- Type: Retail
- Total Round Size (min): AUD$499,998
- Price per share: AUD$8.85
Tint is now accepting investments!
Note: Palette Pty Ltd is the parent holding company to Tint, our online direct-to-consumer paint business, and Palette, our digital colour technology business. It is the entity that is raising capital in this round.
- Fees Paid by Issuer: 6% of funds raised
- Cooling-Off Rights: 5 working days
- Minimum Parcel Size: $247.80
All investors will receive a 10% lifetime discount across Tint products. For more information please see section 3.2 of the Offer Document.
What is Tint?
Tint is an online paint brand on a mission to create healthier and more colourful spaces. We’re focused on making painting more accessible and sustainable than ever before.
The outdated $2.5b Australian paint and home decoration industry is ripe for disruption, so we took the opportunity to renovate how we decorate.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.
Since launching 18 months ago, over 20,000 Australians have rolled with Tint, with annualised sales approaching $5m and our average review scoring us 4.91-stars. We’re also proud that 15% of our sales are from high-volume/high-frequency trade painters, with more joining us each day.
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, enough to cover one Sydney Harbour Bridge in the last month alone. With Tint, being colourful has never been so green.
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 technology 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.
To accelerate our next stage of growth, we’re raising funds to scale our new fulfilment centres nationally, increase our brand awareness, grow our trade customer base, and expand into new product categories that are already in the pipeline like window and wall furnishings.
"With Tint, you can refresh and enjoy your new space without getting lost in thousands of colour options or endless trips to a hardware store. We’ve really focused on making it as easy as possible to fall in love with your home again"
- Disrupting the outdated paints and home decoration industry
The Australian DIY paints and home decoration market has not kept up with the times, and depends on a frustrating offline customer experience. Legacy brands rely on warehouse-style hardware stores where customers can easily be overwhelmed with too many product options, and underwhelmed by the lack of guidance. Tint’s decorator-friendly approach and proprietary technology have created a new way to shop for paint that is online, convenient and easy.
- Proven business model putting customer experience first
We make painting fun, simple and rewarding by offering a streamlined product and colour range, leveraging our proprietary colour technology, and inspiring and educating our rapidly growing community of decorators with high-quality content. Our approach is having a profound impact, with an industry-leading response from our customers — our average review is 4.91 stars, and our Net Promoter Score (NPS) is 86.
- Impressive financial performance to date
In just 18 months, we’re approaching $5.0m in annualised sales and growing at 587% CAGR. Tint has seen a significant uptake from trade painters, with trade making up 15% of sales, up from 5% just twelve months ago. Likewise, we have identified other complementary home decoration categories to expand into, such as window coverings, providing a clear trajectory for further growth within the space.
- Achieving economies of scale through supply chain innovation and a highly scalable operating model
We have achieved up to 65% contribution margins* on our products thanks to our in-house paint fulfilment solution. Our just-in-time tinting allows us to prepare all orders on demand, eliminating dead-stock and reducing working capital. Our primary facility in Melbourne has capacity to process up to 12,500 litres of paint per month, per shift. We are also actively expanding our fulfilment network to allow for faster and cheaper last-mile deliveries nationally, with plans to open a new site in Sydney Q3FY22. As we grow our fulfilment network and paint production capabilities, we will gradually unlock greater economies of scale.
*Pre-freight margin that includes all the variable costs associated with making a product ready for dispatch or pick up.
- Building a sustainable brand to ensure our only impact is on your walls
We’re motivated to make being colourful as green as possible. Tint’s range of premium paints are water-based, odour-free and vegan. They’re also more than 99% VOC-free, and we plant a tree for every can of paint we sell, with enough trees planted in October to cover two Sydney Harbour Bridges. We’re also proud that we run all of Tint’s operations, including fulfilment, on 100% renewable energy. With Tint, being colourful has never been so green.
