Ikea's partner Ingka buys minority stake in home design startup Livspace2 min read . Updated: 20 May 2019, 08:16 PM IST
- Sources say Livspace has raised up to $15 million from the stake sale
- The round was led by TPG Growth and Goldman Sachs. Existing investors too participated in it.
Ingka Group operates 367 Ikea stores worldwide including in India, fetching 90% of Ikea’s sales. The investment was made by its arm Ingka Investments.
The company did not disclose the size of investment— Ikea’s first technology investment in India—but two people familiar with the matter said on condition of anonymity that Livspace received $10-15 million.
The company plans to use the money to develop new home interior solutions and products while expanding its offline presence, it said in a statement.
“While it is a minority stake, this is a significant investment for us," Ramakant Sharma, co-founder of Livspace said over the phone. “The idea is to collaborate on retail technology, supply chain, among many other things."
Both companies said in a statement that the strategic investment will enable knowledge sharing between Ingka, which has a strong global footprint, and Livspace, which has created an in-house home design technology platform.
It opens up opportunities for catalogue and marketplace integration, retail technology, and online-to-offline innovations, said the company.
“This investment gives us the opportunity to create one of the best omnichannel interiors and furniture purchase experience for homeowners," said Anuj Srivastava, chief executive of Livspace in a statement.
“On the other hand, interior designers and vendors can anticipate a richer design and supply experience," he said.
Ingka’s investment in Livspace comes less than a year after the Bengaluru-based company raised $70 million in a round led by private equity firms TPG Growth and Goldman Sachs. Existing investors Jungle Ventures, Bessemer Venture Partners and Helion Ventures had also participated in the round.
Livspace was launched in late 2014 by Srivastava and Sharma, former senior executives at Google (Alphabet Inc.) and Myntra Designs Pvt. Ltd, respectively. It offers a marketplace for customers to buy interior designs online from designers. It also offers software tools for designers to streamline their workflow. The company competes with Sequoia Capital-funded HomeLane, as well as bigger furniture e-retailers, Pepperfry and Urban Ladder.
An analyst tracking the space, who did not wish to be named, said this investment intends at cementing a long-term relationship between the two companies to leverage each other’s strong capabilities. While Ikea can pitch its own designs and furniture through Livspace, the latter will now have a backer with strong supply chain capabilities.