Investcorp to lead $45 mn round in Wakefit at $303 mn valuation
Bengaluru-based Wakefit will use the funds mainly for expansion and to buy back employee stock options, and will also look to acquire smaller brands
Bahrain’s alternative investment firm Investcorp is set to lead a nearly $45 million round of equity funding in mattress maker and home solutions company Wakefit Innovations Pvt. Ltd, said two people aware of the potential deal.
Wakefit’s existing investors, including Sequoia Capital India, will also participate in the round, the people said requesting anonymity. The investment will be made through a primary infusion at a post money valuation of ₹2,500 crore, they added.
Bengaluru-based Wakefit will use the funds mainly for expansion and to buy back employee stock options, the people said, adding it will also look to acquire smaller brands.
Both Wakefit and Investcorp declined to comment. VCCircle reported in September that Investcorp has emerged as one of the frontrunners among a set of local and global funds to invest in Wakefit.
Wakefit was founded by Ankit Garg and Chaitanya Ramalingegowda. The startup mainly sells its products online and through e-commerce sites Amazon, Flipkart and Pepperfry. Wakefit has also gone offline with 10 stores to begin with in locations such as Delhi, Bengaluru and Lucknow.
The diversification into brick-and-mortar stores is to offer an omnichannel experience to customers. The company expects to achieve 15-20% of its business from retail stores, 50-60% from its own website and 15-20% from other sales channels.
In May, the co-founders said in an interview that Wakefit clocked a more than 50% rise in revenue to ₹636 crore in FY22, which is expected to cross ₹1,000 crore this financial year. It expects to achieve breakeven in FY24.
VCCircle also reported earlier this year that Wakefit and another venture capital-backed startup HomeLane, which counts Sequoia Capital as a common investor, are in talks for a merger to create a larger entity.
Wakefit had raised Series C funding of ₹200 crore in November last year.
India’s mattress market, which is considered highly unorganized, was until recently dominated by legacy companies such as Sleepwell, Sheela Foam and Kurl-on. A slew of startups have now entered this space, garnering investor funding to fuel their plans.
Last month, The Sleep Company, an online retailer of mattresses, received Series B funding of ₹177 crore from Premji Invest and Fireside Ventures.
In June 2022, sector-agnostic investment firm Ananta Capital took a majority stake in Springwel Mattresses Pvt. Ltd.
Duroflex Pvt. Ltd, which operates its business under two main brands Duroflex and Sleepyhead, raised $60 million from Norwest Venture Partners in November 2021.
According to analytics website Statista, India’s mattress industry was about $223.40 million in 2022, and the market is expected to grow annually by 9.79% between 2022 and 2026. However, this is minuscule compared to the size of the US market at $11.8 billion.
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First Published:6 Dec 2022, 07:26 PM IST
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