Koala prices $68 million IPO at $260m valuation

Online furniture retailer Koala has opened its books for a $68 million initial public offering on the ASX, pricing at $3.40 per share. The deal values the business at $260 million on an enterprise basis and $305 million on an implied market capitalisation basis. Co-founders Dany Milham and Mitch Taylor will retain significant stakes, while early backer Perennial Partners becomes the largest shareholder on listing.

Transaction snapshot

• Deal value: $68 million IPO raise at $3.40 per share; $260 million enterprise valuation; $305 million implied market capitalisation

• Deal multiples: 10.5x FY26 pro forma EBITDA (~$25 million)

• Deal type: Initial public offering

• Investors: Institutional bids due March 12, one-day retail offer on March 24. Existing shareholders include Perennial Partners (22.7%), Dany Milham (20.7%), Mitch Taylor (16.3%), Alium Capital (~5%), and Partners for Growth (warrants)

Koala plans to list on April 1. Of the $68 million raised, roughly $20 million will go towards repaying debt and covering transaction costs, while $48 million will flow to selling shareholders.

Perennial Partners is selling approximately 4.7 million shares into the IPO, collecting just under $16 million. It will remain Koala's largest shareholder post-listing with a 22.7% stake worth around $75 million. Milham, who returned as CEO after the collapse of his grocery delivery startup MilkRun, is not selling. He will hold 20.7% of the listed entity, worth approximately $64 million, plus 1.5 million shares in performance rights. Taylor, who stepped down as CEO in late 2023, is cashing out roughly $12 million but retains a 16.3% stake.

All three major holders have agreed to escrow arrangements. They cannot sell any shares until after Koala has posted FY27 results. From that point, each can sell half their respective holdings, with the remaining half locked until after FY28 results. However, if Koala's 10-day volume-weighted average price exceeds $3.40 by 20% or more, Perennial, Milham, and Taylor can each sell a quarter of their holdings from February 2027 (after half-year results).

Early investor Alium Capital faces no such restrictions. It is selling approximately 1.5 million shares at the IPO and is free to offload its remaining 5% stake once Koala has published FY26 results. Non-bank lender Partners for Growth holds warrants and intends to exercise its put option. IPO investors will own 20.5% of the company, with 14.8% held by other existing investors including option holders.

The IPO comes off the back of strong growth. Koala reported FY25 revenue of $276 million, up 42% year-on-year, with EBITDA of $13.5 million which is a 280% increase. The company is forecasting $330 million in FY26 revenue and approximately $25 million in EBITDA. It now operates across four markets: Australia, the US, Japan, and the UK. US revenue surged 680% in FY25 to $47 million, though the business faces ongoing tariff exposure following Trump's 25% duties on upholstered furniture.