A start-up which claims to have unique technology for bed mattresses has been financially backed by Australian cricket captain Steve Smith ahead of a $5 million fundraising round.
Online retailer Koala Mattress said it had recorded $1 million in sales in only 80 days since launching in November, and is forecasting $12 million revenue in its first year, with global expansion on the cards.
Co-founder Dany Milham said the capital raise would occur in the next three months and that it would fund the business’ expansion into China, India, the US and Europe.
“Because we’re so close to China it’s an obvious move. It’s always been our goal to expand there, but we had to establish it as an Australian brand first,” he said
In the past two years, Australian brands have grown significantly in popularity in China, with companies such as Blackmores and honey-maker Capilano already performing well, and personal care products manufacturer BMX eyeing the market.
The planned success of Australian businesses in China partly influenced the name Koala Mattress, but Mr Milham said it also reflected the social good the company was doing.
“We actually adopt a koala with every mattress we sell,” he said.
“During the course of the business we knew we would run out of koalas though with the demand for the mattresses, so with each expansion we’re looking to do the same thing but with a local animal to that country.”
The business has not yet appointed advisers to lead the $5 million capital raise, saying it was in talks with a range of investors who wanted to remain anonymous. Nor would it disclose the percentage of the company it was selling for $5 million.
The company says its mattresses incorporate world-first zero disturbance technology, which it is in the process of patenting. Its website boasts that you can balance a full glass of wine on the mattress, then jump on it without it falling over.
Cricket captain on board
Australian cricket star Steve Smith, who is the top ranked Test batsman in the world, became involved in Koala Mattress about a year ago and told The Australian Financial Review he had taken a hands-on role helping with the R&D process until he was appointed captain of the Australian team.
While he has since had to scale back his involvement, he remains an adviser to the company.
“I have always had an interest in start-ups and over the last two years have taken on a more active search for opportunities to become involved in companies which I thought could be successful,” Mr Smith said.
“I have had a lot of experience working with high-performing and driven young people and so I wanted to base my investment decisions on these traits. When I was introduced to Dany and Mitch [Taylor, one of the other co-founders] I was extremely impressed. I could see that they had the drive and the smarts to create something that people need, in a way that is innovative and truly different.”
Mr Smith, who was ranked 14th on BRW’s 2014 Sports Earners list with $3.1 million, was tipped to become the highest-paid cricket player. Over the next few years he intends to make more investments in start-ups and said he could possibly see himself having a career in business after cricket.
“I am certainly enjoying working with Koala, and learning a lot from Dany and Mitch, so who knows,” he said.
As well as expanding offshore, Koala Mattress intends to open bricks-and-mortar stores in Melbourne, Sydney, Brisbane and Perth this year, but it expects online to remain its main source of revenue.
“Retail is just to hit the people that wouldn’t buy online, or wouldn’t buy a mattress online without trying it first,” he said.
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