Coincidences rarely lead to great ideas and big success, but luckily for furniture startup Homefuly, things turned out otherwise.
Vinay Indresh, 33, and Arnab Saharoy, 35, were classmates at NIT Warangal. After working at different companies, Vinay ended up at Flipkart and Arnab at Myntra. During official trips to each other’s offices, they used to catch up. Arnab happened to mention how hard it was to find the right furniture when he had moved to a new house. Vinay, who was in charge of the home category at Flipkart, understood the complexities. While there are online and offline options for ordering individual products, few provide the complete package, a problem the two friends set out to solve. They learnt how the space works in India and how other players have scaled up.
Vinay and Arnab needed a co-founder who knew the domain well, which was why Madhu Sarangi, 40, whom they met through common friends, turned out to be the perfect fit. A qualified interior designer, she had been freelancing for seven years and had executed over 80 projects before starting up. Once she joined the team, the idea turned into a reality.
It takes some effort to make your house a home, and furniture that fits your taste is essential for that. But it is difficult to get the same designs and standards across cities; there is no brand you associate with furniture as you do with fashion. “From our experience, what the customers remember is the material and style,” says Arnab.
Within three months of ideation, Homefuly started business in January 2016 with a pure marketplace model. “In the marketplace model, we make a package with the best vendor and the best designer in the market. But that didn’t add much value to the customer. Many of them were not offering great service. We tried different things for three months,” Arnab recollects.
Just offering a customer a package doesn’t cut it in the furniture space. The team soon realised this and moved on from simply suggesting partner stores and designs according to the customers’ tastes to adding more value with an in-house end-to-end design solution. Says Vinay:
“We don’t make furniture; we have trusted partners in our network to cater to quite a large volume and scale.”
He believes that having fewer vendors helps maintain the standards to give the right output. They now have more than 20 partner stores on board, besides three factories. Homefuly targets the middle and upper middle class.
Digital marketing kicked in for Homefuly as Facebook ads and Google SEO increased. The number of orders rose when referral networks grew. Homefuly gives materials including videos and graphic designs to customers to spread the word in their groups. Once the relationship with customers is built, marketing emails are sent to their groups. “Word of mouth is very important in interior design — it brings larger ticket size,” says Vinay. Currently, their average is Rs 6 lakh.
Content is of great significance to Homefuly. “We have about 500 stories published now — both curated and original content. Our research team finds out new trends, particularly in metro cities; themes which work better in daylight and night time; themes according to location, and then write the content,” says Arnab.
Designs are made in 3D graphic pictures. “People want to ensure that the kitchen, drawing room, bedroom, and everything is in sync. It should be comfortable aesthetically as well. Our designers take the customers through a theme selection process. Our designer understands your house, your requirements, and then makes a concept document of the various things collected from the internet or our previous designs about how the designer is thinking before you try. We get floor plans to know the measurements,” Arnab explains.
Once the designer sends the concept document, the customer can choose the light, décor, etc. Then it goes into production, or to the vendors, and the final product is delivered in 45 working days. About 15 percent of projects are house makeovers, and they expect it to grow to 25 percent in a year. For a new house to be ready to move in, the work can take up to six months.
The entire design process is free as it helps in customer acquisition. Homefuly gets its revenue from the commission paid by stores, whether they are referred to the customer or whether home decor is sourced from them.
The Homefuly team presently has 10 members and they are hiring more. There are seven people in the design team — including designers from NIFT and Jain University. Homefuly’s research team focuses on market trends, like convertibles and space optimisation, especially in metro cities. Arnab does UI/UX for design and development.
At Flipkart, Vinay was instrumental in growing the marketplace business from Rs 80 crore per month to Rs 280 crore a month. This experience, combined with his earlier stints at Motorola, among others, enabled him to take up strategy and finance at Homefuly.
All three co-founders call themselves Chief Customer Officers and there is a reason behind it. “We are in touch with every customer. It is a learning experience — knowing the customer to understand how we should build technology. Bangaloreans are supportive of startups,” says Arnab.
Homefuly is operationally profitable already. In one year, they have done about 100 projects with a margin of 10-15 percent, and have earned Rs 4 crore in revenue. Each designer does about four or five projects a month.
Competing with Livspace, Furlenco, and Homestudio, Homefuly is now looking for investment. Homefuly hopes to scale up to 3x, starting with Pune and Hyderabad as there is a dense population of IT couples in both the cities. Real estate data shows a great number of apartments worth Rs 70 lakh to Rs 1.5 crore there.
Arnab specifies that they provide no discounts, but focus on showcasing new collections. For a $28 billion market in furniture, only about 5 percent is organised and less than 1 percent of it is available online. Homefuly is all set to become the next big thing in India’s furniture sector.