Booktopia raises $20 million in bid to become Australia’s biggest bookseller
Booktopia founder Tony Nash is bullish on investment despite weak conditions in the retail sector after closing an equity deal that will pour $20 million of new capital into the business.
Bringing an end to a long search for funds, Nash on Thursday announced a consortium of private investors have tipped in to the online bookseller, led by Champ Ventures co-founder Su-Ming Wong and JBS Investment founder John Sampson.
It comes less than a week after Booktopia bought collapsed Co-op Bookshop out of the retail bargain bin, although Nash said these events are unrelated.
The money will be used to chase Big W’s spot as Australia’s largest book retailer, which Nash is confident the business will accomplish before year’s end as the Woolworths-owned department store closes sites across the country.
“In the past, we’ve had to sell the books to create the money to invest. Now we don’t have to do that,” Nash told SmartCompany.
“We can execute on all our plans.”
Booktopia plans to double its inbound and outbound capacity from 30,000 individual books per day to 60,000, and will also invest in expanding the capacity of its 13,000sqm Sydney warehouse to keep up with growing demand for popular titles.
Nash said he’s not worried about investing at a time of downturn for Australia’s retail industry.
“My recommendation is everyone start investing,” Nash said.
“If you invest now when things are tougher then you are in a strong position to catch the prevailing headwind.
“Then when things pick up, you’re miles ahead of the competition.”
While Nash did not disclose how much of the company he signed away, the entrepreneur did confirm founding shareholders will retain a majority stake in the business.
Booktopia booked $131 million in revenue for the financial year 2019, and Nash said the business was expected to grow to $175 million in the 2020 calendar year.
In an interesting coincidence, the announcement comes as Booktopia celebrates its 16th birthday.
Under the deal, which also included a portion of long-term debt, Wong will join Booktopia’s board, which is additional advice Nash welcomes.
“You can get dumb money, and you can get smart money,” Nash said.
“By getting someone smart to invest, you can sit down and talk strategy. We’ve got people inside the tent rather than consultants.
“We’ve always wanted to have someone who can add value around the boardroom table.”
Nash’s journey trying to raise capital for the Booktopia business has been long and tumultuous. In late-2018, the founder embarked on an ambitious $10 million equity crowdfunding strategy, but finished well short of his target after some scrutiny from corporate regulator ASIC.
This article was first published by Smart Company and has been shared with permission.