BackCustomFurnish raises Rs16 crore from K. Satish Reddy, others
The investments were made in personal capacity and each investor picked up small stake in the company
Premium(The funding includes `3 crore raised in debt from Small Industries Development Bank of India (Sidbi).)
Hyderabad: Hinshitsu Manufacturing Pvt. Ltd, which operates online furniture store Customfurnish.com, raised ₹ 16 crore in seed funding from a group of investors including Dr. Reddy’s Laboratories Ltd chairman K. Satish Reddy, Peepul Capital Llc founder Srini Raju, Greenko Group Plc chief executive and managing director Anil Kumar Chalamalasetty and angel investor Srini Koppolu.
The investments were made in personal capacity and each investor picked up small stake in the Hyderabad-based company, founder and chief executive officer Madhukar Gangadi said. Gangadi, who launched the website in December, retains the majority stake.
The funding includes ₹ 3 crore raised in debt from Small Industries Development Bank of India (Sidbi).
The money would be deployed to build factories across the country, to develop software and for promoting the website in newer markets.
Customfurnish allows users to customise furniture such as wardrobes, modular kitchens and sofas down to the last detail using online design software. Over time, the company will add newer categories such as bookshelves, dining tables, entertainment units, beds and office furniture, Gangadi said.
“This is as wysiwyg (what you see is what you get) as you can get," said angel investor Koppolu, who’s also the chairman of Setu Software System (P) Ltd. “Indians, by nature, want uniqueness."
Indian furnishing market is estimated at $20 billion with e-commerce furniture firms accounting for a little over ₹ 1,000 crore, according data compiled by Customfurnish. Household furniture makes for 65% of the total furniture market.
Backed by venture capital funding, Urban Ladder, Pepperfry and Fabfurnish are some of the dominant online retailers in this space in the country. But these companies offer little personalization options for the discerning buyer, Gangadi pointed out.
“E-commerce in current state cannot fulfil the demands or requirement of most people. Each person has different requirements," said Gangadi.
Customfurnish operates a 30,000 sq. ft workshop in Hyderabad, and is constructing a bigger factory spread over 60,000 sq. ft in the city. These will service Hyderabad, Bengaluru and Chennai markets apart from other towns in the vicinity of its home base.
Gangadi plans to build newer factories in Delhi and Kolkata over the next six months, followed by Mumbai. Eventually, the company is targeting 10 units across the country over the next 18 months as it attempts to widen customer base.
While it costs ₹ 5 crore to build the bigger Hyderabad factory, the smaller units across the country will entail an investment of ₹ 2-2.5 crore each, according to Gangadi.
Upon reaching certain milestones, Customfurnish will tap investors to raise ₹ 100 crore to fund expansion plans. Gangadi, who founded pharmacy chain MedPlus Health Services Pvt. Ltd that runs 1,230 stores in 12 states, expects to close the next round in next six months.
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