India-based online furniture startup Homelane to raise $20m

Visual from the company website

Homevista Decor and Furnishing Pvt. Ltd, the online furniture and design company that operates Homelane.com, is in advanced talks to raise $20 million, according to two people directly involved in the transaction.

The round would be led by new investors along with existing investors, said Srikanth Iyer, co-founder. He declined to comment on the amount and the time frame of the fundraising.

The company raised $4.5 million in its Series A funding from Sequoia Capital and Arin Capital in February. It had also raised an early stage (seed) round from serial entrepreneurs Meena and K. Ganesh.

The company, founded in 2014 by Iyer and Rama Harinath, is looking to raise funds to deploy in advertising and marketing initiatives.

“We are looking at investing in creating a brand,” he added. The other areas of spending include hiring technology teams and development of software and solutions.

The Indian furniture market is expected to grow at an annual rate of 13% between 2013 and 2018, according to a report by Ken Research Pvt. Ltd. This sector employs more than 4.11 million people. That is expected to almost triple to 11.29 million by 2022.

“There are a number of challenges that such businesses would face. The time taken for delivery is about 15 days. Consumers expect faster delivery since online shopping is impulsive buying, companies would have to reduce their delivery time,” said Vishal Pereira, director at CreedCap Asia Advisors. “The business models would have to pivot to offer a hybrid of online and offline presence. In the category of furniture which is bought for a time frame of 4-5 years, users like to see and feel the products before buying,” he added.

Start-ups in this space have been raising funds from private equity and venture capital investors. In 2015, Livspace (run by Home Interior Design E-commerce Pvt. Ltd) raised $8 million, Pepperfry (Trendsutra Platform Services Pvt. Ltd) raised $100 million in a round led by Goldman Sachs; and Spacewood Furnishers Pvt. Ltd raised $13-15 million (for a 26% stake) from Japan’s firm Sumitomo Forestry Co. Ltd.

Pereira said that for business models such as Homelane, the margins are 45-60% as compared to aggregators that operate in the 25-30% range.

Homelane provides its services in six cities, including Delhi, Mumbai, Pune and Hyderabad. “We don’t have any plans to expand to new cities but to grow deeper in the existing ones,” said Iyer over the phone. The company has served more than 600 customers since its inception. The average value of a transaction is Rs.6 lakh and it clocks revenue of Rs.7.5 crore each month.

Also Read:

India: Online home solutions provider HomeLane acquires virtual tech startup Doowup

Sequoia Capital plans new $800m fund for India

India: Online furniture marketplace Mebelkart acquires 53central.com

This article was first published on Livemint.com

 

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.