Online furniture retailer Brosa is up for sale after the company was placed under voluntary management this week.

KordaMentha’s Richard Tucker and Michael Korda were appointed as volunteer trustees of the 8-year-old e-commerce company, which raised more than $7 million in venture capital from the likes of Airtree and ASX-listed Bailador Technology Investments.

As Bailador revalued its investment in Brosa last year by 49% ($1.5 million) to $4.5 million “to reflect its strong operating performance over the previous 12 months,” a red flag of investment problems emerged in a shareholder update released on December 8, when it was written down to $0. Bailador did not comment on reasons why, other than citing “a valuation determined by us based on our knowledge of the company,” said it took place over the past six months.

Two years of pandemic lockdowns have benefited the online furniture retailer, which has grown rapidly over the past two years. But that came to an abrupt end in 2022.

KordaMentha’s Richard Tucker still sees potential in Brosa under new owners.

“The company faced challenges as sales fell after COVID-19 restrictions were lifted. This caused short-term cash flow pressure after a period of phenomenal growth,” he said.

“KordaMentha is seeking urgent expressions of interest in selling Brosa as a going concern. The company tripled in size during the pandemic and developed a strong customer base and technology capabilities that would be an asset to many other furniture retailers. I expect there will be strong interest in the Brosa business.”

The Melbourne start-up was founded in 2014 by Ivan Lim and Richard Li after Lim moved into a new home and wondered why the markups were so high while shopping for furniture.

It raised $2 million from AirTree Ventures in 2015, and then another $5 million in a Series B in 2017 backed by AirTree, BMY Group, and Bailador.

Last year, the company opened physical stores in Rosebery, an industrial suburb of Sydney, and Fitroy in Melbourne. They continue to trade and existing flooring stock is being sold at discounts of up to 60%.

“The company was on a campaign to reduce its inventories and refocus as a make-to-order company,” said Richard Tucker.

“We intend to continue this process to clear inventory. If you’re looking for a new sofa or other stylish furniture in the run up to Christmas, visit the website for a great deal.

Potential purchasers of the brand may submit their expressions of interest to KordaMentha’s Mitchell Banks via email: [email protected]