Online furniture retailer Urban Ladder has raised $12 Mn in a fresh round of funding led by the existing investors, as per MCA filings accessed by Inc42.
Sequoia Capital, SAIF Partners and Kalaari capital led the Series E1 funding round in the startup, raising the total funding in Urban Ladder till date to $106.87 Mn.
In response to an email query by Inc42, the company spokesperson stated that these funds will be used to further Urban Ladder’s omnichannel expansion, online and offline – a decisive step towards profitability in FY 18-19.
Urban Ladder recently gained attention as it announced ESOP plans for the company’s senior executives. The company also received a Single Brand Retail Trade (SBRT) licence from the Department of Industrial Policy & Promotion (DIPP).
Last year, it also announced a shift in its business model from online retail to a furniture brand. Urban Ladder launched its first experience centre in Bengaluru last year, which was to be converted into an offline retail store. The founders also raised $15 Mn in February 2017, from Kalaari, SAIF and others.
“The past year has been phenomenal for us at Urban Ladder. Our offline expansion in Bengaluru has been extremely well-received by customers for the differentiated furniture-shopping experience. This has energized us to chart the next course of our retail journey and build India’s largest furniture brand by March 2019,” said Ashish Goel, CEO and Co-Founder, Urban Ladder.
This growth has been encouraged by the government’s introduction of GST, the SBRT licence approval, and the latest addition of 100% FDI for single-brand- retail. “The timing and the confluence of these initiatives will really strengthen our product innovation, category expansion, and push for profitability in FY 18-19,” he added.
Founded in 2012 by Ashish Goel and Rajiv Srivastava, the Urban Ladder team now aims to be profitable in the next 18 to 20 months and file an IPO within three years. It currently offers over 4,000 products across various furniture categories including wardrobes, beds, sofas, dining tables and coffee tables.
Urban Ladder is currently operating two large format stores in Domlur and Whitefield and one sofa lounge in HSR Layout in Bengaluru. They are set to launch their fourth store this month in the J.P Nagar neighborhood of Bengaluru. As shared by the Urban Ladder spokesperson, the company continues to study other cities for its next phase of expansion, aiming at 15 – 20 stores across India by March 2019.
Urban Ladder further claims to be doing well on the financial front presently. As of March 2017, the company posted a 22% rise in its consolidated revenue leading to an amount of $6.4 Mn (INR 42.1 Cr), up from $5.2 Mn (INR 34.4 Cr) in the previous financial year.
At the same time, it witnessed a significant reduction in its losses to $24.5 Mn (INR 160 Cr) from $27.7 Mn (INR 181 Cr), indicating a strong hold of the founders on the expenses.
As per estimates, the overall furniture market is between $15 Bn to $24 Bn annually. The organised segment is around 8%-10% and of this, only 15% is online. Urban Ladder basically competes with players such as Pepperfry, LivSpace and Godrej Interio. Also, the startups in the furniture rental category such as Furlenco, and Rentomojo, also pose a threat to companies like Urban Ladder, as the number of mobile millennials looking for a comfortable stay away from their homes rise.
The online furniture segment seems to be a difficult segment in terms of earning revenues when you see giants like Kishore Biyani taking a step back. Earlier in April 2017, Future Group shut down its online furniture platform Fabfurnish. The strategy of Urban Ladder to move towards an omni-channel strategy also indicates the struggle intact in the space.
With the recent funding, whether Urban Ladder will be able to get its unit economics stronger and scale ahead with internal revenues, rather than external funding, will be something to watch out for.
[The development was first reported by VCCircle.]