MyDeal.com.au is kind of a big deal, enters ASX with a bang

If there is any sector that symbolises bullish opportunities for a post-pandemic world, it is e-commerce.

Kogan (ASX: KGN) shares have tripled since the start of the year, Temple & Webster (ASX: TPW) shares have quintupled, and traditional retailers that have successfully pivoted online are reaping the rewards.

Even the incumbent global giant Amazon (NASDAQ: AMZN) has seen its shares jump 68 per cent off a very high base since January 2020.

Investors simply can't get enough of the space, so it is unsurprising that household goods e-commerce player MyDeal.com.au (ASX: MYD) started trading today at an 80 per cent premium to its initial public offering price of $1 per share.

Founded in 2011 by Sean Senvirtne (pictured), who now owns 47 per cent of the $465 million listed entity, MyDeal recorded 317 per cent year-on-year gross sales growth to $56.7 million in the September quarter alone.

But in the company's prospectus Senvirtne said the group was only at the beginning of its journey.

The IPO sought to raise funds of $40 million at $1 per share in order to grow MyDeal's private label business that is targeting gross margins of 35-40 per cent, as well as invest in proprietary technology such as app development and advertising to grow the customer base and brand.

At the time of writing this morning, MYD shares were trading at $1.81 each.

"MyDeal has gone through several evolutions since inception including group buying, dropshipping, and we were one of the earliest online retailers in Australia to launch a marketplace," Senvirtne said in the prospectus.

"We have an exciting roadmap of growth opportunities in the short to medium term such as the development of our mobile apps and the expansion of our private label business, however, what I am most excited about is the innovative solutions that we can deliver for our customers and sellers in the future as our marketplace continues to evolve."

RBC and Morgans were the joint lead managers and underwriters of the IPO, Henslow was the company's corporate advisor and Maddocks acted as legal advisor.

"This is a very exciting day for MyDeal, and I am delighted with the strong support that we received from both institutional and retail investors," Senvirtne said today.

"I would like to thank our long-term shareholders for their ongoing support, and welcome new shareholders to be part of the exciting journey ahead of us.

"I would also like to thank the amazing team at MyDeal. It has been an incredible journey, and this milestone would not have been possible without your hard work and dedication."

After recording a statutory profit of $849,232 in FY20, in the first quarter of the current financial year MyDeal recorded 268 per cent year-on-year active customer growth to 669,897.

With more than 1,700 sellers on the platform, the group's main source of revenue is a commission fee for every product and service sold on the marketplace.

The company pushed forward with its private label strategy with the market segment expanding rapidly, including more than 100 products listed for sale across key categories such as furniture and homewares.

MyDeal started selling products under the Duke Living and ErgoDuke brands in June 2020, which racked up $1.6 million in gross sales until the end of September.

Updated at 12:02pm AEDT on 22 October 2020.