Online Furniture Start-up Pepperfry Raises $40 Million in Series F Funding led by Pidilite
Pepperfry raised $40 million in funding which was lead by Pidilite Industries, the makers of popular homegrown adhesive brand Fevicol.
The Mumbai based online furniture retailer Pepperfry has successfully raised $40 million in Series F funding, led by Pidilite Industries, the makers of popular homegrown adhesive brand Fevicol.
Founded in 2011 by former eBay executives Ambareesh Murty and Ashish Shah, Pepperfry, began life as a horizontal online marketplace focusing on fashion and lifestyle.
It has consolidated its position among the likes of competitors like Urban Ladder, Ikea and Flipkart Furniture in a $20 billion online furniture retailing market in India.
The company has built its own supply chain to serve its 6 million customers. Executives at Pepperfry said it has increased its merchant base by 53% year-on-year, while the list of furniture offered is up 90% in the last nine months.
The funds will go towards increasing marketing spend, doubling Pepperfry’s offline retail footprint with a target of 150 stores by next fiscal year, for supply chain expansion and foray into emerging categories like mattresses.
A senior executive at the online furniture retailer was reported as saying that, Pepperfry may see another up to $40 million capital infusion over the next few months, without disclosing its valuations following the latest fundraising.
“In India, there could have been very few partners we could have thought of that compliments us the way Pidilite does,” said Ambareesh Murty, co-founder, Pepperfry. “Fevicol is a great brand. They have extensive knowledge of the furniture trade, have deep relationships with carpenters and other market stakeholders of our eco-system.”
Fevicol is a great brand. They have extensive knowledge of the furniture trade, have deep relationships with carpenters and other market stakeholders of our eco-system.
For the first nine months ended December 31, the company has narrowed losses by 52%, Murty said. It had recorded a loss of Rs 185 crore in financial year 2019 and expects to narrow that further to Rs 100 crore this financial year. “By fair estimates, we should be able to turn in a profit by June-October 2020,” Murty said. The company expects to close the current financial year with revenues of around Rs 350 crore, up 44% from the year-ago period.
Pidilite, which made the investment through its publicly listed unit, is the first strategic investor to come on board Pepperfry, as the homegrown e-furniture marketplace gets ready for a potential Initial Public Offer in India next financial year.
“With the pace of transformation currently under way, investing in disruptors gives established players a shorter route to market,” said Utkarsh Sinha, managing director, Bexley Advisors.
In December, Pidilite co-invested $30 million in online interior design company Home Lane. Globally and in India, companies such as Pidilite are betting on startups to access newer customers, products, markets, technologies and trends. Coca Cola, Unilever, Danone, Godrej Consumer and Marico have made such long-term and typically strategic investments.