Investor interest in Indian online mattress start-up space on the rise

Sangeetha Chengappa Bengaluru | Updated on October 02, 2019 Published on October 02, 2019

The $3 billion Indian mattress market, of which 30 per cent is organized, is growing at 10-15 per cent annually

Sleepycat raises Rs 11 crore in Series A round

Sleepycat, an online, direct-to-consumer mattress start-up has raised  ₹11 crore in a Series A round led by DSG Consumer Partners and Sharrp Ventures with participation from Gemba Capital and other angel investors.

This makes Sleepycat the second online mattress start-up in India to attract investor interest in the last  nine months. In December 2018, BusinessLine  reported that online mattress start-up Wakefit clinched its first round of external funding of  ₹65 crore from Sequoia Capital  for 31.9 per cent equity.

Meanwhile, another online mattress start-up, Sunday, is exploring a strategic partnership with a prominent US-based, listed mattress firm.

Growing market

The $3-billion Indian mattress market, of which 30 per cent is organised, is growing at 10-15 per cent annually and is estimated to grow at 20 per cent in the next few years as a whole new generation of millennials get ready to set up their homes. The market is predominantly offline and dominated by Sheela Foam (Sleepwell) and Kurlon.

Besides Wakefit, Sleepycat and Sunday, a clutch of new players have sprung up in the online mattress space, including Wink Nod, Nubliss, Durfi, Flo and Springtek, which are disrupting the traditional retail and channel-driven mattress market in India. Inspired by the runaway success of American e-commerce sleep start-ups  such as, and Tuft & Needle, these start-ups help solve a huge customer painpoint by making the entire process of buying mattresses simple and convenient.

Online biz model

Instead of being confused by mattress salesmen who throw up multiple options from coir, foam, spring or latex in various configurations with prices  ranging from  ₹5,000 up to a few lakhs of rupees, these New Age start-ups offer just two to three mattress models that are designed to suit different body types. They set clear prices, sell  them online to cut out middlemen  and ship  them free across the country  with an offer of  100-day free trial period  and full refund within 100 days.

Customers have lapped it up, as is evident from the fact that Wakefit turned profitable within six months of operations, Sunday turned profitable in 18 months and Sleepycat turned profitable in two months flat. All of them sell in upwards of 1,500 mattresses a month.

Founded by Kabir Siddiq in August 2017, Sleepycat, which sold 1,500 mattresses last month from its own website and on, offers  two kinds of mattresses – memory foam and latex foam –  at prices starting from  ₹7,800 (inclusive of tax and shipping) to  ₹22,000. It aims to sell 3,000-4,000 mattresses this month, driven by demand during the  festive season.

Expansion plans

“We are very excited to partner with DSGCP and Sharrp on this journey towards building an innovative sleep solutions company. In the last two days alone, we sold 800 mattresses,” Siddiq told BusinessLine. He said the capital raised will be invested in building the online presence of Sleepycat through channel partnerships, new product launches and building out its management team.

The profitability and growth prospects in the online mattress space has not only attracted investor interest but has also prompted large conventional players  such as Sheela Foam’s listing in 2016, followed by Duroflex raising  ₹160 crore investment late last year. The growth in the market has also prompted Amazon to enter the space under its Solimo brand and Pepperfry, which launched its private label Clouddio.

Meanwhile, ever since the US market reached saturation in the direct-to-consumer mattress space, players from the US and Europe are looking  to India as the next frontier of expansion. For instance, Emma, an online mattress brand from Europe, launched in India in 2018. The young and well-heeled glob-trotting  population, combined with the relatively low penetration of branded mattresses, makes the $3-billion Indian mattress market a happening space to watch out for.

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Published on October 02, 2019
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