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Wakefit.co, a sleep and home solutions start-up, announced its Series B fund raise of Rs 185 crore led by Verlinvest, a large European investment firm with an AUM of € 1.6 bn focusing on consumer businesses, with participation from existing investor, Sequoia Capital India.
With this fund-raise, Wakefit’s valuation shoots up to around Rs 1,900 crore up from Rs 220 crore after its first external fund raise of Rs 65 crore from Sequoia in December 2018.
As part of the funding round, the company has also instituted an ESOP buyback worth Rs 15 crore for the benefit of its early employees who have made significant sacrifices in the company’s journey. The company is also adding another 40-50 employees into the ESOP pool, for rewarding team members who provide commitment and tenure while growing with it.
Capex investment
The Series B funding builds on an exceptional year for the direct-to-consumer (D2C) company, which recently expanded its product portfolio in home solutions, after four years of successful operations in the sleep solutions space. Besides mattresses, pillows, cushions, comforters, bedsheets and bedframes, Wakefit’s new range now includes furniture including beds, sofas, wardrobes, coffee tables and other furnishings.
The investment is expected to further boost Wakefit.co’s penetration into non-metros, with additional capex investment in machinery, addition of 2,400 people across functions and factory set-ups on the cards. Technology and marketing bandwidth are also expected to see a significant boost to help capture market share in India’s thriving home and furniture market.
“The investment consolidates Wakefit.co’s position as the fastest growing D2C brand in India. Given that the company has been profitable from an early stage – a rarity in the start-up world – our focus has always been on high growth while maintaining strong business fundamentals. Our product innovation and customer centric DNA has enabled us to achieve our growth targets year on year. The latest funding round will help us touch more lives and penetrate deeper into the Indian market” Ankit Garg, co-founder and CEO, Wakefit.co told BusinessLine.
Wakefit has grown its revenue rapidly but profitably since inception, from Rs 80 crore in FY 2019 to Rs 199 crore in FY 2020, as per audited financial statements. The Series B round sets it on course to accelerate growth, with revenue targets of Rs 450 crore this fiscal and Rs 1,000 crore by FY 2023. After setting up large factories in Bengaluru, Delhi and Jodhpur, smaller factories in Hyderabad, Mumbai and Pune, and opening 17 new warehouses pan India to strengthen logistics and bolster customer experience, Wakefit will look to double down on reaching Indians in Tier 2 and 3 markets. In response to customer feedback, the company has set up five experience centres in Bengaluru, Hyderabad, Gurugram, Lucknow and Coimbatore.
From 600 employees as of March 2020, Wakefit.co will increase manpower across functions to 3,000 employees by March 2021 and has already started training programs for machine operators, carpenters and customer experience executives.
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