Lenskart losses rise 78% in FY16
New Delhi: Losses at Lenskart Solutions Pvt. Ltd widened by 78% to Rs113 crore in 2015-16 from a year ago even as the online eyewear retailer posted a 63% jump in revenues to Rs99 crore, documents filed with Registrar of Companies (RoC) showed.
Net loss margins widened to 113% in financial year (FY) 2015-16 from 104% in FY 2014-15, documents showed, indicating the company is increasingly spending more to generate one unit of sales.
This is despite Lenskart’s expansion into the private label segment, which earns higher margins. The company has also expanded into offline space through franchise stores. According to a Mint report, as of October 2015 Lenskart had 100 such stores across 66 cities.
Formerly called Valyoo Technologies Pvt. Ltd, Lenskart sells eyeglasses, sunglasses, contact lenses and eyewear accessories. While Lenskart has a facility in Delhi to assemble spectacles, the company gets its frames manufactured in China, Korea and Italy, among others. Sale of eyeglasses contributed close to 70% of the total revenue.
Consumer e-commerce companies are characterized by high cash burn rates, where start-ups give hefty discounts and advertise heavily to boost growth. Lenskart saw its advertising and promotional expenses grow 52% to Rs58 crore for the year ending 31 March 2016.
An email sent to the firm on 2 January went unanswered.
Other Internet firms too saw their net losses rise. Mint reported in November 2016 that food delivery start-up Swiggy posted a 65-fold rise in losses for the fiscal year ended March 2016, indicating heavy cash burn and poor unit economics in food start-ups. Online fashion retailer LimeRoad too saw its losses grow threefold.
Lenskart’s cash and bank balances had fallen by 98% to Rs97 lakh in March, but a Rs400 crore series D funding was announced in May. Backed by World Bank arm IFC, Ratan Tata, Premji Invest, Infosys co-founder Kris Gopalakrishnan and IDG Ventures, among others, Lenskart has raised over $120 million since inception in 2010.
In July 2015, Lenskart had formed a wholly-owned subsidiary, Lenskart Eyetech Pvt. Ltd, through which it introduced at-home eye check up services. The filing showed that the subsidiary generated a net loss of Rs1.17 crore against a revenue of Rs40 lakh.
Mint had reported in October 2015 that Lenskart is eyeing a revenue of Rs3,000 crore by 2020, aggressively expanding its offline presence. Since then, it has grown to 250 stores across 90 cities, Peyush Bansal, co-founder of Lenskart, had said in an interview with Mint in November.