[Funding alert] WakeFit raises Series B investment of Rs 185 Cr led by Verlinvest, Sequoia Capital India
Bengaluru-based sleep and home solutions startup.co has raised Rs 185 crore Series B funding led by the European investment firm Verlinvest and existing investor Sequoia Capital India. The company said the latest round of funding will be deployed to accelerate the company’s strategic expansion to newer markets, foster product innovation, and leverage technology to deepen its consumer-first approach.
The team is targetting a revenue of Rs 2,500 crore by FY23. It stated it has grown rapidly but profitably since its inception, with revenues growing from Rs 80 crore in FY 2019 to Rs 199 crore in FY 2020, as per audited financial statements.
The statement added that as part of the funding round, the company has also instituted an ESOP buyback worth Rs 15 crore for the benefit of its early employees who have made significant sacrifices in the company’s journey.
Ankit Garg and Chaitanya Ramalingegowda, Co-founders of Wakefit
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 in the press statement, “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 startup 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.”
Wakefit has expanded its portfolio into home solutions after four years of operations in the sleep solutions space. The new range includes — sofas, cots, coffee tables, wardrobes, and other furnishings. The company added that this investment will also help boost Wakefit's penetration into non-metro cities in the country, with an additional capex investment in machinery, manpower addition, and factory setups on the cards.
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.”
The Tier-II India push
Wakefit will also be setting up experience centres in a few cities as a pilot, in response to growing customer feedback. The team also aims to increase its workforce by 400 percent to 3,000 employees by March 2021.
The statement said it has already started training programmes for machine operators, carpenters, and customer experience executives, and will invest heavily in building stronger Learning and Development (L&D) modules within the company as part of its Wakefit Academy initiative to develop skilled manpower from the grassroots level.
“We now live in very interesting times in which consumer preferences and online penetration are changing rapidly, and we believe Wakefit has great momentum to delight Indian consumers with great quality and value for money products delivered alongside great customer experience. 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 Arjun Anand, Executive Director at Verlinvest.
The statement added that close to 30 to 35 percent of Wakefit's demand comes from Tier II and III markets. It stated in the recent festive sales, close to 47 percent of the traffic on the website was generated beyond the top eight cities by revenue. For FY 21, the company’s target is to drive 50 percent demand from these markets and reach an overall revenue target of Rs 450 crore.
"The home solutions segment in India is largely unorganised due to a broken customer experience, thereby providing 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 organise 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, continue to endear Wakefit.co as the most reliable brand of choice for consumers,” said Manvitha Janagam, Investment Professional, Verlinvest.