NEW DELHI & BENGALURU: WiproBSE -0.84 % Chairman Azim Premji’s family office, PremjiInvest, is in advanced talks to pick up a stake in Lenskart Solutions, which owns and operates eyewear-focused venture Lenskart, according to two people familiar with the development.
The investment by PremjiInvest is part of the new round of funding by the Delhi-based startup in a transaction pegged at Rs 200 crore, or $30 million, which also involves sale of shares by early investors in the company, these people told ET on condition of anonymity, as they are not authorised to speak to the media. The transaction is set to value Lenskart at about Rs 2,000 crore and comes three months after it mopped up Rs 400 crore, at a valuation of Rs 1,600-1,700 crore, in a round led by International Finance Corp, the private sector investment arm of the World Bank.
Venture capital firm IDG Ventures India is making a partial exit with this deal, with “multi-bagger returns”, one of the people cited above said. “The round is largely secondary in composition, with a third of it coming as a primary infusion into the company,” this person said. Avendus Capital is said to be advising Lenskart on the transaction. IDG Ventures India was the first institutional investor in Lenskart in 2011 when it led a $4-million round.
Since then it has invested across all its four rounds from its different funds. It could not be immediately ascertained if any of Lenskart’s existing investors, which includes private equity major TPG Growth and Zurich-based asset management company Adveq, are also participating in the latest round. Interestingly, in a climate where entrepreneurs are courting investors, Lenskart transaction is being driven by inbound interest.
“People want to put more money in the company, and they (PremjiInvest) come with a big chequebook. Right now is the best time is to play contrary,” said another person mentioned above. This will not be the first bet by PremjiInvest in online retail, as it picked up stakes in Snapdeal at $1-billion valuation and Myntra, striking both deals in first few months of 2014 before the market took off. While Snapdeal is valued at $6.5 billion right now, Myntra merged soon after with Flipkart, which has seen its valuation zoom up over six times after the deal to $15 billion.
Emails and text messages sent to Lenskart CEO Peyush Bansal did not elicit a response till press time. “As a policy, we don’t comment on our investments,” said Prakash Parthasarathy, chief investment officer at PremjiInvest. IDG Ventures’ Chairman Sudhir Sethi declined to comment. The back-to-back rounds of funding will make Lenskart one of the most well-funded online retailers this year with close to Rs 600 crore raised. The round will give another strong financial backer to the company, as it aggressively builds out an Omni-channel play and takes on Titan, which is also eyeing an online retail play for its eyewear business.
“If you look at Lenskart’s business model, they have expanded their offerings from selling optical devices, to selling their own branded products under a private label arrangement. Optical is a complicated market, and it was waiting to be disrupted. Lenskart’s margins are very good because they have the added advantage of manufacturing their own products,” said Harminder Sahni, managing director at consulting firm Wazir Advisors.
“It’s not just an online or a retail play, but a brand and product play,” he added.
In an earlier interview, Lenskart’s Bansal had said that the “idea is to create an eyewear brand” and it plans to open “a store in 372 towns in India who have a population of over 50,000”.
As compared to Lenskart, Titan’s eyewear business had net revenues of Rs 372 crore in FY16, with an offline presence of about 404 stores.
