Online mattress retailer Wakefit has secured a capital of Rs 185 crore in its Series B round of funding from Belgian investor Verlinvest and existing backer Sequoia Capital India, in the backdrop of the booming digital-first brands in India. Wakefit was pegged at about Rs 1900 crore, a jump of nearly 10 times from when Sequoia first invested Rs 70 crore valuing it at Rs 210 crore in 2018.
Founded by Ankit Garg and Chaitanya Ramalingegowda told Moneycontrol, Wakefit has also ventured in manufacturing and selling furniture over the past year- a category that already accounts for 20% of its overall revenue. Despite the Coronavirus lockdown which led to months of zero revenue, Wakefit will more than double its revenue year-on-year to Rs 425-450 crore for FY21 compared to Rs 200 crore for FY20, he pointed out.
Direct-to-consumer brands such as Wakefit have been one of the biggest stories in startups the last year or so, in the backdrop of the upward graph observed in internet usage, e-commerce and demand beyond the top 8 cities. During the festive season this year, over 40% of Wakefit’s revenue was beyond the top 8 cities, compared to 30% in February.
As part of the round, Verlinvest also purchased Rs 15 crore of ESOPs from early employees, offering these employees a rare financial windfall. “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,” said Ramalingegowda.
New investor Verlinvest was conceived in 1995 as a family-owned business by the founding families of beer giant Anheuser-Busch InBev, with over a billion dollars in assets under management. Its Indian portfolio includes online learning firm Byju’s, Sula Vineyards and cosmetics brand Purplle, among others. “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, in a statement.
Indian D2C brands have raised about $1.5 billion in capital, with valuations of $12-15 billion in total, and include one unicorn — eyewear retailer Lenskart — so far.