Mattress retailer Koala eyes ASX listing worth over $500 million
Koala, an online retailer known for its mattresses-in-a-box, is considering listing on the Australian Securities Exchange (ASX). The potential listing could value the ten-year-old company at more than $500 million.
Transaction snapshot
Deal value: Over $500 million
Deal multiples: N/A
Deal type: Potential ASX Initial Public Offering (IPO)
Investors: Founders Dany Milham and Mitch Taylor (holding over 50 per cent combined), Perennial Partners, cricketer Steve Smith
Koala is currently working with advisers to evaluate its IPO options. This follows the recent appointment of co-founder Dany Milham as CEO, replacing fellow founder Mitch Taylor. Together, the founders retain majority ownership of Koala and will ultimately decide whether the listing proceeds. The remaining shares belong to investors including Perennial Partners and cricketer Steve Smith.
Sources close to the discussions indicated Koala’s decision to pursue an IPO would depend heavily on market conditions and valuations of comparable companies. No final decision has been made yet. Koala and its advisers are closely monitoring competitor Temple & Webster, whose share price has significantly increased over the last two years, reaching record highs. Temple & Webster’s growth has been fuelled by an increase in both active customers and average transaction values.
For the last financial year, Koala reported revenues of $194 million and a profit of $558,000. Previously favoured by venture capital investors, the retailer enjoyed rapid revenue growth of 63 per cent and 48.5 per cent for the 2020 and 2021 financial years respectively. During that period, the company secured $60 million in private funding through JPMorgan and Ord Minnett.
Although revenue growth has moderated since then, Koala has successfully diversified into additional furniture lines and expanded internationally. Milham's return as CEO has reportedly rejuvenated the company, aligning it with a revival in consumer spending and positioning it for a potential IPO valued above $500 million.
Koala was founded in 2015 by Milham and Taylor, who each hold 25.4 per cent of the business through their entities, Milham Industries Pty Ltd and Bopify Ltd. Milham temporarily stepped away to launch fast grocery delivery company MilkRun, which raised venture capital funding but was eventually acquired by Woolworths in 2023.
Koala has previously considered an IPO, having presented at Ord Minnett’s IPO candidate showcase in 2022. Executives who managed its $60 million private funding round at Ord Minnett and JPMorgan have since moved to Barrenjoey Capital Partners.
Temple & Webster is currently valued at 3.37-times sales, up significantly from 0.71-times three years ago. On an enterprise value to EBITDA basis, its multiple increased dramatically from 19.6-times to 133-times over the same period.
