[The Turning Point] Inability to find the best services to renovate own homes led these founders to launch Livspace
Omnichannel home interiors and renovation platformthis month raised $180 million in a Series F fundraise, and became the sixth Unicorn of 2022.
The journey has been a long one since the Livspace founders in 2015 told YourStory: “We are inspired by one vision: to build a truly differentiated, technology-driven startup out of India.”
Founded in 2014 by Ramakant Sharma and Anuj Srivastava, Livspace is a marketplace and design automation platform that connects homeowners, certified designers, and vendors. It is backed by KKR, Ingka Group investments, TPG Growth, Goldman Sachs, Bessemer Venture Partners, and others.
“Our home interior journey started when both Anuj and I were looking to renovate our homes,” says Ramakant, COO and Co-Founder.
“We struggled to find the right professionals and realised that even after investing a lot of time and money, we could never be sure of a fair price, quality, timelines, and even the result, considering the highly unorganised and fragmented market."
He further explains that this gap made them want to create a technology-based solution to help solve the problems of homeowners. This led to the birth of Singapore-headquarted-based Livspace.
“Interiors and renovation are merely the first two verticals we are focusing on,” says Anuj, Co-founder and CEO. “We aim to become the go-to brand for all things home.”
COVID-19 and the lockdowns were not easy for the startup to navigate.
In April, the founders decided to give up their salaries, the leadership team relinquished their annual bonuses, and introduced success-based variable pay across the board. In May 2020, the startup laid off 450 employees.
The company had a monthly revenue of $18 million to $20 million in March 2020, and a monthly run rate of $200 million to $240 million. This significantly dropped amid the lockdown.
The next challenge was the supply side disruption. Most contractors, designers, and workmen had gone back to their hometowns, and hardware and supply stores were shut during the lockdown.
“In the month of June 2020, if someone wanted to renovate a room in Bengaluru, consumers had few options as most unorganised players were not accessible. We brought in reliability as we have processes such a temperature checks, wearing masks, etc. in place,” Ramakant says.
Things started looking up when homes turned into offices, schools, and gyms, and people wanted to redo their spaces.
Close to 50 percent of Livspace’s bookings are now being done remotely – a number that was negligible previously.
The Livspace playbook
Anuj says since inception the home interior solutions startup has “been true to our commitment to organise and provide the best customer experience — across price, timeline, quality, and after-sales service in a massive fragmented home decor industry”.
Livspace aimed to create a niche in the specialised vertical market and bet on this space for all its large outcomes. This, along with the differentiation the startup tried to offer, played a crucial role in the startup becoming a unicorn.
The differentiation comes from digitisation of large and complex home improvement industry verticals, and integration of thousands of contractors, designers, and home improvement professionals as well as the largest brands and OEMs in this space.
The startup has more than 350+ brands and vendors on its platform, and has partnerships with some of the biggest brands including Ikea.
In October 2019, Livspace opened its Singapore business, which has been growing 10-15 percent month on month and contributes 20 percent to the overall business.
Over the next 24 months, Livspace aims to expand its international footprint by launch operations in Saudi Arabia, followed by the UAE, Australia, Malaysia, Indonesia, Vietnam, and Thailand. It also plans to make “strategic investments in innovative companies”.
The startup, as a whole, claims to have grown 2x in the last five months and has recorded over 400 percent growth in the past 24 months.
It will close FY22 with orders worth $350-400 million, with its India operations breaking even in March 2021 and over 5,000 employees on its payroll. It estimates company-wide profitability in the next 12-18 months and “to close $700 million worth of orders by 2023”/
“The journey to where we are currently has been a fruitful one. We are making the industry less fragmented by bringing together design and architecture professionals, contractors, subcontractors, brands and manufacturers on the same platform,” Ramakant says.
The mission of organising the extremely fragmented industry, onboarding thousands of home improvement professionals, and running the businesses efficiently has been the biggest opportunity to work on, the founders say.
“We are a mission-driven company, and we are lucky to have the best industry talent assembled to solve the problem that drives Livspace on a day-to-day basis,” Ramakant says.