So just over a year on from its $2 million capital raise led by AirTree Ventures, premium designer furniture and e-commerce retailer Brosa has announced YoY growth of more than 400 per cent (average month on month growth of over 30 per cent), with staff numbers increasing from a team of eight to 50.
Brosa launched in 2014 after its founders discovered there was no easy and affordable way to purchase premium furniture. To fill this gap in the market, Brosa works directly with premium makers from all around the world to create unique designs for the Australian market.
By selling these designer pieces direct to consumers online, Brosa is able to offer pieces at up to 70 per cent off traditional retail prices across various furniture categories, and keeps quality high and prices low through its vertically-integrated business model where the “middleman” is cut out.
The success and growth of co-founder, Ivan Lim, and his team at Brosa has not gone unnoticed by national and regional audiences either. Earlier in 2016, Ivan was listed in Forbes Asia’s 30 Under 30 innovators revolutionising their industries in the Retail & Ecommerce category.
As can be expected from such strong growth trajectory, Ivan has been approached by a number of interested parties around a potential future fundraising, although Ivan is in no hurry to rush this process as he endeavours to find the right partners who share Brosa’s vision and who can add real value to the future direction of the business (including aspirations to eventually grow into the Asia Pacific).
What has Brosa been up to lately?
Ivan said: “It’s been just over a year since we brought AirTree on board and since then we’ve learnt first hand how crucial having the right investor is. I speak with a lot of founders and while some have a great board there are others who have investors who can’t add a lot of value or don’t have a deep understanding of the industry or space, which makes growing harder.
“For us, it was pretty clear that AirTree had the domain expertise and execution experience having been entrepreneurs themselves. While they know they don’t have all the answers, they always aim to ask the right questions. That’s been very useful in growing the business and realising how important a structured disciplined approach is to scaling a start-up. They keep us focused and we’ve learnt to operate at a much higher level.”
Ivan continued: “Entrepreneurs love finding new opportunities and moving fast. This rapid execution ability is a great trait but can be distracting especially as you scale a business. Experienced investors can get everyone to take a step back and critically assess decision making to ensure you’re executing in the right way at the right time, instead of haphazardly. AirTree has been a valuable sounding board for us, redirecting our focuses away from certain things which in hindsight were great decisions.”
Airtree Ventures is impressed with this growth
Managing Partner at AirTree Ventures, Craig Blair, commented: “We have been impressed with Brosa’s growth numbers and disciplined approach over the last 15 months. Vertically integrated ecommerce is a complex model to scale but success in other verticals demonstrates the huge potential of this model and we look forward to working alongside Brosa to strengthen their unique offering and competitive advantage.
“We are excited to continue our partnership with Ivan and the team, and to work with them to see the business scale exponentially. Brosa is proving us right when we said that they are the future of ecommerce – it is certainly a great feeling to know that we are partnered with a leader in the market.
“It is such a strong business gain for both sides when there is ongoing and openly transparent dialogue between investors and investees. Our partnership with Brosa is testament to this – a seemingly simple question from our side might spark a new and innovative thought on their end, and vice versa. It is a mutually beneficial partnership, which just cements for us why Brosa is part of our client portfolio,” Mr Blair said.
Brosa’s impressive progression and growing brand awareness to date reflects a broader trend taking place in the furniture retail industry: according to IBIS World, the online household furniture sales industry is forecast to grow by 15.7 per cent in 2015-2016 to reach around about $419 million in yearly revenue. It’s also quite telling (and rather alarming) that Australia’s online penetration rates for the combined furniture and homewares market – a $12.6B industry – is only about 4 per cent, whereas in the U.S. it is over ten per cent and in the U.K. it is over 13 per cent… this signals to some astronomical growth for the industry at large.
A few tips for start-ups on raising capital
Ivan said: “It is not just about raising money, investors need to be able to offer guidance around what our business needs, what we need to look out for in the market, what will make us succeed and what we need to be aware of.”
“Founders need to build up a strong relationship and rapport with potential investors. In the lead up to AirTree Ventures investing in Brosa, we were talking to them for a good ten months. Over this time, their guidance and advice filled us with confidence that they would bring so much invaluable advice to the table.”
“When you start growing fast, previous processes and systems no longer work, so the team has to be adaptable and evolve with the business every few months.”
“The hiring process can be a challenge. When you’re scaling at such a fast rate, you want help right there and then. It seems an easier solution to compromise on what the business needs long term and just hire on the spot. I’d say always keep in the back of your mind what the business needs to flourish long-term because you run the risk of bringing on the wrong people for the rest of the team otherwise.”
“Culture is so important when you are growing as fast as we are. It is who we are as a community of people, it is what our tribe represents. It will continue to grow and new elements will be added, which is an exciting and dynamic reality. Of course, there is always a core set of values that you aren’t willing to compromise on as founders, but the culture will continue to evolve organically as we continue to hire the right talent for the job.”