News & Analysis

Redbubble reveals financial performance and intention to raise $50 million through IPO

- March 17, 2016 3 MIN READ

Redbubble, the online marketplace for creatives, has released its half year financial performance and confirmed its intention to raise $50 million through an ASX listing in June. A $12 million pre-IPO funding round led by Blackbird Ventures has also been finalised, with the startup looking to bring new institutions onto the Redbubble platform as part of its strategic growth plans.

Redbubble’s half year results include its growth transaction value of $80.6 million, a substantial increase of 80 percent. The platform’s growth is due to a 63 percent increase in customers and a 62 percent growth in selling artists.

Redbubble CEO and cofounder Martin Hosking said, “With 93 percent of sales offshore, we have caught a global consumer trend towards more distinctive and personalised products. The 442,000 artists currently in the Redbubble marketplace mean that customers the world over can find just what they are interested in at Redbubble.com.”

The Melbourne-based startup is positioning itself for the next wave of growth with a number of key hires from global tech and thought leaders including former VP of Engineering at Indiegogo Victor Kovalev as CTO, former Centro Properties Group CFO Chris Nunn as CFO, and board regular and Grant Murdoch as a non-executive director.

“Growth during the half-year highlighted the marketplace dynamics at play at Redbubble. Redbubble’s growth continues to be largely organic; as more artists join, more customers have a reason to buy and with more customers, there is more reason for artists to sell through the marketplace. This contrasts how traditional retailers work which generally rely on paid acquisition to grow,” Hosking said.

Founded in 2007, Redbubble hosts over 14 million images with artists earning over $30 million through the sale of various products like shirts, stickers and other accessories.

Redbubble is on a mission to create the world’s largest marketplace for independent artists. In March the company launched in Germany as part of their advancement into offshore markets. As of March 1 there were 158 people working at Redbubble, with 90 employers based in their Melbourne office.

Another Australian online design marketplace, 99designs, also released its financial performance recently, showing the company has racked up almost $82 million in revenue last year. Global expansion has been key to the company’s financial growth with top performing markets in the US, Australia, UK, Canada, and Germany.

Listing seems to be on the mind for a range of Australian companies who are gearing for global expansion early in the year. Perth startup Nuheara, an audio wearable company with an office in San Francisco, announced its listing on the ASX last month. So far the company raised $3.5 million in a public offering that closed early due to a high amount of subscribers.

Justin Miller, CEO Nuheara said, “We are really pleased with the response from the market to the Nuheara public offering. As an ASX listed entity and Australia’s only listed consumer Wearables company, we are now well positioned to progress our prototype towards full commercial production, targeting a burgeoning global market.”

Along with the online design market, the wearables market is experiencing explosive growth patterns around the world. In February International Data Corporation (IDC) released an update on the wearable device market revealing that it had doubled to sales of  27.4 million units in the fourth quarter of 2015. Across the full year, vendors shipped a total of 78.1 million units, up 171.6 percent from 28.8 million units in 2014.

“Triple-digit growth highlights growing interest in the wearables market from both end-users and vendors. It shows that wearables are not just for the technophiles and early adopters; wearables can exist and are welcome in the mass market,” said IDC Research Manager Ramon Llamas.

The trend for Australian tech companies expanding around the world is on the rise. According to Deloitte’s 2016 IPO Report there were 97 ASX IPO listings across 2015, with a market capitalisation of $17.6 billion and a capital raised in excess of $8.6 billion.

According to Deloitte Corporate Finance partner and Head of Transaction Services Ian Turner, “Volatility in China and falling commodity prices have created an unsettling environment for equity investors, but IPOs remained stock market darlings in 2015, dominated by the technology and financial services sectors.”

Turner said that the list of top performing IPOs shows growth in technology and related sectors.

“A key theme for 2016 will also be innovation. While hopeful tech startups looking to follow the path of Atlassian’s listing success will be a large component of this trend, companies that provide solutions for Australia’s ageing population and those that can tap into Chinese consumer demand will also present value propositions for investors.”

Image: Martin Hosking. Source: Supplied