Tint 2023
- Type: Retail
- Total Round Size (min): AUD$10,200
- Total Round Size (max): AUD$999,998
- Price per share: AUD$4.57
Tint
This private Offer is open to existing investors in Palette Pty Ltd, the parent holding company to the commercial business Tint and technology business Palette. It is the entity that is raising capital in this round.
This raise is a bridging round that will assist Tint in achieving a significant milestone of being cash flow break-even from March 2023 onwards following the management team's efforts to right-size the business. The funds raised will provide a cash buffer to protect the business from any unforeseen changes to trading conditions over the course of 2023.
Whilst the Company has continued to grow strongly since its last capital raise, in recognition of the macro environment and in order to provide an attractive proposition for existing investors, this Offer is made at a discount to the raise in 2021.
The company is targeting a $300,000 raise but will take up to $1m should there be excess demand. As such, the maximum fundraising target for the raise has been set at just under $1m. The minimum fundraising target for the Offer is $10,200.
No additional Investor Rewards are being offered as part of this Offer.
- Fees Paid by Issuer: 6%
- Cooling Off Rights: 5 working days
- Security Type: Fully Paid Ordinary Shares
- Minimum Parcel SIze: $502.70
Terms of Offer
Key Documents
What is Tint?
Tint is an online paint brand on a mission to create healthier and more colourful spaces by making paint more accessible in the most sustainable way possible.
The outdated $2.8bn Australian paint and home decoration industry was ripe for disruption, so we took the opportunity to renovate how we decorate. Tint’s fresh take on shopping for paint includes a modern customer experience, premium eco-friendly paints at fair prices, and a commitment to the planet to ensure our only impact is on your walls.
So what does a modern, sustainable paint brand look like?
Our passion for healthy homes starts with our premium eco-friendly paints and supplies. Our range is water-based, odour-free, vegan, and certified low-VOC. We also run Tint on 100% renewable energy and plant a tree for every can of paint we sell.
Tint also takes the pain out of shopping for paint with a curated range of 72 colours, replacing sample pots with giant peel-and-stick swatches, a simple range of paints and tools for your entire home, and free access to expert customer support and interior stylists to help you create a space you’ll love. We ship all our orders with express delivery straight to your door.
Tint’s unique advantage is Palette, our proprietary tech business which has provided digital colour solutions to global paint brands since 2013. Palette provides Tint with portable colour readers, an AR colour visualisation app, and a paint manufacturing and fulfilment platform that allows us to efficiently scale the business without large capital expenses.
Investment Highlights
- Customers Love Tint
We have simplified the painting process, by refining product choice around customer needs, leveraging our proprietary colour-matching technology, and providing inspiring and educational content from our community of decorators. This is reflected in our customer reviews, with a rating of 4.91/5 from over 2,000 reviews and us having an industry leading Net Promoter Score (NPS) of 85.
- Strong Financial Growth
We have generated $4.3m in revenue since launch in March 2020, with $2m coming in FY22. This is up 46% YoY and up 150% since FY20. Gross margins continue to grow YoY and are now sitting at 70%. Similarly, our customer retention has continue to improve demonstrating the value we are delivering to customers. Our retention rate is now at 36%, up 56% YoY.
- Sustainable from the ground up
Tint produces a range of premium eco-friendly vegan paint that is water-based, odour-free and absolutely devoid from animal cruelty or by-products. Our specially formulated paints are sustainable, being more than 99% free from the high levels of air-polluting VOCs that are commonly found in paint products, and we offer eco-friendly packaging at check-out. We also run Tint on 100% renewable energy, and we plant a tree for every can we sell. Finally, we also use 100% recyclable packaging and samples. With Tint, being colourful has never been so green.
- Proprietary technology arm
Since 2013, Tint’s complementary technology business, Palette, has been a world-leader in digital colour technology. Palette’s revenue is primarily driven by sales of its portable colour readers that allow users to scan and match colours in the environment, such as the surrounding furniture and decorations. Prior to COVID, Palette was generating annualised A$1.0m in sales (20% of the Group) at a 75% gross margin, from a broad customer base including textiles to paints. It is now starting to recover to pre-COVID levels.
Palette has over 30,000 devices in use by professional painters and designers around the world, generating over 100,000 colour scans every month. This creates an unprecedented technology advantage for Tint in the paints and home decoration industry, and improves the DIY customer experience, reimagining the way the industry operates.
Team
For detail on key team members see section 2.5 of the Offer Document.
Key Financials
See section 2.8 of the Offer Document for further detail
Key Risks
For further detail on risk mitigation see section 2.9.2 of the Offer Document.
Any activities that negatively impact the brand may result in worsening brand perceptions, loss of customers, and disengagement, reducing Tint’s value proposition and reducing sales.
There is a risk that we may lose key supply agreements. Likewise, with current global supply chain and delivery constraints, Tint may not be able to receive stock from overseas suppliers on time. This may result in significant delays or cause certain products to go out of stock, potentially impacting Tint’s ability to grow sales.
If large incumbent players begin aggressively expanding online, this may create competitive pressures, impacting Tint’s ability to grow. Likewise, other online D2C paint companies such as Lick or Gush may enter the Australian market, resulting in IP considerations and competition, diluting brand differentiation and increasing consumer choice. As such, Tint’s sales may be negatively impacted
Tint leverages its proprietary digital colour technology to enhance its value proposition and help the brand scale. If there are any incidents that compromises the operations and usage of the technology, such as a data breach or server crash, this will negatively impact Tint’s ability to process orders, its brand and customer trust. This may reduce sales.
Tint’s proprietary digital colour technology is a trade secret, and is not patented. This exposes Tint to IP risk, as it does not have the legally enforceable right of a patent to sue any imitators of Tint’s technology.
Tint operates in the home and garden retail market, which may be adversely impacted by interest rate increases and an associated reduction in household spending on non-essential maintenance and home improvement purchases. As a result, Tint may experience addressable market contraction, and a slow down of sales.