Mattress-in-a-box pioneer Koala forecasts $332m revenue after IPO

Viral mattress-in-a-box brand Koala has officially begun trading on the ASX under the ticker ‘KOA’, raising $20 million in fresh capital through its long-awaited initial public offering.

The direct-to-consumer furniture retailer hit the ASX at 11am on Tuesday following the release of a $68 million prospectus that values the business at $305 million.

Early trading shows Koala capturing significant attention from retail investors. Market analyst Samy Sriram from Stake said the stock was the most actively traded on the platform within the first two hours of Tuesday’s session.

“Koala’s bold decision to list against a backdrop of global market volatility is already showing signs of strong early momentum,” Ms Sriram said.

“Within the first two hours of Tuesday’s ASX session, it was the most actively traded stock on Stake, with an overwhelming 95 per cent of orders on the buy side.”

The initial public offering comprised 20 million shares priced at $3.40 each, including $48.1 million from the sale of existing shares, while $20 million came from new shares issued by the company.

Primary proceeds will be used to repay debt, settle putted warrants, and cover transaction costs.

Founded a decade ago in Byron Bay by childhood friends Dany Milham and Mitch Taylor, the company began with vacuum-sealed mattresses and has since expanded into couches, armchairs and global markets, including Japan, the US and the UK.

From humble beginnings with just $2000, the listing cements the founders’ fortunes, with Mr Milham’s stake worth about $63m and Mr Taylor holding stock valued near $54m after selling down part of his holding.

Sydney fund manager Perennial Partners emerges as the largest shareholder at 22.7 per cent, while Alium Capital holds 5 per cent.

Koala’s earliest believers include Australian cricket star Steve Smith, who invested $100,000 in 2015 for a 10 per cent stake that ballooned to more than $10m within four years.

The company’s cheeky marketing has also played a defining role in its rise, including a viral mattress ad viewed more than five million times.

Mr Milham, the co-founder and chief executive, said Tuesday’s ASX listing was a “proud day for Koala” as the company began its journey as a publicly listed business.

“It reflects the hard work and passion of our incredible team over the past decade and the support of our customers, partners and shareholders who have believed in our vision from the start,” Mr Milham said.

“While listing our business is incredibly exciting, when Mitch and I founded Koala over a decade ago we didn’t do it with this goal in mind. We set out to build a better kind of furniture company focused on design, sustainability and to provide long-term value to the customer.

“That goal remains unchanged. Listing as a profitable business with a clean and robust balance sheet provides us an exceptional runway for growth.”

He said the company’s priorities were strengthening core categories, expanding internationally, and delivering “disciplined and sustainable” long-term returns.

“I love Koala, I’m proud of what we have built and am confident in the opportunity ahead. I look forward to continuing this journey as a listed business,” he said.

Financial forecasts show Koala expects revenue to reach $332m, up 20 per cent on FY2025, with Australian sales accounting for roughly half the total.

Graeme Hughes from Griffith University said the company was defying the slowdown affecting many online retailers.

“Koala is bucking the trend, and it has earned the right to do so,” Mr Hughes said.

“Most retailers in this space are either sitting on the sidelines or struggling with the hangover from post-pandemic demand softening.”

He added that Mr Milham’s decision not to sell shares was a strong signal of confidence and noted comparisons with rival Temple & Webster were imperfect given Koala’s vertically integrated model.

“Temple and Webster had a brutal year on the market,” he said.

“Koala would have watched that closely and structured its pitch accordingly, with a tighter product range and better margin visibility. Whether investors agree will be clear within days of listing.”

The company had postponed a 2025 float as trade tensions between the US and China disrupted North American expansion.

About 87 per cent of its products are still made in China, though the business spent six months rebuilding supply chains through Southeast Asia.

Marketing expert Arry Tanusondjaja from The University of Adelaide said Koala’s focused product strategy helped fuel its growth despite rising competition from brands such as Ecosa and Sleeping Duck.

“What Koala has done well is staying focused on a specific category before expanding to the whole house furniture, which has supported its growth,” Dr Tanusondjaja said.

“In many ways, Ikea reshaped how Australians shop for furniture and homewares.

“Koala builds on that shift by offering a fully online, simple way to buy.”

Koala chairman Michael Gordon said finding a way to list a business during a period of global uncertainty was “pure testament” to the brand Mr Milham and the team had built.

“We are grateful for the support and trust shown by new and existing investors throughout this process,” Mr Gordon said.

“Koala is well positioned to scale across its established and newer markets, supported by a differentiated brand, strong product innovation and a capital-light model.”