“With a Kogan.com partnership in place, we are confident of a successful expansion of Bitbuy into Australia,” he said.
RBC Capital Markets analyst Chami Ratnapala, who has a 12-month price target of $10 on Kogan.com, said that as part of the deal, warrants would be issued to Kogan.com entitling it to C$2.8 million ($3.07 million) in First Ledger’s equity or cash upon exercise of the warrant, within one year.
He said that in the short term, the overall deal was “relatively immaterial from a financial standpoint”, but it laid the groundwork for something more substantial.
“We think the opportunity in the partnership for future advertising revenues and also to benefit from a potential future rollout by the Canadian company by way of warrants held bodes well for Kogan,” Mr Ratnapala said.
In its regular online shopping business, Kogan.com has set up an in-house delivery service to try to limit customer frustrations over delays caused by industry-wide logjams as its main delivery operator, Australia Post, grapples with rising demand.
The new “last-mile” Kogan Delivery Services arm has been tested initially in Melbourne, Sydney and Brisbane and is now being scaled up. Customers are able to track the specific time of delivery once a vehicle leaves a warehouse.
It will supplement the Australia Post deliveries that Kogan.com will still use, but marks the first time the e-tailer has opted for a do-it-yourself approach.
It is setting up a similar in-house delivery service in New Zealand, where it owns the Mighty Ape online business. That NZ delivery business will be known as Jungle Express.