Infant formula and goat dairy products supplier Bubs Australia expects to use some of the money raised from a significantly oversubscribed share offer to develop the growing market in China.
Bubs has raised $40 million from a placement of 53.5 million new shares at 75 cents each.
"The proceeds of the placement will be used to enhance the company's financial flexibility and provide working capital to support new strategic opportunities and growth momentum, particularly in relation to China market development," Bubs said on Monday.
Earlier in June, Bubs secured a deal to sell its products on China's largest e-commerce platform, Alibaba.
Alibaba has 580 million monthly users across its apps.
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Also, Bubs has agreed to supply China-based New Times Asia in a deal that more than doubles its annual sales revenue, and has applied for the licence it needs to sell Chinese-labelled products in stores in China.
Funds from the share placement will also be used for marketing, product development, and to start goat whey processing.
Bubs acquired NuLac Foods in December 2017, making it the largest producer of goat dairy products in Australia.
Bubs chairman Dennis Lin said said the company was very pleased with the capital raising.
"The oversubscription is a terrific vote of continuing confidence in the Bubs vision and the progress we are making to realise our focus on the immense Asia market for premium goat milk infant formula... as well as satisfying continued growth in domestic demand and representation," he said.
Bubs shares were 7.5 cents, or 8.4 per cent, lower at 82 cents at 1038 AEST, after coming out of a trading halt.