- Supported by a revenue-generating proprietary technology arm
Through our technology arm, Palette, we have supplied the global paint industry with our proprietary colour technology since 2013. Palette’s revenue is primarily driven by sales of our colour readers, and today we count 30,000 active users globally who generate over 100,000 colour scans every month. Prior to COVID, Palette was generating annualised sales of $1.0m at up to 75% gross margins. It is now starting to recover to pre-COVID levels, and we are in pre-production for our next generation colour reader.
Palette’s proprietary technology and paint industry experience creates an unprecedented and defensible technology advantage for Tint.
- Experienced management team with backing from distinguished investors (some of whom are re-investing in this round)
The founders, DJ Dikic (CEO) and Rocky Liang (CTO), have deep expertise in design and engineering, and have successfully scaled Palette as a global technology business since 2013. Our Chairman, Adam Lewis, is the former McKinsey ANZ MD and former Aconex chairman. The company has received $4.6m in backing from reputable investors including Aconex Co-Founders Rob Phillpott and Leigh Jasper; founder of PE firm BGH Capital, Ben Gray; and Bellroy Co-Founder Lina Calabria.
- Multiple Growth Paths to Exit
Although our immediate focus is on scaling the business and consolidating our leadership position in the online home decoration market, Tint has a number of potential exit options for investors. Currently, no paint brand is listed on the Australian Stock Exchange (ASX), and given the Home D2C market has seen significant success in Australia with brands like Koala and Temple & Webster experiencing further up-rounds and even an ASX listing, we believe a listing opportunity exists for the business. Likewise, legacy paint brands or retailers seeking to on-board Tint’s unique position in the D2C online space and our proprietary technology advantage may be potential acquirers.
The $2.5b Australian paint and home decorating market is a legacy industry with an outdated and primarily offline customer experience. Paint brands rely on warehouse-style hardware retailers to serve their end customers. In these offline retail settings, customers can easily be overwhelmed with too many colour and paint options, and underwhelmed by the lack of guidance and support.
Despite increasing pressure on the industry to move online in the post-COVID world, online is estimated to represent as little as 2-4% of the US$80b global paint and home decor industry, far below general retail online adoption of 20%.
Legacy paint brands & retailers face significant challenges to moving online:
Paint brands have struggled to go online due to their reliance on legacy retailers (who own the end-consumer), while retailers remain protective of store-based shopping behaviours.
2. Institutional barriers
Legacy players are not structured to aggressively target online as a direct online sales channel would cannibalise sales from their existing departments.
3. Limited technical expertise
Legacy players rely on external agency suppliers for technical services with limited internal capacity for technology or digital customer experience development.
4. Lack of conviction in online
Historically low online adoption makes it difficult for legacy players to ‘build the business case’ for targeting online.
Creating an outdated shopping experience:
1. Too far away
Hardware stores are often located far away from shoppers and require multiple trips to finalise purchase decisions.
2. Decision fatigue
Shoppers are overwhelmed by a huge range of colours and products that leave them feeling confused and unsure about their choices. Paralysis by analysis prevents many from even starting.
3. Too big
Designed to keep you shopping, warehouse-style stores make it hard to quickly find the products you’re looking for.
4. No support
Retail staff lack specific product knowledge, making it hard for shoppers to make fully-informed decisions across a huge range of product options.
This outdated experience has opened up a significant opportunity for Tint and a small number of other successful digitally-native attacker brands to pioneer an online approach, including Lick (UK), Backdrop (USA) and Gush (Singapore).
The Tint Difference
Tint makes it easy to get colourful by focusing on an amazing online shopping experience.
1. Streamlined product range
Our streamlined, healthy and eco-friendly product range makes it easy to get rolling on your next project.
2. Seamless shopping
Our seamless shopping experience guides you from colour selection to product application, every step of the way. We even ship straight to your door with free express delivery.
3. Content that inspires & educates
From da Vincis to da newbies, we empower everyone to get rolling with handy how-to guides and inspiring interviews, spaces and projects.
4. Support at every stage of the journey
We make great support a core part of Tint, with freely available Tint Stylists who help you pick the perfect palette for your space, and an expert customer support team that actually cares about your project.
5. Passionate community
Our growing community of decorators inspire others to pick up a brush by sharing their own projects and spaces.
