Pepperfry loss doubles despite four-fold increase in revenue
Bengaluru: Online furniture marketplace Pepperfry (Trendsutra Platform Services Pvt. Ltd) has posted a four-fold increase in revenue for the fiscal ended March 2016 over the corresponding period last year, even as losses doubled on higher advertisement spends.
The company, which is the best funded homegrown furniture e-tailer, posted revenues of Rs98 crore for the year ended 31 March 2016 as against Rs25 crore in FY15, according to a report by The Ken earlier on Friday. Losses, however, surged to Rs154 crore in FY16 as against Rs80 crore in the corresponding period last year.
The losses were mainly driven by a significant increase in advertisement spends, which increased from Rs68 crore in FY15 to Rs155 crore last fiscal. Employee expenses also increased from Rs15 crore in FY15 to Rs23.59 crore last fiscal.
Pepperfry did not immediately respond to an email seeking comment.
In September, the company raised Rs210 crore in a Series E funding round from existing investors Goldman Sachs, Bertelsmann India Investments, Norwest Venture Partners and Zodius Technology Fund. Since inception in 2011, the company has raised about $160 million from investors, almost double of the $77 million raised by closed competitor Urban Ladder.
The company plans to scale up its logistics network from the present 500 to more than 1,000 cities and open more experience centres, called Pepperfry Studios, in smaller towns and cities, co-founder and chief executive Ambareesh Murty had said during the company’s last fundraise in September.
The likes of Urban Ladder and Pepperfry compete with Homelane and Livspace, which are enticing shoppers with end-to-end home services. Urban Ladder and Pepperfry, however, have the biggest war chests.
Though furniture is a big-ticket, high-margin category—industry experts pegging gross margins at between 25% and 50%—companies in the segment face challenges around offering unique products and managing inventory.
Experts peg the Indian furniture industry at $30-35 billion.