Furniture and homedecor marketplace Pepperfry snaps up $100 M round led by Goldman Sachs, Zodius and others
Home furnishing and furniture niche is touted as a big opportunity in the overall product based e-commerce segment. Riding high on burgeoning consumer base of home furnishing goods, primarily driven by young and lifestyle conscious Indians, investors are also betting big on the niche.
Mumbai-based furniture and home products marketplace Pepperfry has raised $ 100 million in a fresh round of funding led by Goldman Sachs and Zodius Technology Fund. Existing investors Bertelsmann India Investments (BII) and Silicon Valley-based Norwest Venture Partners (NVP) also participated in this round.
Importantly, this is the largest quantum of funds raised by a niche e-commerce player in India. Earlier its rival Bengaluru-based Urbanladder gobbled $50 million Series C round led by Sequoia Capital in April this year.
T.V. Mohandas Pai and Ranjan Pai also participated in the round through Zodius Technology Fund. The company will use funds to expand its logistics footprint in tier III and IV cities by adding to its growing fleet of delivery vehicles.
Besides aforementioned functions, a chunk of proceedings will also go towards opening new distribution centres, expansion of carpenter and assembly service network, massive hiring (mainly technology & engineering team), and ramping up mobile frontiers.
Ambareesh Murty, Founder & CEO of Pepperfry, said,
Our goal is to be the place where modern Indian families shop for their homes. While we are on this mission, we will benefit tremendously from the global insight of Goldman Sachs and the business savvy of Zodius as they join the Pepperfry board. Our existing investors, Norwest and Bertelsmann, have been great partners and I thank them for reiterating their faith in our team.
Over the past three years, Pepperfry has made a two million-strong consumer base and serves them across 300 plus cities in the country. It also leveraged its robust financial architecture to invest behind building the ecosystem of skilled craftsmen, logistics professionals, and interior designers in India.
Ankur Sahu, Co-Head of Private Equity at Goldman Sachs in Asia, said,
Goldman Sachs continues to back high-quality local entrepreneurs to build significant businesses that create and deliver value to the everyday lives of the country's young, billion plus population. Through this most recent partnership in Pepperfly.com, we intend to leverage our global expertise in the sector to help create a large, differentiated leader in India’s rapidly growing e-commerce industry.
Currently, over 90 per cent of the home furnishing market is unorganised and scattered. Consequently, there is ample opportunity for startups to make it big in this category. Even if a startup captures 10 per cent of the $35 billion overall market, it will become a $3.5 billion revenue-making entity.
Pepperfry has been trying to raise funds from some time and now with this massive round, the company will set its eyes on bigger goals to scale faster and spread its wings to smaller cities. The round will also equip Pepperfry to compete with biggest rivals Urbanladder and Fabfurnish.
Building a network of craftsmen and carpenter requires a significant investment. Supply chain and logistics are very different in furniture segment from regular e-commerce categories like electronics and apparels. The proceeding will enable Pepperfy to mitigate the above challenges and get a leg-up over competitors through a conducive infrastructure for an overall ecosystem.
The home and furnishing market is gearing towards consolidation and we may see some merger-acquisition activities in near future. After electronics, apparels and accessories, home furniture & furnishing market will be an exciting niche to watch out for. Stay tuned for action pack activities in this niche.