Design Cafe drafts Rs 25-crore expansion, marketing plan

Home interior solutions start-up Design Cafe plans to invest ₹25 crore to expand to three cities outside its home market Bengaluru and for a brand awareness campaign, a top executive told BusinessLine.

Starting with its foray into Mumbai over the weekend, the start-up which raised $28.5 million (₹200 crore) in a Series B round from WestBridge Capital and Fireside Ventures recently, will also establish its presence in Pune and Hyderabad by March 2020.

Besides the one in Mumbai, Design Cafe has two experience centres in Bengaluru, with a third one coming up in October.

Marketing campaign

“We have allocated ₹15 crore for launches in Mumbai, Pune and Hyderabad. We have also allocated ₹10 crore for a marketing campaign in Bengaluru and Mumbai beginning this month, until January,” said Gita Ramanan, CEO and co-founder of Design Cafe.

The marketing campaign will focus on creating brand awareness primarily on digital media but will also include offline touchpoints such as hoardings and bill-boards.

AI-powered experience

Design Cafe has completed over 2,000 homes since its inception in October 2015 and 15 per cent of its customers are non-resident Indians.

It offers customers an AI enabled Virtual Reality experience to give them a 360 degree perspective of their home before finalising the design.

Homes are fitted out and delivered within 90 days, from furniture and lights to the kitchen sink.

“The online home interiors industry is doing well and is a 40-50 per cent margin business. Our average order size is ₹9.5 lakh and we take 25-30 per cent of the total order value as our fee. We aspire to be a one-stop design-led home interiors solutions provider and are two years away from achieving this,” said Ramanan.

Revenue target

The start-up, which achieved ₹40 crore revenue in FY 2019, is targeting ₹100 crore by March 2020.

It competes with local contractors and other start-ups like Livspace and HomeLane.