Online private selling club Ozsale may be the next Australian online business to go public, with the company confirming this morning it has appointed Macquarie to lead the charge on a planned ASX listing.
The report is yet another sign the online retail market in Australia is beginning to explore public options. Late last year, online group Catch of the Day hinted it may consider floating in the next few years.
A spokesperson for Ozsale confirmed this morning the business is heading towards an initial public offering with Macquarie involved, although could not discuss figures or valuations.
According to one expert, it may be the perfect time for such a move. City Index analyst Peter Esho told SmartCompany this morning the market is waiting for another float to diversify the market.
“Right now, Seek is trading on an earnings multiple of about 16, and eBay is trading at a similar one of about 16.5-17. That’s a comparable multiple, and I think it shows the Australian online listed space is very crowded.”
“Valuations are very stretched. So it would be a good time to IPO something when there is demand in that space.”
Ozsale has been one of several online success stories of the past several years. Founded by Jamie Jackson, the company is turning over $250 million a year and has 5.5 million members.
The business differs from other daily deals sites. The company is a private shopping club, with users having to register before being able to buy. Companies then offer their merchandise – mostly in the fashion category – in about 10 sales per day.
The business started in 2006, after Jackson had already found success with other businesses. He purchased a company which had been placed in receivership, and then expanded the idea online.
The business has received significant attention from overseas investors, especially as part of a new breed of shopping clubs which started popping up in 2008-09. These businesses preceded group buying and have been able to sustain higher profits.
Ozsale received a $14.5 million investment from Insight Venture Partners in 2010, the same company which had invested in significant tech companies such as Twitter. It has used the funds to branch into south-east Asia.
The private shopping club model has had significant success in Europe, where investments have raised valuations for the industry worldwide. Along with another business, BrandsExclusive, Ozsale carves out a huge chunk of the local private shopping market.
These businesses have been able to maintain profits more easily than group buying businesses. Recently, Jackson told SmartCompany the business will be able to boost its profits following the acquisition of a sales website, BuyInvite.
While the business could not confirming timing, a report in Fairfax suggests the business will float in the next six months.
The confirmation of an IPO comes just months after Catch of the Day chief Paul Reining also told Fairfax the business was also considering a float.
Meanwhile, online service comparison website iSelect is also gearing up towards a 2013 listing.