Online design marketplace Redbubble will use $15.5 million in fresh capital to accelerate international expansion plans and continue rolling out new products.
Redbubble, which was founded by Martin Hosking, Paul Vanzella and Peter Styles in 2006, revealed the capital raise this afternoon, saying in a statement the institutional investor-led funding round was oversubscribed.
Among the investors are Melbourne-based Acorn Capital and London-based Piton Capital, which specialises in investing in marketplace. Piton Capital partner Greg Lockwood will now join the Redbubble board of directors.
Redbubble has previously raised just shy of $9 million in capital from private investors, including Simon Baker, Michael Birch, Stan Chudnovsky, Su-Ming Wong and Simon Yencken.
The online marketplace attracted 1.2 million customers in 2014 and is expected to turn over more than $100 million in sales by the end of this calendar year.
Speaking to SmartCompany this afternoon, Redbubble co-founder and chief executive Martin Hosking said Redbubble was aiming to raise between $10-15 million but it quickly became clear it was going to be able to raise more.
Hosking says while Redbubble has been expanding internationally for a number of years, the cash injection while allow the business to “strengthen” its presence in Europe.
More than 90% of Redbubble’s sales come from outside of Australia, with North America the company’s largest market, followed by Europe and then Australia.
Hosking says securing Piton Capital as an investor was particularly thrilling, given the fund’s base in Europe. But he says Piton also has a strong background in investing in marketplaces like Redbubble, which meant it could “talk about what we do authoritatively”.
“To find such an impressive investor was a real win,” Hosking says.
The raise will also allow Redbubble to “accelerate the product development process” and continue to foster the relationship it has with the artists that produce the work that is sold via the marketplace, Hosking says.
Redbubble launched its first women’s fashion-based product line this month and has plans for a back-to-school themed collection this year.
Hosking says Redbubble was presented with a number of options from potential investors but it was important to build a round that allowed the company to “retain flexibility around a potential IPO”.
He says both Piton and Acorn Capital can hold both private and public investments and are therefore “not traditional venture capital investors” that would see an initial public offering as a way to exit a business.
But Hosking’s advice to other entrepreneurs seeking to raise capital is to “cast your net broadly but with the view to finding the right investor”.
“The most important thing is to find investors that are aligned with the company,” Hosking says.
Hosking says early-stage companies can be attracted to “any money” or assume if they miss out on one investment, then no other investors will be interested.
“But that’s not necessarily the case,” he says.
“It’s about finding the right investors.”