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Covid-19 has taken a toll on yet another start-up, HomeLane.com. The home interiors start-up has laid off 150 of its 1,000 employees as business has dried up.
Before the outbreak of the pandemic, the Accel Partners and Sequoia Capital-backed start-up did well, posting a 130 per cent increase in revenues to ₹230.4 crore in FY20. It was able to reduce its EBITDA loss to 35 per cent of its total revenues in FY20, compared with 53 per cent of its total revenues in FY19. While its revenue continued to see larger volumes from its core category of modular furniture, the contribution of other products and services, such as false ceiling, painting, soft furnishings, wallpaper, and wooden flooring, grew from 10 per cent in FY19 to 20 per cent in FY20.
During the lockdown, when the company’s 18 experience centres across the seven cities that it operates in remained shuttered, HomeLane managed to get more than 350 new orders, using its proprietary 3D design technology platform, SpaceCraft. With Spacecraft, HomeLane design partners met 2,500 families completely online; the latter can visualise their home interiors with live 3D designs personalised for their floor plan and ideas, and check prices instantly.
“FY20 has been a defining year for us both from a revenue growth and profitability perspective,” said Srikanth Iyer, founder CEO, HomeLane.com. “We were clocking a ₹600-crore order book (average revenue run rate) in February, and despite going completely virtual during the lockdown, we have booked 30 per cent of normal monthly sales during the period. Despite Covid-19, we are strongly positioned to get to EBITDA profitability in FY21, which is a significant landmark we are aiming for.”
“We had to lay off 150 employees, which constitutes 15 per cent of our workforce, in order to survive the pandemic. All laid off employees have been given three months’ salary. While 5 per cent of those laid off were those we had hired for growth in new cities — Vishakapatnam, Lucknow and Kochi — which will be delayed now, 10 per cent were laid off for non-performance as part of the annual appraisal cycle. In normal times, only 2 per cent of our employees are laid off for non-performance,” he said.
New markets
In FY20, HomeLane added two new markets — Kolkata and Pune — to its five existing markets, Bengaluru, Chennai, Hyderabad, Mumbai and NCR. The company’s experience centres, manufacturing and installation services are resuming in limited areas across select cities, in line with the relaxations announced by State authorities.
“A large part of the demand for our services is coming from people who have already bought apartments but have delayed moving in,” said Tanuj Choudhry, Chief Business Officer, HomeLane.com. “They are getting their interiors done because they cannot afford to pay both rent and EMI during these tough times. We also see demand for renovation/remodelling of homes in Mumbai and New Delhi-NCR. Our current focus is on ensuring that we deliver safe interiors and at a speed only we can.”
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