Latest / What the Flux / The Iconic finally turns a profit | Koala’s IPO reality check | Robinhood’s private strategy

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The Iconic finally turns a profit | Koala’s IPO reality check | Robinhood’s private strategy · What the Flux

• 0:05
  Speaker 1: This is what the flax. I'm Brett and I'm justin.
• 0:08
  Speaker 1: It's Wednesday, eleventh of February.
• 0:09
  Speaker 2: Does a boy. According to new figures from the ABS,
• 0:11
  Speaker 2: the value of Australia's residential dwellings increased by three point
• 0:15
  Speaker 2: two percent to a whopper at twelve point three trill,
• 0:18
  Speaker 2: which raises the obvious question, are we a country with
• 0:21
  Speaker 2: a housing market or a housing market? When a country attached,
• 0:24
  Speaker 2: I reckon, We're definitely.
• 0:25
  Speaker 1: Just a housing market. Here been man. Last time, the
• 0:27
  Speaker 1: Melbourne Grand Prix ran over the weekend with some big
• 0:30
  Speaker 1: results and a huge churn out. But who are the
• 0:32
  Speaker 1: biggest and best earners in the Formula one across the
• 0:35
  Speaker 1: whole season. We'd unpack every single team, every single driver
• 0:39
  Speaker 1: to see who performs the best and which team is
• 0:41
  Speaker 1: value the highest. So if you want to learn more
• 0:43
  Speaker 1: about the Grand Prix after the big weekend, it may
• 0:45
  Speaker 1: sure to download the Flux app and check it out.
• 0:46
  Speaker 2: Three monstrous stories today, Juzzy boy, let's do it for
• 0:50
  Speaker 2: our first. The Iconic has finally turned a profit after
• 0:53
  Speaker 2: fifteen years as it shifts away from growth at any
• 0:56
  Speaker 2: cost and focuses on margins.
• 0:58
  Speaker 1: Even fashion retailers are eventually learned that black is the
• 1:01
  Speaker 1: most flattering color on the balance sheet too, So tell
• 1:03
  Speaker 1: me what'll me man?
• 1:04
  Speaker 2: All right? So The Iconic was founded in twenty eleven
• 1:06
  Speaker 2: and has grown into one of Australia's biggest online fashion retailers.
• 1:09
  Speaker 1: Yeah, thousands of brands on its website across clothing and sport.
• 1:12
  Speaker 2: Beauty and Hoe and jogeboit. One in five Australian household
• 1:16
  Speaker 2: shops on the Iconic these days, and.
• 1:17
  Speaker 1: Its app has been downloaded more than eight million times.
• 1:20
  Speaker 2: But boyd, despite the growth in customers, the Iconic hasn't
• 1:23
  Speaker 2: really been growing its bottom line until now. Yeh.
• 1:25
  Speaker 1: After fourteen consecutive years of losses, the Iconic posted its
• 1:29
  Speaker 1: first net profit of one point nine million dollars in
• 1:31
  Speaker 1: twenty twenty five.
• 1:32
  Speaker 2: Which is quite the wardrobe change because the recent numbers
• 1:34
  Speaker 2: were rough.
• 1:35
  Speaker 1: Yeah, we're talking more than a twenty million dollar loss
• 1:37
  Speaker 1: in twenty twenty four and nearly forty eight million dollar
• 1:40
  Speaker 1: loss in twenty twenty three. So, man, how do they
• 1:42
  Speaker 1: manage to switch together this turnaround?
• 1:44
  Speaker 2: Two words, my little friend, marketplace model and right now.
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  Speaker 2: Marketplace sales account for thirty six percent of the Iconic's
• 1:52
  Speaker 2: total merchandise value.
• 1:53
  Speaker 1: So after fifteen years of trying different retail outfits, the
• 1:56
  Speaker 1: Iconic may have finally found the one that actually.
• 1:58
  Speaker 2: Fits interesting all juzzy boys. So what is the key
• 2:01
  Speaker 2: learning here?
• 2:01
  Speaker 1: A marketplace business model is when a company connects buyers
• 2:04
  Speaker 1: and sellers on a platform, rather than owning and selling
• 2:07
  Speaker 1: all the products itself.
