HomeLane seeks to raise up to $100 million ahead of IPO

HomeLane, an interiors solutions provider, is looking to raise $80-100 million ( ₹640-800 crore) from private equity investors, said three people aware of the matter, just months after a failed attempt at a merger with sleep solutions company Wakefit.

The capital will be raised through a mix of primary and secondary stake sales and it would value HomeLane at $600-700 million, the people cited above said, requesting anonymity.

“The valuation is at a 20% mark up to its previous valuation of $500-550 million," said one of the three people cited above.

Last year, HomeLane had raised $50 million as part of its Series E funding round led by IIFL AMC’s late-stage tech fund, Oman India Joint Investment Fund (OIJIF) and Stride Ventures.

In April, Mint was the first to report on the talks between Wakefit and HomeLane, both backed by Sequoia Capital, for a merger. The plan was to create a large entity that would dominate the market across home furnishings and home interiors, and emerge as a stronger entity for a public listing.

“However, at strategy and synergy level, the talks did not materialize and both parties called off the discussions a few months back," said the second person cited above.

Meanwhile, HomeLane has hired investment banks ICICI Securities, Axis Capital and Bank of America to advise on a proposed initial public offering that is expected to be launched by end-2023, said the first person cited above.

“The new fundraise is likely to be a pre-IPO round and will help some early investors take money off the table," the person said, adding that some of the existing investors are also likely to take part in the fundraise.

HomeLane counts Pidilite, Evolvence, NuVentures, Sequoia Capital and Accel as its investors. It has raised $104 million till date.

“The market conditions are not favourable for the company to test the IPO waters this year. It will only file documents by end of the year," said the third person cited above.

Founded in 2014 by Srikanth Iyer and Tanuj Choudhry, HomeLane provides end-to-end personalized home interior makeovers. The company has 34 experience centres across 19 cities.

Iyer, who is also the chief executive of HomeLane, declined to comment in an emailed response to queries.

HomeLane’s revenue rose to ₹271 crore in fiscal 2020-21 from ₹232 crore in the previous year, according to the latest available data from VCCEdge, the data and intelligence platform of VCCircle. Its earnings before interest, taxes, depreciation, and amortization (Ebitda) loss narrowed to ₹74.5 crore from ₹98 crore during the period.

In a 2021 interview with Mint, Iyer had said that the company was targeting a revenue of ₹2,500 crore by 2023-24.

The home interior segment in India is gaining traction among investors. In January, Livspace had raised $180 million in a new round led by private equity giant KKR, valuing the omnichannel home interiors platform at $1.2 billion.

The domestic home interiors market, currently estimated at $20-23 billion, is expected to record over 10% compound annual growth rate over the next five years, according to industry experts.