Yet another technology company is floating on the ASX this week, taking advantage of a hungry market that just can’t get enough of the sector.
Shares for e-commerce site MyDeal.com.au Limited (ASX: MYD) will start trading on Thursday.
Founder and chief executive, Sean Senvirtne, told The Motley Fool it was a long journey to reach this milestone.
“The business is almost a decade in the making,” he said.
“We managed to build an e-commerce site with excess of $100 million of sales with very minimal capital raising to date.”
He’s right — MyDeal had only raised $5.1 million in equity funding before the initial public offer.
Tony Gandel, who is the son of AFR Rich List real estate developer, John Gandel, put in $5 million back in 2017 through his investment vehicle, Gandel Invest.
Now, in just 3 years, that will turn into $51.4 million as the company lists on the ASX.
Senvirtne and his partner will own 49% of the shares upon the float, worth $126.9 million.
Remember group buying?
Remember when ‘group buying’ was all the rage and it was meant to be the next dominant shopping trend? MyDeal started off in 2011 as a group buying site but has since pivoted several times to find its groove.
It had some good years selling pretty much everything but these days it’s focused on furniture and homewares.
The current model is that MyDeal acts as a pure marketplace between sellers and buyers, rather than warehousing and packing goods itself.
In the 2020 financial year, MyDeal put through $103 million of gross transaction value, which was up 164.6% year on year. Its revenue was a fraction of that, raking in $15.8 million.
The company made a small net profit after tax of $850,000 statutory or $37,264 pro forma.
MyDeal’s ace up its sleeve
Senvirtne told The Motley Fool he has gun executives with excellent online retail pedigree steering the ship.
“Our chairman Paul Greenberg is a veteran in this space… When I was starting up he ran DealsDirect — one of the very first online retail stores [in Australia],” he said.
“Dean Ramler — he’s an investor and he’s our chief merchandising officer — he’s the guy who built Milan Direct back in the day, which was acquired by Temple & Webster.”
Even though competition is fierce in online retailing in Australia, Senvirtne reckons the country is “underpenetrated” in the furniture and homewares sector compared to the United Kingdom and the United States.
“If you look at our mattresses or bed frames, you see there are 400 or 500 different products from different sellers,” he said.
“In Australia, no one has built a marketplace with a focus on household goods and furniture to the level where we have — being able to offer over 5m SKUs”