• 2:08
  Speaker 2: Yeah, traditional retailers by inventory, they hold it in warehouses
• 2:11
  Speaker 2: and then sell it to their customers.
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  Speaker 1: That means they take on the risk if the products
• 2:15
  Speaker 1: do own.
• 2:16
  Speaker 2: Sell next minute, you now own a warehouse full of
• 2:18
  Speaker 2: unpopular ugly jackets.
• 2:20
  Speaker 1: Whereas a marketplace model flips that dynamic.
• 2:23
  Speaker 2: Instead of buying the inventory, the platform lets third party
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  Speaker 2: brands list their products and pays the platform a commission
• 2:29
  Speaker 2: on every sale and be man. This hybrid approach is
• 2:31
  Speaker 2: actually quite common among large platforms. For example, Amazon sells
• 2:35
  Speaker 2: products it owns directly to customers, but it also runs
• 2:38
  Speaker 2: Amazon Marketplace, where millions of third party sellers list products,
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  Speaker 2: and today more than sixty two percent of items sold
• 2:44
  Speaker 2: on Amazon come from their marketplace sellers. And just boy.
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  Speaker 2: This strategy is powerful because the Iconic already has strong
• 2:51
  Speaker 2: distribution through its existing customer base.
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  Speaker 1: So by layering a marketplace on top, it can significantly
• 2:56
  Speaker 1: expand its product range and earn commission revenue.
• 2:58
  Speaker 2: Without taking on the risk of holding all that inventory itself.
• 3:02
  Speaker 1: For our second story, Koala, the box mattress maker, is
• 3:06
  Speaker 1: heading to the ASX in a three hundred and five
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  Speaker 1: million dollar IPO, But it's a far cry from the
• 3:11
  Speaker 1: valuation that once streams of.
• 3:12
  Speaker 2: Koala is finally getting out of bed and heading to
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  Speaker 2: the stock market. Tell me more.
• 3:16
  Speaker 1: Okay, So, Koala is the Ozzie furniture brand that's launching
• 3:19
  Speaker 1: twenty fifteen selling mattresses in a box.
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  Speaker 2: Not exactly the most glamorous business idea in history.
• 3:24
  Speaker 1: No, no, no, But it turns out OSSI's are very
• 3:25
  Speaker 1: passionate about two things, good sleep and not carrying a
• 3:28
  Speaker 1: heavy mattress up three flights of stairs.
• 3:31
  Speaker 2: Yep. Koala quickly built a cult following things. So it's
• 3:33
  Speaker 2: one hundred and twenty day return policy.
• 3:35
  Speaker 1: And the man don't forget it's rogue ads that made
• 3:37
  Speaker 1: fun of its competitors.
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  Speaker 2: Since then, it's expanded from just mattresses to a full
• 3:41
  Speaker 2: blown homewors company.
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  Speaker 1: Thinks sofa beds, coffee tables, armchairs, bed sheets, outdoor furniture Now.
• 3:46
  Speaker 2: Does it boit? Koala has reportedly locked in plans to
• 3:48
  Speaker 2: list on the ASEX on April.
• 3:50
  Speaker 1: First, April full stay.
• 3:52
  Speaker 2: Yeah. And as part of this listing, it would value
• 3:55
  Speaker 2: the company at about three hundred and five million bucks
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  Speaker 2: and that's a pretty big step down from earlier ambitions.
• 4:01
  Speaker 1: Yeah. Last year Koala was hoping to list the company
• 4:03
  Speaker 1: at a value of more than five hundred million dollars.
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  Speaker 2: But the float is happening in a pretty tricky market.
• 4:08
  Speaker 2: So what is the key learning here?
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  Speaker 1: Timing the market can make or break an IPO.
• 4:13
  Speaker 2: For years, Koala was seen as a private equity darling,
• 4:17
  Speaker 2: but the IPO market has been pretty rough lately.
• 4:19
  Speaker 1: Especially for consumer companies that depend on people's splashing cash
• 4:23
  Speaker 1: on furniture and homeworks.
• 4:24
  Speaker 2: And does it with the number show just how much
• 4:26
  Speaker 2: sentiment has changed.
