Sleep and home solutions company, Wakefit.co, on Tuesday said that it has raised ₹185 crores as a part of its Series B funding round led by European investment firm, Verlinvest. The round also saw participation from existing investor, Sequoia Capital India.
With the new fundraise the company will look at accelerating its growth as it looks to expand its product portfolio in home furnishings, and achieve revenue worth ₹1000 crores by 2023-fiscal.
After setting up factories in Pune, Delhi, Jodhpur, Hyderabad and Bengaluru, the company will also look to double down on reaching Indians in Tier 2 and 3 markets. The company is also expected to make capital investments in machinery, manpower addition and setting up new factories.
As a part of this expansion, Wakefit.co will also set up new experience centers in a few cities as a pilot. Over the past months, the company has expanded into home solutions and now offers furniture such as beds, sofas, wardrobes, coffee tables and other furnishing.
As part of the funding round, the company has also instituted an Employee Stock Ownership Plan (ESOP) buyback worth ₹15 crores for the benefit of its early employees. The company will also add another 40-50 employees into the ESOP pool.
“The past year has been an exceptional one for us, with customer demand evolving and growing in a completely upturned lifestyle. In order to create rapid growth opportunities in this landscape, we raised Series B funding to bolster key functions such as R&D, logistics, operations, technology and marketing. We are happy to partner with Verlinvest, which has previously invested in top unicorns in India,” said Chaitanya Ramalingegowda, director and co-founder of Wakefit.co.
According to the company, it has been profitable since inception with its revenue growing from ₹80 crore in 2018-19 fiscal to ₹199 crore in 2019-20 fiscal, as per audited financial statements.
Further, almost 30-35% of the demand for Wakefit.co comes from tier 2 and tier 3 markets. For the fiscal year ending March 2021, the company’s target is to drive 50% demand from smaller and reach an overall revenue target of ₹450 crores.
“We are excited and happy to partner with Wakefit.co and its founders in their journey to build a unique, digital-first brand in the Indian home solutions market. We now live in very interesting times in which consumer preferences and online penetration are changing rapidly and believe Wakefit has great momentum to delight Indian consumers with great quality, value for money products delivered alongside great customer experience,” said Arjun Anand, executive director at Verlinvest.
Wakefit.co will also look to increase its employee strength from 600 from earlier this year to 3000 employees by March, next year. A large part of this workforce will be machine operators, carpenters and customer experience executives.
“The home solutions segment in India is largely unorganized with a broken customer experience thereby providing an immense potential for disruption. Current tailwinds have created a systemic shift towards online shopping which offers potential for a digital first player like Wakefit.co to organize the market,” said Manvitha Janagam, investment professional, Verlinvest.
A recent report from management consultancy Redseer recently revealed that the furniture segment in India is currently worth $17 billion and is growing at a compound annual growth rate of 15-17%.
Source: Mint