Wakefit.co Secures 185 Crores Series B Funding

Wakefit.co, India’s largest sleep and home solutions company, announced its INR 185 Crores Series B round of funding today. Verlinvest, a large European investment firm with an AUM of € 1.6bn focusing on consumer businesses, led the investment round, with participation from existing investor, Sequoia Capital India.

The Series B funding builds on an exceptional year for the direct-to-consumer (D2C) company, which recently expanded its product portfolio in home solutions, after 4 years of successful operations in the sleep solutions space. The complete range now includes furniture such as beds (cots), sofas, wardrobes, coffee tables and other furnishing. The investment is expected to further boost Wakefit.co’s penetration into non-metro areas of the country, with additional Capex investment in machinery, manpower addition and factory setups on the cards. Technology and marketing bandwidth are also expected to see a significant boost within the company, to help capture India’s thriving home and furniture market.

 The Series B round sets it on course to accelerate growth, with revenue targets of INR 1000 crores by FY 2023. Wakefit.co, after setting up factories in Pune, Delhi, Jodhpur, Hyderabad and Bengaluru to strengthen logistics and bolster customer experience, will now look to double down on reaching Indians in Tier 2 and 3 markets. The company is also planning to set up experience centers in a few cities as a pilot, in response to growing customer feedback. The company has grown rapidly but profitably since inception, with revenue growing from ~ INR 80cr in FY 2019 to ~ INR 199cr in FY 2020 as per audited financial statements. 

With a team strength of about 600 employees as of March 2020, Wakefit.co will also increase manpower across functions and create avenues to nurture Wakefiters in their respective careers. The company aims to increase its workforce by 400% to 3000 employees by March 2021 and has already started training programs for machine operators, carpenters and customer experience executives and will invest heavily in building stronger Learning & Development (L&D) modules within the company as part of its Wakefit Academy initiative to develop skilled manpower from the grassroots level. 

As part of the funding round, the company has also instituted an ESOP buyback worth INR 15 crores for the benefit of its early employees who have made significant sacrifices in the company’s journey. The company is also adding another 40-50 employees into the ESOP pool, demonstrating its belief of rewarding team members who provide commitment and tenure while growing with the company.

Ankit Garg, CEO and Co-Founder of Wakefit.co commented on the Series B funding round and said, “The investment consolidates Wakefit.co’s position as the fastest growing D2C brand in India. Given that the company has been profitable from an early stage – a rarity in the start-up world – our focus has always been on high growth while maintaining strong business fundamentals. Our product innovation and customer centric DNA has enabled us to achieve our growth targets year on year. The latest funding round will help us touch more lives and penetrate deeper into the Indian market” 

Chaitanya Ramalingegowda, Director and Co-Founder of Wakefit.co said, “The past year has been an exceptional one for us, with customer demand evolving and growing in a completely upturned lifestyle. In order to create rapid growth opportunities in this landscape, we raised Series B funding to bolster key functions such as R&D, logistics, operations, technology and marketing. We are happy to partner with Verlinvest, which has previously invested in top unicorns in India, and to further strengthen our partnership with Sequoia Capital India as part of this round.”

“We are excited and happy to partner with Wakefit.co and its founders in their journey to build a unique, digital-first brand in the Indian home solutions market. We now live in very interesting times in which consumer preferences & online penetration are changing rapidly and believe Wakefit has great momentum to delight Indian consumers with great quality, value for money products delivered alongside great customer experience. It is a testament to the great quality of the founding team and the outstanding business they have created. Verlinvest is a long-term supporter of young brands and talented entrepreneurs who are creating new consumer revolutions. We are very happy to partner with and support Wakefit.co’s talented team to expand the business and to further build the Wakefit brand.” said Mr. Arjun Anand, Executive Director at Verlinvest. 

"The home solutions segment in India is largely unorganized with a broken customer experience thereby providing an immense potential for disruption. Current tailwinds have created a systemic shift towards online shopping which offers potential for a digital first player like Wakefit.co to organize the market. We are excited to partner with a promising brand like Wakefit.co, that is truly disrupting the market with its customer-first approach. We shall work together to bolster the company’s growth trajectory, while at the same time continuing to endear Wakefit.co as the most reliable brand of choice for consumers.” said Manvitha Janagam, Investment Professional, Verlinvest.

Gaining the first movers’ advantage as a digital first D2C brand, Wakefit.co has been able to address the hitherto unmet customer needs in sleep and home solutions, which is a traditionally unorganised industry. A Redseer report recently revealed that the furniture segment in India is currently worth $17 Billion and us growing at a CAGR of 15-17%. While online furniture retail is presently only 3% of the organized market (which in itself is 15% of the overall market currently), the CAGR at which the online furniture space is growing is bullish at 80-85%. The sleep solutions space is also showing a promising growth trajectory. As per industry estimations, the mattress market in India alone was worth $1.7 billion in 2018 and is expected to grow at a CAGR of 10% to reach $2.5 billion by 2022. A lot of this increased demand is expected to come from Tier 2 and 3 cities in India. At Wakefit.co itself, almost 30-35% of the demand comes from tier 2 and tier 3 markets. During the recently concluded festive sale, as much as 47% of traffic on the website was generated from beyond the top 8 cities (by revenue), which majorly consist of Tier 2 and 3 markets. For FY 21, the company’s target is to drive 50% demand from these markets and reach an overall revenue target of INR 450 crores.