• 4:28
  Speaker 1: Back in twenty twenty, when Kerala had one hundred million
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  Speaker 1: revenue and was just profitable, it was pitching a private
• 4:33
  Speaker 1: capital raise at five hundred million dollar valuation.
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  Speaker 2: In March last year, with one hundred ninety four million
• 4:38
  Speaker 2: bucks in revenue and also being just profitable, it was
• 4:41
  Speaker 2: seeking a five hundred million dollar IPO.
• 4:43
  Speaker 1: And now with two hundred and seventy seven million revenue
• 4:46
  Speaker 1: and a twelve million dollar e bit dark it's just
• 4:48
  Speaker 1: seeking a three hundred and five million dollar valuation.
• 4:51
  Speaker 2: So interestingly, the business itself is in better financial shape,
• 4:54
  Speaker 2: but the market has become a lot less comfortable with
• 4:56
  Speaker 2: consumer IPOs. For our third and final store, Robinhood, the
• 5:01
  Speaker 2: US trading platform, has launched a fund to give retail
• 5:04
  Speaker 2: investors access to private companies. But the market is not
• 5:07
  Speaker 2: exactly rushing in.
• 5:08
  Speaker 1: Everyone just wants to slice of the next open aib man,
• 5:11
  Speaker 1: So tell me more, yep.
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  Speaker 2: Robinhood is the US based trading platform famous for pioneering
• 5:16
  Speaker 2: commission free stock trading.
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  Speaker 1: And bringing millions of retail investors into the stock market.
• 5:20
  Speaker 2: In fact, jazy boy. Robinhood now has more than twenty
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  Speaker 2: million funded accounts.
• 5:24
  Speaker 1: Largely driven by younger investors who started trading meme stocks
• 5:27
  Speaker 1: during the pandemic.
• 5:28
  Speaker 2: Now last month, robin Hood launched a new investment vehicle
• 5:31
  Speaker 2: called robin Hood Ventures Fund Number one.
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  Speaker 1: The goal is to give everyday investors exposure to private startups.
• 5:38
  Speaker 2: In other words, the part of the market that usually
• 5:40
  Speaker 2: sits behind that velvet rope reserved for venture capitalists and
• 5:44
  Speaker 2: institutional money and man.
• 5:45
  Speaker 1: The first fund includes stakes in eight private companies.
• 5:48
  Speaker 2: We're talking Stripe, Data, Bricks, Air, Wallax, Revolute, Aura and
• 5:53
  Speaker 2: a few others.
• 5:54
  Speaker 1: And the Man. The fund had a pretty ambitious billion
• 5:57
  Speaker 1: USL target, but their demand came in lower and expect
• 6:00
  Speaker 1: raising just over six hundred and fifty million dollars instead.
• 6:03
  Speaker 2: And on the first day of training there was a
• 6:04
  Speaker 2: sixteen percent drop in its share price.
• 6:07
  Speaker 1: Ouch. So what is the key learning here?
• 6:09
  Speaker 2: Some of the biggest capital gains in companies today happened
• 6:12
  Speaker 2: before the IPO bell ever ring.
• 6:15
  Speaker 1: We know that private markets have exploded over the past decade.
• 6:18
  Speaker 2: And with more money flowing into private companies, the medium
• 6:21
  Speaker 2: age of companies staying private has increased from under seven
• 6:24
  Speaker 2: years in twenty fourteen to eleven years today.
• 6:28
  Speaker 1: Wow. That means many of the juiciest growth years happen
• 6:31
  Speaker 1: while the company is still private.
• 6:33
  Speaker 2: And because retail investors usually can't access those early rounds,
• 6:36
  Speaker 2: products like Rumborhood Adventures are trying to bridge that gap.
• 6:39
  Speaker 1: SA. We know that the Formula one race happens both
• 6:41
  Speaker 1: on and off the trap, and our latest article we
• 6:43
  Speaker 1: revealed the top five fe teams based on their valuation.
• 6:46
  Speaker 1: So you want to learn more about the biggest teams
• 6:48
  Speaker 1: in one of the biggest sports around the world, make
• 6:50
  Speaker 1: sure to download the Flux app and check out our
• 6:52
  Speaker 1: latest article.
• 6:53
  Speaker 2: Thanks for listening and we'll see you on for Wriday