FabFurnish to raise over $50 m in fourth round of funding

Online home store FabFurnish.com is looking to raise its fourth round of funding, targeting $50 million plus led by existing investors Rocket Internet and Kinnevik as well as new investors.

The Gurgaon-based company which aspires to be the IKEA of India and has been growing at a CAGR of 400 per cent, has raised $30 million in three rounds of funding, since its inception three years ago.

“We were planning to begin the process of raising a fresh round of funding in August/September, as we raised our last round just 6 months ago. However, since we have been witnessing a lot of inbound interest from investors, we began the process much earlier and will close this round in the next 4-6 months,” Vikram Chopra, co-founder and CEO, FabFurnish.com, told BusinessLine . The monies will be used to fund the company’s plans to increase its network of warehouses and experience stores for a deeper coverage of Tier 2 cities; to ramp up its technology team with special focus on mobile solutions; and to create greater brand awareness with targeted advertising campaigns.

Chopra said close to $15 million will be spent this year on expanding its recently launched logistics arm, Fabone. Available in Delhi, Gurgaon, Noida, Faridabad, Mumbai, Pune and Bengaluru, Fabone offers specialised services where customers can avail of free expert assembly, open delivery, on-the-spot product demos and accurate package tracking.

“We plan to expand Fabone to 25 more cities in the next 9 months. Currently, we cover 40-45 per cent of our sales through our own logistics services which we would like to increase to 80 per cent by the year end,” said Chopra. To support its growth plans, the company plans to add 1,000 people across functions from sourcing, operations, technology to HR and marketing over the next 12 months.

“We will shift our technology office base to Bengaluru and ramp up the 100-strong tech team with 300 new hires. Another 300 people will be added to our warehousing and logistics teams,” said Chopra. At present the company has 300 employees across Gurgaon, Mumbai and Bengaluru.

FabFurnish generated a turnover of ₹220 crore as of December 2014 and is on track to achieve ₹600 crore by this December.

The company follows a largely inventory-led model where it stocks products unlike rival Pepperfry.com that follows a marketplace model where sellers list their products for sale on the site.

“Currently pure marketplace contributes to 30 per cent of sales; we would like to get to 50 per cent marketplace,” said Chopra.

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