Lenskart Eyes Entry To Unicorn Club With A $350 Mn Push From SoftBank

Ratan Tata-backed eyewear startup Lenskart may be the next entrant to India’s unicorn club with the help of a $350 Mn investment from SoftBank Vision Fund. The funding is reportedly expected to hike the company’s valuation by 162%, reaching a valuation of $1.3 Bn from $495.5 Mn at the last round.

An ET report has cited people familiar with the matter as saying that SoftBank and Lenskart have been talking for a few months and may close the deal soon. It is further reported that SoftBank wanted to invest a higher amount to support company’s ambitious expansion plans, but Lenskart didn’t want a bigger cheque.

Founded in 2010 by Peyush Bansal, Amit Chaudhary and Sumeet Kapahi, Lenskart enables manufacturing, assembly, distribution, and supply of products such as eyeglasses, powered sunglasses, and contact lenses. The company has so far raised $129.6 Mn from investors such as International Finance Corp (IFC), TR Capital and Zurich-based asset management company Adveq.

In an email response, SoftBank spokesperson declined to comment on speculation. While, email sent to Lenskart representatives didn’t elicit any response till the time of publication.

Lenskart Goes All Out On Omnichannel Retail

With a pivot to omnichannel strategy, the company plays strongly on offline as well as online expansion. As of November 2018, Lenskart had over 460 stores across India.

The company’s strategy has diverted to scale up manufacturing and this has helped it double its production cycle. Further, this enables Lenskart to ensure faster inventory turnarounds and offer a greater array of products through entering new product categories.

Manufacturing abilities add to company’s control on pricing of products. This is critical to Lenskart’s ambitious growth plans and strategy for survival in the fragmented market. It is now aiming to open 150 stores by March 2020 and open 2,000 stores in India over the next five years.

In terms of financial performance, the company reportedly a revenue of INR 500 Cr in FY19 with INR 70 Cr in losses. In comparison, the year before, Lenskart’s revenue was $43.6 Mn (INR 311 Cr) and a net loss of $16.5 Mn (INR 118 Cr) during the same fiscal.

Key Investments In Technology

The offline expansion also comes on the back of technology investments. Here’s a look at  Lenskart’s investments:

• In April, launched a new app called Lookr. It is an Android-based discovery app to double down on technologies related to face mapping, facial analysis, design predictions and frame recommendations, among others.
• The company’s tech investment is currently about INR 200 Cr annually
• In August 2018, Lenskart introduced Lenskart Blu, an eyewear solution that blocks the harmful blue light that is emitted from electronic gadgets
• Lenskart allocated $10 Mn towards building its contact lenses business, especially to fuel its product innovation, backend integration and enabling trials
• Lenskart partnered with a California-based startup Ditto to launch 3D Try-On, a feature that enabled people to try on frames virtually
• In December 2017, it acquired a minority stake in Israel-based tech startup 6over6 for $1 Mn, with an aim to change vision care globally

Market research firm Euromonitor International in a report released in July 2018 said that sales of eyewear in India will increase to INR 39,702.77 Cr in 2023 from INR 28,431.74 Cr in 2018.