Reebonz’s co-founder, major shareholders are offloading their shares

Major shareholders of Reebonz, a once rising luxury ecommerce marketplace that has struggled in recent years, have been looking to sell most or all of their shareholdings to the public market, the company’s public filings show.

Shareholders that are offloading their shares include co-founder and CEO Samuel Lim, Vertex Ventures, GGV Capital, Mediacorp, Matrix Partners, Intel Capital, and OCBC Bank.

Reebonz co-founders Samuel Lim (left), Daniel Lim (right), and Benjamin Han / Photo credit: Reebonz

Reebonz did not respond to a request for comment.

It is unclear what’s the expected upside for retail investors that snap up equity from these shareholders. However, in September, Lim said that the company would double down on its marketplace business, which has less operational overheads compared to its mainstay inventory model.

“We expect to turn the corner on growth later in the second half of the year or early next year, once we are able to see the results of the capital deployed. We believe that sustainability is key as we look to build our business for the long term,” he added.

The startup had borrowed heavily to sustain its operations even as it shrank. In September 2019, it raised US$3.3 million via a convertible loan. However, that money would not be enough to cover its net loss for the first half of the year.

Its net loss for that period stood at US$9 million, down from US$21.6 million. Despite the cost cutting, its adjusted EBITA – another measure of profitability – actually worsened. That period saw a revenue of US$31 million, declining from US$44 million in the year before.

See: Reebonz has been facing cashflow problems and rising debt

Reebonz’s stock price has been hit. It fell to US$1.20, which would put the firm’s market value at US$6.77 million. At its peak, it was valued in the hundreds of millions.

The company faces the risk of being delisted by Nasdaq. The exchange notified Reebonz that it did not meet the minimum market value of US$15 million to stay listed. Reebonz has until February 25, 2020 to change that.