The online home decor and furniture businesses in India are still trying their best to grow amid this funding cruch, and take on the big boys of e-commerce — Flipkart, Amazon and Snapdeal. And to bear testimony to this regard, online furniture marketplace Pepperfry has secured about $31.5 million(or Rs. 210 crore) as part of its current round of funding.
The funding round was led by existing investors, Goldman Sachs, Norwest Venture Partners, Bertelsmann India Investments and Zodius Technology Fund. We could not pinpoint the exact uptick in the valuation of the company, but there has been a significant uprise as compared to the previous round in 2015. Pepperfry was valued at approximately $280 million(or Rs. 1,800 crore) when it gobbled up a $100 million in July last year.
This is the fifth round of funding for the furniture e-tailer, and takes the total capital raised by the company to a total of $160 million. It is almost double the total investment received by its fiercest rival Urban Ladder, which has raised about $80 million from investors — SAIF Partners, Kalaari and Sequoia Capital India.
But, the company is not done yet. Pepperfry is currently also said to be in talks with several other investors, who are interested in further backing the company. It is looking to bring in another $20(Rs. 150 crore) to $30 million(Rs. 200 crore) tranche of funding in the next four weeks, from a set of new investors.
Commenting on the usage of the influx of fresh money in expansion, CEO Ambareesh Murty says,
Ramping up our studios and expanding to 1,000 cities is the business plan for the next two years, we wanted to have capital ready as we start this expansion.
With the fresh fund in hand, Pepperfry plans to double its current reach and expand its furniture display concept stores, Pepperfry Studios beyond the metro cities. It is looking to open 20 new stores in Tier II cities. It also aims to triple its gross sales value of Rs. 1,000 crore(in March 2016), over the period of next two years.
The company is also betting on its supply chain model, which includes a collection of 17 distribution centres and a fleet of over 400 trucks across the country. Murty aspires the company to become profitable in the next six to eight months, so that they can work on the public offering of its shares to attract more money in the coming years.
Pepperfry was founded in 2012 by Ambareesh Murty and Ashish Shah as an e-commerce store for categories like home, lifestyle, fashion, etc. It later decided to change its business model from that of an aggregator to a managed marketplace. Now, it not only it sells products through its website, but also manufactures on-order products itself. The company has also employed carpenters and operates a fleet of over 350 delivery vehicles.
The latest funding round of Pepperfry is testimony to the fact that investors still believe that the online furniture business hasn’t lost its charm and can bounce back very soon. Pepperfry’s rivals UrbanLadder($3 million in debt financing) and LicSpace($15 million in third round) have recently also secured a hefty sum of money to expand their offerings and market share.
The online furniture market is expected to double from $300 million right now to $650 million by December 2017, says Murty. And Pepperfry currently has a market share of over 50 per cent, while the Indian e-commerce giants — Flipkart, Amazon, Shopclues, etc. — still account for a meager 10-15 per cent combined.