Singapore’s luxury marketplace Reebonz on the verge of listing in the US

Draper Oakwood Technology Acquisition (DOTA) stockholders have approved a proposed “business combination” with Singapore-based online luxury goods marketplace Reebonz.

Reebonz is a pioneering regional luxury ecommerce firm that was set up in 2009 and made US$110 million in revenue in 2017.

The Reebonz building in Singapore / Photo credit: Reebonz

Its reverse merger was first announced in September, where it was proposed that the two companies would become wholly owned subsidiaries of a newly created Cayman Islands exempted company, Reebonz Holding Limited. Reebonz co-founder Samuel Lim will lead the new entity as chairman and CEO.

A reverse merger is a way for private companies to go public, which is typically seen as simpler and less expensive than a traditional initial public offering. The move is part of Reebonz’s plan to list on Nasdaq by end-2018, two years after the company expressed interest in going public.

The company decided not to pursue the IPO process in 2016 due to “unexpected market volatility,” it said in a statement. Reebonz had planned for the IPO to be a growth capital event, but it was constrained by a lack of funds.

Reebonz has applied for listing of its ordinary shares and warrants on Nasdaq under the ticker RBZ. There is no indication if the application has been approved. The company has also issued more than 17.3 million ordinary shares to prior Reebonz shareholders.

DOTA has since filed a notification of removal from Nasdaq with the US Securities and Exchange Commission.

Its executive chairman Rod Perry says the “online luxury retail space is fast becoming its own category with multi-billion-dollar-market-cap players emerging.”

Reebonz has more than half a million stock keeping units in its inventory, with over 5.5 million registered users. The online luxury platform has clocked in a gross merchandise volume (GMV) worth over US$255 million and net revenue of US$110 million in 2017.

However, it appears to have reached a ceiling in terms of revenue and GMV, which have been on the decline since 2016.

According to Reebonz, the Brexit vote in 2016 caused a global ecommerce disruption, leading to the company’s capital constraints. It limited its marketing spend and affected its GMV and revenue growth. The company doesn’t have a market presence in Europe, but a number of its sellers are from the region.

Reebonz’s GMV and net revenue growth / Photo credit: Reebonz & DOTA