The board of Australian online book retailer Booktopia has decided to walk away from an equity crowdfunding campaign it launched in November after failing to reach its minimum target.
The company had been hoping to raise between $3 million and $10 million at $1 per share on equity crowdfunding platform Equitise. As of this morning, the business had raised only A$893,750 of its target, which will now be returned to participants.
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Booktopia founder and CEO Tony Nash said 850 investors signed up to participate in the offer, but it wasn’t enough to continue with the crowd funding route.
“We have been humbled with the traction the offer received with over 850 keen investors. At this time, however, despite the great support, it’s not as much as we would have liked to continue with this route of capital raising,” he said
“We’re grateful to our partner Equitise for their unrelenting support and will look to engage in an equity crowdfunding campaign again in the future when the timing is more optimal and we’ve been able to scale thanks to larger investment. We still love the idea of our customers being part owners in Booktopia.”
The ecommerce business was once headed for an ASX listing but shelved the idea in 2016. Booktopia says it now plans to re-engage and continue discussions with growth funds, high net worths (HNWs) and family offices.
“We have started the process of exploring significant investment from a variety of sources including venture capitalists, home offices and wholesale investors,” Nash said.
“We are in discussions with external sophisticated investors interested after taking the opportunity to inspect Booktopia’s 5-year forecasts who were then able to understand the scale of revenue growth and profitability that the company on track to experience.”
Booktopia’s growth plan includes investing in further innovation and automation as well as holding more stock to fill its warehouse which is now currently only at 25 per cent capacity.
Chris Gilbert, the co-founder of Equitise agreed with the board’s decision.
“Equitise supports Booktopia’s decision to pursue other capital raising options with the intention that we can do another offer like this in the future together,” he said.
“Whilst the Booktopia offer had great traction, ultimately the crowd hasn’t invested enough. The offer was also affected by a lack of awareness from some investors that they could invest in unlisted companies like Booktopia. However awareness and participation in this type of investing continues to grow which is evident in the number of equity crowdfunding offers we have successfully closed. The equity crowdfunds are similar to the OIS offer Booktopia has run,” said Gilbert.
“In terms of Booktopia, it’s a great Australian company and the nation’s largest online book retailer. It’s growth year on year is impressive and we look forward to working with them again soon and offering the crowd the chance to invest in another retail offer,” he said.