Indian furniture company Pepperfry is eyeing an initial public offering (IPO) in the first half of 2022. The online furniture marketplace plans to raise $50-100 million in pre-IPO funding by the end of this year, Mint reported quoting a top company executive.
“We are raising a pre-IPO round of $50-100 million. While we have enough money in the bank, we will raise more money to align a good set of investors on our side before we hit the IPO," Pepperfry co-founder and CEO Ashish Shah told Mint.
In 2020, another co-founder and CEO Ambareesh Murty had said that the company needed to be profitable for at least 6-9 months before the IPO to show investors that the business could make money. But this year the focus has shifted to becoming a “high growth company”.
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“In pre-pandemic times, we were achieving 45-50% sales growth year-on-year (y-o-y). We are now targeting upwards of 50-60% y-o-y for the coming years,” Shah told Financial Express in another interview.
Pepperfry had come close to profitability in August 2020 but is now focussing on bringing down costs and paring losses. "Until the second wave, we had a great ride in business. But we also realised that we can turn profitable at our will," he said.
In 2019-20, Pepperfry’s revenues jumped 26 percent to Rs 260.61 crore. The same year, the company trimmed losses by 33 percent to Rs 122.31 crore. The omnichannel retailer received Rs 35 crore funding from InnoVen Capital this year.
Apart from online sales, the companying is also expanding its store network in metros and smaller cities. Pepperfry stores do not serve as sales points but are experiential centres where the customer can feel the products and interact with the company staff.
“From the current 103, we plan to reach the 200 studios mark by March 2022. We will be targeting North India — places like Manali, Leh, and Chandigarh, and western UP,” Shah told Financial Express.
The online furniture and home décor startup compete with vertical e-tailers like Urban Ladder, which specialises in one category of goods, and horizontal players Flipkart and Amazon India that sell goods in multiple categories.
A 2020 report by RedSeer Consulting pegged the Indian furniture market at $16 billion in size. It said the online furniture business was growing at a CAGR of 80-85 percent, dominated by metros and tier-1 cities.
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