MyDeal emerges from year of “growing pains” with a second-half profit
Online marketplace MyDeal says it is facing a “world of opportunity” after becoming profitable in the second half of FY19 and ending the year with an earnings before interest, tax, depreciation and amortisation loss of just $161,138.
According to the Australian Financial Review, this could include an ASX listing, which is something many of the company’s marketplace peers have done – Kogan and Temple & Webster through IPOs, and Catch through acquisition by Wesfarmers.
“There’s a world of opportunity in the business,” Joshua Mangan, MyDeal’s chief operating officer, told Internet Retailing.
Sales in August so far are up 30 per cent year on year, and profitable, he said, giving the company a run rate of $55-60 million for FY20. MyDeal’s gross merchandise value in FY19 was $39 million.
The company, founded by entrepreneur Sean Senvirtne in 2012, has emerged from a period of “growing pains” with the right systems and technology in place to scale, according to Mangan.
“We had a large customer support team, but we still couldn’t keep up with the number of tickets [we received],” he said.
“We also were limited in the number of sellers we could get up onto the website, which was holding us back in terms of future growth. We needed to take a step back and overhaul the operations and technology.”
This overhaul has now taken place, freeing up resources – both financial and personnel – to invest in new technology to grow the business, such as a mobile app and AI-driven marketing.
The company recently signed with Salesforce, which offers personalised email, web and SMS marketing solutions.
“At some point we want to move into private label as well,” Mangan said. “That’s another massive opportunity from a profitability perspective.”
MyDeal’s first private label range, a collection of manchester under the Windsor Home brand, which the comapny owns, is expected to launch in the second half of FY20.
This is in keeping with the company’s shift in focus from offering products across multiple categories to home and garden earlier this year. The pivot came off the back of internal data that showed most customers associated MyDeal with items for the home, which is one of the fastest growing categories in e-commerce.
On top of its investment in technology to improve the customer experience, MyDeal has also announced a move to make it easier for hundreds of thousands of online sellers using the Shopify platform to list products on its site.
This follows an integration earlier this year with ChannelAdvisor, a technology provider that allows businesses to easily list products across multiple online marketplaces, such as eBay, Amazon and Catch, and manage inventory.
At that time, MyDeal said it was aiming to double the number of products on its site to more than a million. Range is one of the key ways online marketplaces acquire and retain customers, so integrations that make it easier for sellers to list products on the site are crucial.