Core Business Model
Tint uses the Direct to Consumer (D2C) model to directly service customers via our website and app. The D2C model allows us to tightly control our customer experience and ensure our shopping journey is streamlined, easy, and efficient. It also allows us to improve our customer experience over time by directly collecting data and feedback from existing customers.
The D2C model also allows us to negate costs associated with wholesale distribution networks and grow our profit margins directly as the value we deliver to our customers increases. We are able to better control product quality and fulfilment given we control the entire experience from order to delivery.
Our primary revenue driver is sales volume, but we also have the flexibility to increase pricing as we have done twice in the last 12 months. We expect to improve our margins through supplier volume discounts and increased operational efficiencies as we continue to scale.
Retail (DIY) sales comprise 85% of revenue, and our growing commercial (trade) business comprises 15% of sales. Our trade customers receive a 10% discount, but order higher volumes.
Palette uses a D2C model to directly service customers through Palette’s website and apps, and a business-to-business (B2B) model to supply our global distributors and paint partners.
Palette’s proprietary online paint fulfilment platform also provides us with the option to pursue a unique SAAS business model, where we would licence usage of our technology to other paint companies and book order processing fees per order. We believe this may significantly accelerate online adoption within the global paint industry.
Tint’s core strategy is to disrupt the outdated paints and home decorating industry and take market share from legacy brands. With COVID-tailwinds accelerating online adoption across all retail categories, and increased spending on home & garden categories in particular, Tint is well-positioned to further grow our traction with DIY and trade customers and maintain our dominant online position in the Australian market.
Our model has had great success to date as we approach $5mn in annualised sales within 18 months. Our existing customers continue to shop with us, while newer customers start their Tint journey with higher average order value (AOV), indicating that our lifetime value metrics are likely to continue to rise over time.
In addition to driving growing awareness in the broader market, we aim to increase AOV and customer lifetime value (LTV) by expanding our product range to new categories.
Our core strategy is focused on the following key pillars:
- Increased Marketing Efforts
We are supercharging our content flywheel with inspiring and educational content to engage our customer base, and are increasing our partnerships to drive further brand awareness.
- New Product Categories
We are expanding our product offering into new and complementary categories to increase average order value and customer lifetime values, as well as purchase frequency.
- Geographic Expansion
We are completing our national fulfilment site rollout to grow our local market share. With immediate plans to expand into Sydney (Q3 FY22), then progressively into Brisbane, Perth and Adelaide, we expect to significantly improve delivery times, lower freight costs, and increase conversion rates over time — particularly for Tint Pro customers.
- Growing the Trade Business
Our members-only trade perks program and curated colour and high-quality products will continue to incentivise adoption amongst trade customers. Our expanding fulfilment footprint will accelerate this adoption, and we will leverage our proprietary colour technology to retain them. Our trade customers have significantly higher average order values (5x DIY), order frequency, and lifetime values (LTV).
The Australian decorative and speciality paint industry is valued at $1.6b (of the $2.5b total paint and home decoration market), and is expected to grow at an annualised 5.7% per annum over the next 5 years. It is dominated by incumbent multinationals, with key players in Australia including Dulux (owned by Nippon Paint), Taubmans (owned by PPG Industries), Wattyl (owned by Hempel). The industry is reliant on demand from households, painters, and decorators, with sales split approximately 50:50 between DIY and trade. Australians have traditionally bought paints and home hardware goods at big-box retailers such as Bunnings and Mitre 10, as well as a long tail of small independent stores. For the reasons highlighted in Section 2.3, we believe these legacy players are limited in their ability to compete with Tint.
The onset of COVID-19 prevented many customers from physically purchasing paint from these stores, and also saw people spending more time at home, driving online adoption for home and garden products. Australia’s eCommerce market is valued at US$25.7b and is expected to grow at a CAGR of 15.5% through to 2024. In comparison, the bricks and mortar retail market will only grow at a CAGR of 3.4% over the same period. The increasing online adoption of home product categories has seen the emergence of digitally-native brands like Koala, who successfully disrupted the traditional mattress and furniture retailer model by making the customer experience as convenient and frictionless as possible.
