UK online retailer Sosandar thinks it can score better margins than Boohoo and Asos

The giants of e-commerce have become experts at selling catwalk looks to cash-strapped millennials online, but new entrants are looking to take advantage of gaps in the online market.

Founders of newcomer Sosandar, Ali Hall and Julie Lavington, are targeting wealthier women who have grown up buying clothes from Asos, but now want to buy higher-quality clothing.

Read more: Asos is the fairest of them all as profits more than double

Lavington says that the firm is currently matching the margins of Boohoo and Asos. However, Sosandar has only been trading for one year and has only bought small amounts from suppliers, so Lavington expects to deliver improvement on margin as the business develops.

Sosandar floats on Aim this week as part of a reverse takeover with Orogen, a former gold exploration company which is now a cash shell listed on the stock exchange.

Hall and Lavington intend to raise £5.3m with the IPO, and will spend the money on marketing, and on buying stock to broaden the website’s product range.

Read more: Boohoo co-founder cashes in for £10.7m with share sell-off

This year, Cheshire-based Sosandar is expected to make £1m in revenue, and its founders are looking to build on that success by creating TV adverts with their expanded marketing budget. And they are looking at whether they can expand overseas.

So far Sosandar’s expansion has been backed by a £2m funding round. Around 40 high-net worth investors have put in between £25,000 and £300,000 each.

The investors see a “massive opportunity” in Sosandar, Lavington says, in part due to the success of businesses such as Boohoo, but also because Sosandar is targeting more mature women. The shareholders will vote to approve the IPO on Wednesday.