Furniture maker Wakefit's loss widens to Rs 145 Cr in FY23; revenue at Rs 812 Cr
Bengaluru-based Wakefit aims to become profitable by FY24 and is eyeing a revenue of Rs 1,200 crore in the next two years.
Wakefit.co, the furniture and sleep solutions startup, said its losses widened 36% to Rs 145 crore in the financial year ended March 2023 compared to Rs 106 crore last year. Meanwhile, its revenue from operations rose to Rs 812 crore, up 28% from the previous year.
The Bengaluru-based company's total expenses surged nearly 30% to Rs 965 crore in FY23, hurt by an increase in depreciation and amortisation expenses and employee benefit costs, as per data available from the Ministry of Corporate Affairs (MCA).
The company said it has invested in areas such as R&D, retail expansion, and other capacity-building activities to drive sustainable business growth while attempting to optimise the entire back-end to front-end operations.
"In line with this, our COGS (Cost of goods sold) has also showcased a linear increase of 24% against the revenue. Our cost of procurements and material margins have improved," Chaitanya Ramalingegowda, co-founder of Wakefit.co, told YourStory.
"Another contributor to the expense pool was our transition from the GAAP accounting standard to IndAS, which is a concerted effort to bolster the company’s compliance benchmarks. Our commitment to fulfilling stakeholder responsibilities was also reflected in yet another ESOPs buy-back scheme, the second wealth generation opportunity created for our workforce over the years," Ramalingegowda added.
Employee benefits expenditure rose to Rs 105 crore from Rs 91 crore in FY22, while depreciation and amortisation costs nearly doubled annually. Wakefit.co reported its other expenses surged 35% to Rs 334 crore compared to Rs 246 crore last year.
Founded by Chaitanya Ramalingegowda and Ankit Garg in 2016, runs a D2C model to offer premium furniture, including mattresses, coffee tables, and bed frames, and home decor items at affordable prices.
In January, Wakefit.co raised $40 million (about Rs 320 crore) in a Series D funding round to widen its reach to Tier II and III markets and strengthen its supply chain. So far, it has secured upwards of $90 million (about Rs 770 crore) from marquee investors, including Investcorp, Peak XV Partners (formerly Sequoia Capital India), SIG, and Verlinvest.
The company aims to become profitable by FY24 and is eyeing a revenue of Rs 1,200 crore in the next two years.
It has also placed a strong bet on the omnichannel sales approach and wants to open nearly 30 physical stores by March and a total of 70 by the end of FY23, Co-founder and CEO Ankit Garg told YourStory in January. This is expected to increase revenue from offline stores to 40% from the current 10% of overall sales.
Currently, Wakefit.co has more than 40 stores, according to the company.
"With an improvement in our working capital and series D funding, we witnessed a 7.2x surge in our cash balance by the end of FY 2023. Our EBITDA margin improved by approx. 1% on the back of healthy material margin with revenue growth of approx. 28% with a corresponding Cost of Goods increase of approx. 24%. We aim to close this year at more than INR 1000 crores in net revenue while maintaining financial stability," Ramalingegowda said.
(The story has been updated to reflect Wakefit.co's correct name and comments from a co-founder.)
Edited by Suman Singh