The D2C model for paints and home interiors is seeing traction in other markets such as the UK and US, with recent entrants such as Lick, (UK), Coat (UK), Clare (US) and Backdrop (US) gaining momentum and appealing to more digitally-native customers who are looking for greater convenience and a frictionless shopping experience. They have been successful in taking market share within their respective geographical markets, however we are confident that Australia is not yet a target market for them. We also firmly believe our proprietary technology gives us a competitive edge over these brands.
They have also seen attention from investors and trade acquirors, with Lick and Coat seeing PE and VC investment (raising over £16m in 2021 alone), and Backdrop being acquired by an incumbent.
In Australia, the total addressable market for Tint is A$2.5b. We aim to address the decorator’s whole home, providing a significant opportunity for Tint to realise further growth.
Underlying drivers of growth for this market includes millennials entering the renovation market, new technology allowing for superior shopping experiences, the proliferation of rapid delivery options and online shopping, and usage of social media as the start of the inspiration and buying journey.
Why Equity Crowdfunding?
The company’s mission is to make colour accessible. Since day one, Tint has been supported by a community of customers and decorators, who have shared and inspired others with their personal painting journey. We have chosen to raise capital through equity crowdfunding to give our community and key stakeholders a chance to be part of our growth journey. We see this as an opportunity to give back to our loyal community as we celebrate our future successes together.
As Tint was formed with the goal of making painting accessible and sustainable, letting our early supporters become co-owners of the business at this stage just made perfect sense. We will continue to uphold our core values and remain community-focused.
We hope to see you join our colourful Tint community!
Key Team Members
Adam Lewis spent 20 years at McKinsey & Company, advising major enterprises and governments around the world. A partner at the firm for 14 years, he had a wide ranging client portfolio across a range of industries and in the last 7 years was the managing partner of McKinsey in Australia and New Zealand. He was a member of the Firm’s Asia council and global Senior Partner election committee. Since leaving McKinsey 2010, Adam has become an investor and advisor to a range of technology-related growth firms. He was Chairman of Aconex Limited and Message Media Pty Ltd and is currently Chairman of Southern Innovation, Deliciou and Deep Blue Company. He is also a Board member of the State Library of Victoria. Adam holds an MBA from the University of Illinois and a B.Eng (electronics) from Curtin University of Technology.
CEO DJ Dikic co-founded Palette in 2013 with CTO Rocky Liang. Together they have generated almost $9mn in lifetime revenue for the business. DJ’s principal responsibilities as CEO consist of overseeing the Company’s vision, strategy, and growth. He is the recipient of multiple design awards, including the Good Design Award and the Melbourne Design Award. DJ holds a B.Eng (electronics) and B.Arts from the University of Melbourne.
CTO Rocky Liang co-founded Palette in 2013 with CEO DJ. Rocky oversees the Company’s research and development activities and financial accounts, in addition to being the Company’s key manufacturing liaison. He has been a Director since July 2013. Prior to that he was a research graduate at The University of Melbourne. Rocky holds a M.Phil (Eng) from the University of Melbourne.
For more information please see section 2.12 of the Offer Document.
Use of Funds
For more information please see section 3.3 of the Offer Document.
Key Risks Facing the Business
For more information please see section 2.14 of the Offer Document.
Tint’s brand is centred around creating more colourful spaces by making painting accessible to more people than ever before, in the most sustainable way possible. This has resulted in a strong community and following. 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.
Currently, we can process up to 12,500L of paint per month. In the event there is higher than expected demand, Tint may be unable to process orders in a timely manner, dissuading customers from shopping with Tint again.
Tint has a 3 year manufacturing contract with a leading Australian paint company for the supply of our paints. There is a risk that we may lose this supply agreement. 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.
Tint is currently the market leader in the Australian online D2C paint market. A majority of market share is occupied by large incumbents such as Dulux and Wattyl who rely on third party brick and mortar sales. If any of the incumbents begin expanding their offerings 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.