Mumbai-based online furniture and home products marketplace Pepperfry may raise a fresh funding round of $100 Mn (INR 703.9 Cr) from its existing investors Goldman Sachs, Norwest Venture Partners and Bertelsmann India Investments to ramp up its game against global furniture retailer Ikea and other players.
A media report citing people familiar with the development said that the fresh funds will help Pepperfry expand its offline presence and diversify. For this, fresh equity will reportedly be issued and the investors will also seek to maintain their level of holdings in the company.
An email query sent to Pepperfry didn’t elicit any response till the time of publication.
Pepperfry was founded by Ambareesh Murty and Ashish Shah in January 2012 and offers services of over 3000 merchants and last mile deliveries to 500 cities in India. The company has raised more than $184 Mn, with $38.5 Mn (INR 250 Cr) in Series E round in March 2018 from State Street Global Advisors.
Norwest Venture Partners and Bertelsmann India were one of the early investors in the company and had pumped in $15 Mn (INR 105.6 Cr) in 2014. In 2015, Goldman Sachs led a $100 Mn (INR 703.9 Cr) round in the company along with Norwest and Bertelsmann, followed on by an additional $31 Mn (INR 218 Cr) in 2016.
Pepperfry, owned and operated by The TrendSutra Group of Companies, registered a 20% YoY increase in revenues at $41.6 Mn (INR 308.46 Cr) in the fiscal year 2018.
At the time, Pepperfry CFO Neelesh Talathi told Inc42 that, “In 2018, we have doubled the number of studios we have, which has resulted in a 45% increase in the activation spend during FY18. At the same time, we have reduced the amount of spend on brand marketing and have found digital marketing as well as activation much more effective.”
Pepperfry, between FY13-14 and FY16-17, has shown tremendous growth in its revenue, as observed by the Inc42 DataLabs in its May 2018 What The Financials analysis of the company, specifically around its platform services.
The company’s idea of concept stores and furniture design studios under the brand name, Studio Pepperfry, launched in December 2014, brought rich results for the company. The move incentivised their customer acquisition by providing the missing ingredient of ”touch and feel” to its customers.
Pepperfry now has stores across 16 cities in India, thereby being able to offer a more omnichannel experience to its customers. Also, Pepperfry Studio footprint reached 28 Studios across four existing and eight new cities in FY17-18.
The market is so vastly unorganised that leading players like Urban Ladder and Pepperfry have been catering to 2% of the entire online furniture market. With global retailer Ikea coming in and expanding its presence across the country, the times are for players like Pepperfry to ramp up its operations and scale up further with a stronger omnichannel approach to continue on its growth trajectory.
[The development was reported by ET.]