Home / Companies / News /  Sheela Foam looks to buy furniture rental Furlenco

MUMBAI : Sheela Foam Ltd is in advanced talks to acquire furniture rental startup Furlenco, said three people with knowledge of the development, as the maker of the Sleepwell brand of mattresses looks to expand into newer business categories.

“The enterprise value (equity and debt) of Furlenco is being pegged at 500 crore," one of the people said.

Furlenco, which counts Lightbox Ventures and Zinnia Global Fund among its backers, has been scouting for financial investors for a while, the person added.

According to the second person, the discussions are at an advanced stage, and an announcement is likely soon “if all conditions are met". The person didn’t elaborate on the conditions.

“For Sheela, the furniture rental category opens up a lot of new business possibilities," the third person said. The company has been looking at inorganic growth opportunities in its core as well as non-core categories, the person added.

All three spoke on condition of anonymity.

In an emailed response, a spokesperson for Sheela Foam said, “We constantly keep evaluating businesses, and this is one such case. Nothing concrete." Calls and messages to Ajith Mohan Karimpana, founder and chief executive of Furlenco, went unanswered.

In 2021, the subscription-based furniture rental startup raised $140 million in a funding round led by Zinnia Global in a mix of debt and equity. In May 2022, it raised yet another round of debt funding from the revenue-based financing platform, Klub, against future recurring revenue.

Furlenco operates in the $5 billion rental furniture and appliances market and has a presence in Bengaluru, Delhi/NCR, Hyderabad, Chennai, Mumbai and Pune, among other cities. The offerings range from furniture to appliances on a monthly, half-yearly and full-yearly rental basis.

Meanwhile, Furlenco fired 180-200 employees in March last year, citing restructuring. It has also outsourced key functions such as asset management and asset collection to third parties since then. It competes with companies such as Rentomojo, Cityfurnish, Pepperfry, Rentickle, and Bhadepay, among others.

One of India’s top mattress makers, Sheela Foam listed in 2016. The company has a market cap of 11,965.93 crore as of closing on BSE on Wednesday. During the day, the stock rose 1.31% to close at 1,226.45 apiece.

Media reports said last year that Sheela Foam was looking to buy rival Kurlon Ltd in a 2,000 crore deal.

For the fiscal ended March 2022, Sheela Foam posted a revenue of 2,124.44 crore and a profit after tax of 197.31 crore.

In the September quarter, the company reported a 30.5% drop in consolidated net profit from a year ago at 53.09 crore. Consolidated net sales grew 8.1% to 722.16 crore. Earnings before interest, taxes, depreciation and amortization (Ebitda) stood at 100.79 crore in the September quarter, a 21% decline from a year earlier.

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Recommended For You
Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout