SUMMARY
The funding round was a mix of equity and debt and was led by WestBridge Capital, Mirabilis Investment Trust and Alteria Capital
Design Cafe will also use the fresh funding to expand its brand and enter new markets in the country
The interior design platform is operationally profitable currently across all cities and would turn profitable next year, cofounder Shezaan Bhojani said
Online interior design platform Design Cafe has reportedly bagged a funding of INR 40 Cr ($4.8 Mn) in a round led by WestBridge Capital, Mirabilis Investment Trust and Alteria Capital.
The funding round, an extension of its September 2021 round, was a mix of equity and debt, ET reported. Design Cafe raised $25 Mn in its extended Series B round in 2021.
Existing investor Sixth Sense Ventures and Design Cafe’s founders Shezaan Bhojani and Gita Ramanan also participated in the round.
“Essentially, what we are doing is that it is an extension of the last round. We are making sure that there is a 36-month runway. The idea is to have enough capital in the bank till you get profitable,” Bhojani was quoted as saying.
Besides, the funding will also be used to enter new markets.
Design Cafe, founded in 2011 by Ramanan and Bhojani, offers home interior solutions and is currently operational in nine cities in the country, including Mumbai, Delhi-NCR and Hyderabad. While its premium package costs around INR 8 Lakh, the startup also offers budget-friendly solutions under the brand ‘Qarpentri’.
Bhojani said that Design Cafe would turn profitable next year and is currently operationally profitable in all the cites it operates in. The startup currently has an annualised revenue run rate of INR 200 Cr, he added.
“In the last year, we have made significant progress towards profitability. Our margins have increased significantly, and we are operationally profitable across all cities. This round will help us take both our brands to newer markets across India, as we continue to deliver 60-70% CAGR growth annually,” he was quoted as saying.
Design Cafe’s net loss widened to INR 70.2 Cr in FY22 from INR 52.4 Cr in FY21, while its operating revenue grew to INR 80.6 Cr from INR 56.8 Cr in the previous year.
The startup competes with the likes of Goldman Sachs-backed Livspace and Accel-backed Homelane.
So far, it has secured over INR 390 Cr in funding from multiple investors, including Sprout Capital, Sidharth Pansari, Apurva Salarpuria, Fireside Ventures and Sixth Sense Ventures.
Earlier this month, LivSpace laid off over 100 employees as part of a cost-cutting exercise amid the funding winter. HomeLane also reportedly fired 30-40 employees in product and tech roles.
According to a Technavio report, India’s online home decor segment is estimated to expand at a CAGR of 10.2 % during 2021-26 to reach a size of $3.75 Bn by 2026.
