New Delhi: Furniture retailer Urban Ladder said it raised $12 million from investors Kalaari Capital, SAIF Partners, Sequoia Capital and Steadview Capital, in what comes as the second internal round for the start-up.
Urban Ladder has been trying to raise more capital from new investors for at least six months and that it will continue approaching potential investors for capital, two people familiar with the matter said, requesting anonymity.
“So far external investor appetite hasn’t been great and they haven’t been getting the valuation they’ve been asking for, which is why they had to do an internal bridge round," one of the people mentioned above said.
Urban Ladder last raised $15 million from the same set of investors in January last year and said then it would focus on an omni-channel strategy by opening branded stores in main markets.
The company said in July it would spend $10-15 million on this.
Urban Ladder received approval to operate as a single brand retail chain last year in August. The move gave it the capability to move from a marketplace model to one where it can stack its own inventory and open stores.
In a statement on Thursday, Urban Ladder said the latest tranche of funds will support its expansion offline, which it sees as the strategy that will help the business deliver profits in the financial year 2018-19. It operates four stores across Bengaluru and Pune and expects to open 15-20 more by March 2019.
Specialty e-commerce ventures are increasing opening offline stores in order to survive against Amazon and Flipkart and boost sales growth, Mint reported in November.
“The past year has been phenomenal for us at Urban Ladder. Our offline expansion in Bangalore has been extremely well-received by customers for the differentiated furniture-shopping experience. This has energized us to chart the next course of our retail journey and build India’s largest furniture brand by March 2019," said chief executive officer Ashish Goel.
Setup up by Goel and Rajiv Srivatsa in 2012, Urban Ladder has raised $103 million to date.
Like other specialty e-commerce companies, Urban Ladder has been forced to cut losses and change its strategy after investors soured on consumer internet firms starting in late 2015. Urban Ladder’s revenues jumped almost three times to Rs95 crore in the financial year ended March 2017 while net losses were marginally down to Rs156 crore in the year under review, according to filings at the Registrar of Companies.
The firm also saw the departure of Rushabh Sanghavi, vice-president, category and sourcing, and Nikhil Ramprakash, vice-president for online sales and marketing—two senior executives who had been at Urban Ladder since the start, Mint reported in April 2017. Parag Shah, vice-president, fit-outs, urban interiors and alliances, and chief marketing officer Sanjay Gupta also resigned early last year.
In the online furniture space, Urban Ladder trails PepperFry, its closest rival which is backed by Goldman Sachs, Norwest Venture Partners and Bertelsmann India. PepperFry reported sales of Rs128 crore in the last financial year.