Wakefit Secures $40 Mn Funding To Improve Delivery Operations & Factory

Bengaluru-based D2C furniture and mattress brand Wakefit has raised $40 Mn in a funding round led by Investcorp, with existing investors Sequoia India, Verlinvest and SIG also participating in the funding round.

Wakefit plans to use the incoming funding to work on its delivery operations and factory, along with expanding to Tier II and III cities, an ET report said. It is prudent to mention that Wakefit has set up a giant 6 Lakh sq. ft. furniture manufacturing unit in 2022 at Hosur.

The startup is also looking to invest in the machinery and build tech around machinery in the next 24 months, cofounder Ankit Garg was quoted as saying. He was further cited as saying that the tech would then decide what products Wakefit would prioritise based on the incoming demand.

Wakefit also plans to bring customisation to its product offering using technology and machinery further making use of the incoming fund. “So, we will build a lot of technology in the entire manufacturing and distribution supply chain. The customer would have a lot more visibility into what is happening,” he was quoted as saying.

The Bengaluru-based D2C startup also looks to take the count of its offline stores to 100 from the present number of 12.

The funding round comes just weeks after the D2C startup raised $45 Mn at a post-money valuation of $303 Mn. Wakefit has raised $145 Mn to date from various investors. 

Founded in 2016 by Garg and Chaitanya Ramalingegowda, Wakefit sells varied sleep and home-related products such as mattresses, pillows, bed frames, mattress protectors, sofas, study tables, bookshelves, shoe racks and TV units, among others.

Looking at the sleeptech startup’s journey to date, it is evident that it has shifted focus from selling only mattresses between 2016 and 2018 to now expanding its product categories. Wakefit has about 500 SKUs across 15-20 sub-categories presently.

Further, Wakefit’s different retailing channels give us a clear idea of its good mix of revenue streams. About two-thirds of its sales come from its website, app and offline stores and the rest come from online marketplaces including Amazon and Flipkart.

Wakefit saw its total loss surge 2.7X to INR 101.8 Cr in FY22 compared to INR 37 Cr in FY21, while its operating revenue surged to INR 632.8 Cr in FY22, up nearly 55% from INR 408.6 Cr reported in FY21. 

Total expenses of the Bengaluru-based D2C startup in FY22 stood at INR 738.3 Cr, up 62% compared to INR 454.2 Cr during the previous fiscal year. In terms of unit economics, the sleep solutions startup spent INR 1.17 to earn a single rupee in FY22.

The startup largely competes with players such as Duroflex, Sleepycat, Ikea, Pepperfry and HomeLane in the sleeptech market.