Livspace raises Rs100 crore from existing investors
The investment in Livspace comes at a time when venture capital investment in India plummeted 58% in the June quarter over the previous three-month period
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Bengaluru: Online home design start-up Livspace, which is run by Home Interior Designs E-commerce Pvt. Ltd, has raised Rs.100 crore from existing investors Bessemer Venture Partners, Jungle Ventures and Helion Venture Partners.
Bessemer Venture Partners has led the round, according to Anuj Srivastava, co-founder and chief executive of Livspace.
The company was founded by Srivastava and Ramakant Sharma, former senior executives at Google (Alphabet Inc.) and Myntra Designs Pvt. Ltd, respectively, along with Shagufta Anurag, founder of architectural design consultancy Space Matrix.
Livspace has already raised about $12.6 million in two rounds between December 2014 and August 2015 from Helion Venture Partners, Bessemer Venture Partners and Jungle Ventures.
The company will invest in building brick and mortar centres in Bengaluru, Delhi and Mumbai, which will serve as a hub where consumers can meet designers as well as experience centres to showcase products.
Livspace offers home interior design solutions and sells furniture across categories such as living, dining and bedroom. The company also runs a modular kitchen and wardrobe business. “We’ll look at expanding our catalog in the full home design and modular areas. We could also look at home automation and white goods, besides investing in experiential technology like augmented reality, virtual reality and beyond,” said Srivastava.
Livspace has acquired three start-ups in quick succession to fuel growth. In September 2015, it acquired YoFloor, a mobile platform that offers a virtual trial room for home design. In May last year, Livspace bought Dwll, a curated online network of online designers. In March 2015, the firm acquired DezignUP, an online community and marketplace for designers and consumers.
The firm, which has a monthly revenue of about Rs. 10-12 crore, aims to hit an annualized revenue run rate of Rs.200 crore by March next year, Srivastava said.
“We believe that full home design is a metro city business, but modular furniture is a larger opportunity. There have been two primary sources of growth in the last six months. One is the modular business. And then, the home design automation, which has increased productivity,” he added.
Livspace essentially competes with the likes of Sequoia Capital-backed HomeLane (Homevista Décor and Furnishing Pvt. Ltd), other than Urban Ladder Home Décor Solutions Pvt. Ltd, another Sequoia portfolio and Pepperfry (Trendsutra Platform Services Pvt. Ltd), backed by Goldman Sachs Group Inc.
Urban Ladder, which has so far raised about $77 million from venture capital firms, and Pepperfry, the most well-capitalized online furniture store with about $128 million in funding, initially started out by selling furniture.
Both the firms, however, have launched home interior solutions, modular furniture and kitchen in the last 12-15 months to compete with younger rivals like HomeLane and Livspace.
The investment in Livspace comes at a time when Venture capital investment in the country plummeted 58% in the June quarter over the previous three-month period, according to a report by consultancy KPMG and CB Insights, mirroring increasing investor caution towards funding start-ups.
Venture capital firms ploughed $583 million into India in the April-June period, down from $1.4 billion in January-March, said the report.
Venture capital investments in India have been on a decline since October-December. Investments in the December quarter halved to $1.5 billion from $2.9 billion in July-September.
Not only this, the number of large deals has also shrunk.
According to start-up tracker Tracxn, there were 72 deals more than $20 million in 2015. The number of such deals in 2016 stands at 30.
The online furniture segment has barely seen any big ticket investment in the last 12 months. Among the bigger start-ups, Pepperfry last raised $100 million in July 2015, while Urban Ladder mopped up $50 million in April last year. Urban Ladder raised debt capital of $3 million from Trifecta Capital, Mint reported on 24 August.
Livspace’s funding round is part of a growing trend of investors funding their existing portfolio investments without getting an external investor. Typically, new investors enter start-ups in each successive funding round.
However, over the past nine months or so, some investors have soured on Indian start-ups, forcing VC firms to keep funding those existing investments in their portfolios that they believe are good bets.