Booktopia has pulled out of plans to raise $10 million from customers and everyday Australians after struggling to reach its minimum goal for investment.
The business announced last year that it was looking to raise at least $3 million and up to $10 million through the crowdfunding platform Equitise.
At the time, it was publicised as the biggest ever crowdfunding attempt through Equitise. But the company on Tuesday revealed that it is ending the crowdfunding round early after raising just short of $900,000.
Booktopia founder Tony Nash told Inside Retail that while the funding never stopped coming in, the company decided to let the campaign peter out after it received significant interest from the wholesale investment community.
“Taking a larger investment from one or two strategic investors right now is the best partnership we can secure for our customers and our future growth,” Nash said.
“If we weren’t talking to the investors looking to invest $20 million to $30 million we would have done a big push to say the offer is ending, and probably got to the $3 million.”
Nash confirmed the funds raised through the campaign are currently held in trust, and will be returned to equity investors soon.
Booktopia may consider using the platform again in the future when the “time is optimal and we’ve been able to scale thanks to larger investment.”
Nash noted that the business is successful enough as is, and that the purpose of the extra funding is simply to reach its goals faster.
“We are happy to bring on some strategic partners who have experience in the area that we do not have, and that is a key component on taking on the extra funding,” Nash said.
The equity funding would have been used to drive an expansion in warehouse automation, hold more stock (the business estimates it is only using 25 per cent of its space), and continue to fund the liquidity of the business.
Booktopia’s Equitise campaign would have allowed 8.1 per cent of the business to be owned by everyday Australians, something Nash said he still likes the idea of.
Equitise co-founder Chris Gilbert stated he ultimately agrees with the Booktopia board’s decision, noting he looks forward to working together with the book retailer again in the future.