But as luck would have it, a three-hour, 20km-plus bike ride up Mount Dandenong on the fringe of Melbourne’s east is his favourite. “The ride up is quite an effort, and it’s probably a six-hour round trip journey,” Salter says. “I don’t do it much these days as I am always working … but if this goes well I might get back to it regularly in a few more years.” Fourteen years after Salter launched BikeExchange with business partner Jason Wyatt, the online marketplace is geared up to launch its initial public offering on Tuesday. The business, described as carsales.com.au for all things cycling, is aiming to raise $20m with a 26¢ share offering on the back of raising the same amount through a pre-IPO round. Brokerage Morgans is the lead manager and underwriter.Once listed, the company will have a market capitalisation of $76m. Fund manager Bombora has backed BikeExchange through the entire process, with Findex Corporate Finance advising, Morgans acting as broker and Deloitte as auditor. After spending years growing on “light capital basis”, which involved expanding into seven other countries, Salter says he can hardly believe he is backed by such an accomplished team. And one true believer who has been there from the beginning is staying for the ride: Cycling enthusiast, Jayco Caravan founder and The Australian Richest 250 lister Gerry Ryan. “Gerry has been a longstanding investor in the business and has been a terrific person to have involved. He continues, which is terrific,” Salter said. “He will be a major shareholder after the listing and he’s the largest shareholder in the business currently.”
Founded in 2007, BikeExchange has experienced fast-paced growth. Sales of bike parts, wheels, clothing and bikes themselves are up 145 per cent year on year in 2020 and generating $US1.05bn in sales leads to their more than 1450 retail partners in North and South America, the EU, Australia and New Zealand. The company has multiple income streams: subscriptions are sold to bike retailers who sign up to the online marketplace, commissions are collected from purchases made through the site and revenue is collected from online classifieds and media sales. According to its prospectus, the company booked revenue of $3.67m in the last financial year, with subscriptions accounting for 70 per cent. The businesses posted a loss after tax of $2.9m, which had narrowed from $4.22m a year earlier. Traffic to the website last year was 39.2m people. BikeExchange CEO Mark Watkin said consumer interest in biking was expanding — and changing — due to the COVID-19 pandemic. “Everything that looks good about cycling was emphasised in COVID,” Watkin said.“A lot of the cycling trends that were happening before COVID accelerated — infrastructure, environment, where we live and how we work, dovetail nicely in how cycling can help societies, individuals and communities.” Watkin — who believes Adelaide (home of the Santos Tour Down Under) is the best place to cycle in Australia — said cycling trends were changing worldwide, with a huge growth in demand for e-bikes. “Over 50 per cent of the bikes we see going through the site in Germany are e-bikes,” he said.“In Australia, they are still in single digits — but acceptance and understanding are growing. “It also brings in a whole new category of consumer who might not have looked at a bike for transportation previously.”BikeExchange is planning to use proceeds from the IPO to extend reach in their current markets and boost their marketing campaign. One focus will be the continued promotion of professional cycling teams. Team BikeExchange currently sponsors the GreenEDGEcycling UCI WorldTeam. “As far as global exposure goes, that’s a huge coup for our business,” Salter said.
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