Urban Ladder in talks for up to Rs200 crore fundraising
Urban Ladder’s existing investors Kalaari Capital, SAIF Partners, Sequoia Capital are likely to pool in Rs100 crore, rest will come from a new investor
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Bengaluru: Online furniture store Urban Ladder Home Décor Solutions Pvt. Ltd is in advanced talks with existing and new investors to raise $25-30 million (Rs170-200 crore) , a move that will give it the firepower to fend off competition from Pepperfry and Livspace, as well as fund its offline foray.
Existing investors Kalaari Capital, SAIF Partners and Sequoia Capital are likely to pool in about Rs100 crore, while the rest will be invested by one new investor, said two people aware of the development on condition of anonymity.
“The existing investors had already committed about Rs100 crore to fund the offline expansion. The company is getting one new investor on board in this round who will invest another Rs100 crore,” added one of the two.
Mint could not ascertain the name of the new investor.
Urban Ladder declined to comment on the fundraise.
Founded in 2012 by Indian Institute of Management Bangalore alumni Ashish Goel and Rajiv Srivatsa, Urban Ladder has so far raised $77 million in equity funding from Kalaari Capital, Sequoia Capital, SAIF Partners, Steadview Capital, TR Capital and Tata Sons interim chairman Ratan Tata, and $3 million in venture debt from Trifecta Capital.
The company’s last equity funding was a $50 million round in April 2015.
Urban Ladder has launched a new brand identity and is on course to widen offline distribution channels beyond company-owned centres. It plans to launch at least three experience centres in Bengaluru, and is exploring partnerships with large format retail stores.
Urban Ladder also has its eye on local furniture stores, where it might take the assisted commerce route through kiosks displaying the Urban Ladder catalogue. It will also explore partnerships with paints and white goods appliances brands among others, which may involve cross-selling, Mint reported on 26 October.
Goel told Mint in an interview in October that Urban Ladder has trimmed the number of products sold on its platform from about 5,000 a year ago to about 4,000 and aims to prune the list further to about 3,000-3,500 units in another 12 months, a move that he says would give the firm more bandwidth to focus on quality and customer service.
The company has also listed its products on online marketplaces Amazon and Flipkart, which, industry experts say, signals stunted growth.
According to documents available with the Registrar of Companies (RoC), Urban Ladder posted a threefold increase in losses for the year ended 31 March 2016 on account of higher employee and advertising expenses, while revenue from operations increased about two-and-a-half times.
Revenue from operations for the last fiscal year stood at Rs34.4 crore as against Rs13 crore in the previous fiscal, while losses surged to Rs181.3 crore against Rs58.5 crore a year earlier.
Urban Ladder competes with the Goldman Sachs-backed Pepperfry (Trendsutra Platform Services Pvt. Ltd) and Bessemer Venture Partners and Jungle Ventures-backed Livspace (Home Interior Design E-commerce Pvt. Ltd).
Pepperfry, the most well-funded home-grown online furniture start-up with $159 million in funding, posted higher revenues and lower losses than Urban Ladder in 2015-16. According to documents available with the RoC, Pepperfry posted revenue of Rs98 crore last fiscal, a four-fold increase from Rs25 crore in the year-ago period, while losses stood at Rs154 crore, as against Rs80 crore in 2014-15.