Wakefit Innovations Pvt. Ltd on Thursday said it has raised ₹320 crore (about $40 million) in a round led by Bahrain’s alternative investment firm Investcorp.
The fundraising will let the mattress maker and sleep solutions company open more retail stores, and capture a bigger share of this fast-growing market.
Existing investors Sequoia Capital India, Verlinvest and SIG also took part in the Series D round of funding. Wakefit didn’t disclose its post-money valuation.
The news was first reported by Mint in September. “This funding round will solidify our position in the home and sleep solutions space,” Wakefit chief executive Ankit Garg said in an interview.
He said the fundraise will help the company spur growth without compromising on profitability.
Wakefit will use the fresh capital to start new categories and deepen its omni-channel presence across the country as part of its aim to cross ₹1,200 crore in revenue in the next financial year. It will also ramp up manufacturing and supply chain capabilities, branding and increase its workforce.
Bengaluru-based Wakefit expects to end this financial year at about ₹900 crore revenue, growing about 40%. Currently, the company earns about two-thirds of its revenue from its own portal and retail stores. The rest comes from online marketplaces.
Wakefit was founded in 2016 by Garg and Chaitanya Ramalingegowda. The company sells research and innovation-driven sleep products such as mattresses, pillows, bed frames, comforters, neck pillows, and back cushions.
Wakefit last raised ₹200 crore as a part of its Series C round led by US trading firm SIG in December 2021. It raised Series A funding from Sequoia Capital India, and Series B funding of ₹185 crore from Verlinvest and Sequoia Capital India.
The company primarily sells its products on its own portal as well as e-commerce sites such as Amazon, Flipkart and Pepperfry. In 2020, it forayed into the furniture business, expanding its portfolio to beds, study tables, and shoe racks, among others.
Garg said Wakefit is close to achieving profitability on an earnings before interest, taxes, depreciation and amortization (Ebitda) level by the end of this quarter. Of its three verticals, mattress, accessories and furniture, two are already operationally profitable, he said.
“The only place we are investing now is furniture. (Over the last year), most of the investment has gone into building factories, showrooms, supply-chain, designing and engineering,” Garg said.
For furniture, “people like to go to a store and try out products and then purchase,” said co-founder Ramalingegowda, explaining the rationale behind growing the offline business. The furniture vertical now contributes close to 25% of its revenue.
"The investment aligns with Investcorp’s thesis on increasing the consolidation of unorganised sectors by emerging consumer brands," said Varun Laul, Partner, Investcorp PE.
In 2022, Wakefit opened a dozen stores across India. The diversification into brick-and-mortar stores will offer an omnichannel experience to customers. It plans to expand its presence in both metro and tier II cities such as Patna, Lucknow, Ahmedabad, and Mysore. It plans to have about 100 stores across 20 cities within three years.
“Our offline conversion is 50-60% and ticket size is nearly double of our online ticket size, because people come and buy 3-5 items,” Ramalingegowda said.
Wakefit competes with brands such as Sleepwell, Sheela Foam and Kurl-on. It claims to have served more than a million customers in the last six years. It manufactures its products in-house at factories in Bengaluru, Jodhpur, and Delhi.
