowdfunding attempt in 2019.
The proposed $10 million crowdfunding capital raise on equity crowdfunding platform Equitise was heralded as Australia's largest-ever of its kind.
The raise was pulled three days before it expired, failing to even reach its minimum target of $3 million, and only raising $892,750.
The decision to stop accepting investment on the equity crowdfunding platform was made by the Booktopia Board with the business deciding to re-engage and continue discussions with growth funds, high net worth individuals and family offices.
Business News Australia
Author: David Simmons