Time, not capital, is a disruptor: Wakefit founder Ramalingegowda
The company, which started as a direct-to-consumer player, now sells through marketplaces, quick commerce, its own website, channels, and offline stores. It has around 125 stores and plans to open another 170 over the next 12 to 18 months.
MUMBAI : Calling themselves a tech-led conventional business, Wakefit founders have transformed the mattress-making company into a full-stack furniture and home décor seller. What sets the IPO-bound company apart is that it has developed an asset-light approach to building an offline presence across key markets in India, the founders told Mint in an interview.
“I think that's the larger thing that we're trying to build. The ambition is whether we can become the Amazon of home, like Decathlon is for sports, Nykaa is for makeup. Can we become that company for home as Wakefit?" said co-founder Ankit Garg.
“We have built company-owned, company-operated stores which don’t store inventories. They are asset-light because they keep only products for display. The orders are serviced from our centralised manufacturing base once a purchase is made," said Chaitanya Ramalingegowda, promoter and executive director of Wakefit.
The company, which started as a direct-to-consumer (D2C) player, now sells through marketplaces, quick commerce, its own website, channels, and offline stores. It has around 125 stores and plans to open another 117 over the next 12 to 18 months.
- Wakefit has successfully transitioned from a D2C mattress seller to a full-stack furniture and home décor retailer.
- The company is banking on an innovative 'company-owned, company-operated' model for physical stores that only hold display products, fulfilling orders from a centralized manufacturing base to keep costs low.
- The founders view the upcoming ₹1,288.89 crore IPO as a critical step to enhance brand trust among consumers and improve the company's ability to attract high-quality talent.
- Co-founder Ramalingegowda argues that in the competitive space, the company's time-to-market and experience are a bigger competitive advantage than a rival's capital.
- Wakefit's strategy, backed by investors like Peak XV, is explicitly aimed at the Indian middle-class household, achieved through a low-cost structure that enables prices to be at least 50% cheaper than incumbents.
The founders, Ramalingegowda and Garg, wear their previous failed ventures as a badge of honour and credit those failures for their success in making Wakefit a ₹6,400 crore company today. While Ramalingegowda saw two of his previous ventures—a dating app and a women-centric community-building app—shut down, Garg, known for his expertise in foam making, worked at Akosha, a startup that eventually shut down.
Today, the ten-year-old company that both cofounded is looking to raise ₹1,288.89 crore from its public listing and has announced a price band of ₹185–195 a share. On the upper end, the company will be valued at $669 million. While Garg holds a 33.03% stake in the company, Ramalingegowda holds around 9.98%.
Public listing
The founders believe that being a listed company will help Wakefit attract the right talent and also establish a stronger brand presence. “From a consumer brand standpoint, we believe that the amount of trust that people would have in a brand if it is a public company is superior compared to a private company," Garg told Mint.
The company is not concerned about disruptions and challengers emerging in the segment. “Capital is not the disruptor. Time is. So, anybody with a huge amount of capital wants to do exactly what we have done, then time is what we have bought ourselves. So, hopefully by that time, we should innovate and have a new setup so that it's very hard (to compete)," Ramalingegowda said.
From innovating in foam mattresses, the company now offers a range of Stock Keeping Units (SKUs) across furniture, home décor, and sleep solutions. The company believes there is a significant opportunity in India and has no plans to expand overseas in the near future. “We both believe that the cost of defocusing is very high," he added. The company aims to expand its furniture business beyond the top 40-50 cities in India and its offline stores to more than 60 cities. The company will deepen its catalogue of furniture and home furnishing products.
Home ambition
The founders have cracked the code, feels Sakshi Chopra, managing director at Peak XV (formerly Sequoia Capital India). “The founders didn’t want to build for the rich households. They were very clear. They are building for the middle-class households," Chopra said in an interview with Mint. The company, says Chopra, did an excellent job of cutting out the intermediaries and was able to sell atleast 50% cheaper than the incumbents in the space.
Chopra first invested in the company in 2018 and doubled down in subsequent rounds. Today, Peak XV holds one of the largest stakes in the company after Garg with 22.47%. It is likely to take home close to ₹397 crore from the offer for sale and will sit on gains worth ₹1,368 crore at the current value.
“We helped the company largely with its strategic thinking and to help them envision growth beyond mattresses," Chopra said.
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