The private company’s third attempt to fund growth was successful following a failed initial public offering (IPO) four years ago and the failure of a crowd funding attempt to raise $10M.
The equity was raised from a consortium of private investors led by Su-Ming Wong, co-founder and CEO of Champ Ventures (who will join the board of Booktopia) and John Sampson, founder and CEO of JBS Investments.
The investment came less than a week after Booktopia bought collapsed Co-op Bookshop; Tony Nash, a Booktopia founder said the two events were unrelated.
The founding shareholders, Tony Nash, Steve Traurig and Simon Nash, retain majority control and Booktopia will continue to be an independent Australian-owned business, founded in 2004.
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 13,000-square-metre Lidcombe warehouse where some 650,000 books are held there for distribution
The company plans to chase Big W’s spot as Australia’s largest book retailer, which Tony Nash is confident the business would 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,” he said.
“We can execute on all our plans.”
Booktopia booked $131M in revenue for the financial year 2019, and Mr Nash said the business was expected to grow to $175M in the 2020 calendar year.
Co-op bookshops, established in 1958 by students at the University of Sydney, as a student co-operative textbook retailer, went into administration last year.
The rise of e-commerce saw online retailers like Booktopia able to use their scale and low overheads to offer even more competitive prices, not to mention faster shipping and popular payment methods like buy now pay later.
“The combination of weak retail trading figures coming up to Christmas and the collapse of ‘over the counter text book’ sales by over 40 per cent from last year, has left the board with no alternative but to appoint a voluntary administrator, said Co-op chairman Joe Merhi, in a statement released by PYC.
Mr Nash said Booktopia was the number one tertiary textbook retailer in Australia before acquiring the Co-op business, with more than $40M of its projected $175M revenue for this year coming from textbook sales
Booktopia did not purchase the Co-Op’s 30 plus bookstores or its remaining inventory as part of the acquisition.
Mr Nash did not disclose how much Booktopia paid for the Co-Op’s website, some software and customer data.
