Australian daigou social commerce business AuMake has raised $2.2 million through a placement aimed at powering the business’ post-COVID, and post-transformation, strategy.
Led largely by existing shareholder Novus Capital, the placement will see 131 million new shares issued at a value of $0.017 per share.
“The strong support we have received from new and existing investors reflects the long-term strategic thinking of the company in combination with operational discipline, to position the business with an opportunity to significantly increase market share given this period of structural change,” said AuMake executive chairman Keong Chan.
According to AuMake, funds raised through the placement will be used to promote and market the business’ new online platform, structural changes to increase market share in the ANZ tourism markets, the formation of domestic and international partnership opportunities, as well as more basic “corporate purposes”, such as meeting working capital needs.
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The business had been in a trading halt before making the announcement, and upon returning to normal trade on Wednesday saw shares tumble 14%.
The last few years have been difficult for the daigou-focused business, which set about transforming to a social-first marketplace offer to sell Australian and New Zealand produced goods directly to Chinese consumers.
The transformation costs, as well as the falling sales caused by a disappearance of daigou shoppers in Australia throughout the international pandemic, have caused the business to post repeated losses.
However, as AuMake noted in April, the majority of transformation costs and work are now behind it, meaning it can now work on recouping the losses it suffered throughout the pandemic.
This article was first published by Inside Retail.