Wakefit.co raises $40M in Series D round from Investcorp

Furniture and home improvement brand Wakefit.co has raised $40 million (Rs 320 crore) in a Series D funding round led by Investcorp. Existing investors Sequoia Capital India, Verlinvest, and SIG also participated in the round.

The direct-to-consumer (D2C) brand will use the fresh funds to expand categories and widen its omnichannel presence in Tier II and III markets in the country. Wakefit.co also intends to strengthen its supply chain and add staff to its workforce, it said in a statement.

Founded in 2016 by Ankit Garg and Chaitanya Ramalingegowda, Wakefit.co started as a sleep solutions brand offering a portfolio of mattresses, pillows, and bed frames among others. The company now also hosts a range of home improvement products and furniture items including study tables, bookshelves, and shoe racks, manufactured in its factories in Bengaluru, Jodhpur, and Delhi.

Wakefit.co has raised close to $62 million so far (excluding Series D). It logged a revenue of Rs 636 crore in FY 2022, a 54% jump since the previous year.

“We are excited to invest in WakeFit as it continues its journey towards becoming the market-leading sleep solutions and home decor omnichannel brand" said Varun Laul, Partner, Investcorp PE. "The investment aligns with Investcorp’s thesis on increasing the consolidation of unorganised sectors by emerging consumer brands. We look forward to supporting Ankit and Chaitanya in profitably scaling this business and taking WakeFit public in the future.”

The Bengaluru-based company now aims to become profitable by the fiscal year 2024 and is eyeing a revenue of Rs 1,200 crore in the next two years. It is also placing a strong bet on the omnichannel sales approach by aiming to open nearly 30 physical stores by March and another 70 by the end of FY23, CEO and Co-founder Ankit Garg told YourStory.

This is expected to increase revenue from offline stores to 40% from the current 10% of overall sales, according to Ankit.

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"We believe offline stores are complementary to the online shopping experience. Our studies suggest that most of our customers conduct preliminary research of their desired product through our website before visiting a store," Chaitanya, Director and Co-founder of Wakefit.co, said.

The co-founders added that the company is gearing up to go public in the next two years by focusing on building a scalable and sustainable business.

Most D2C brands spend exorbitantly on marketing and advertising, making it more difficult to scale. For instance, beauty brand SUGAR Cosmetics's spending on advertisements grew 185% in FY22 as compared to FY21, while meat delivery firm Licious ’ spends increased by 70% in the current fiscal compared to the previous year.

However, for Wakefit.co, nearly 35% of all orders come from repeat customers which significantly brings down marketing expense, according to Chaitanya.

(The story was updated with an investor quote.)

"This funding round will solidify our position in the home and sleep solutions space, and will enable us to scale up our manufacturing and supply chain capabilities. We thank our investors for their support and trust in our journey of becoming a market leader in our space," Ankit noted.