Sequoia Capital joins $25m round for Indian home solutions startup Wakefit

Wakefit, India’s sleep and home solutions company, announced that it has secured 1.85 billion rupees (US$25.1 million) in a series B funding round led by European investment firm Verlinvest.

Existing investor Sequoia Capital India also joined the round. In 2018, the Indian startup closed 650 million rupees (US$8.8 million) in a Sequoia Capital-led round.

Wakefit CEO and co-founder Ankit Garg / Photo credit: Wakefit

Founded in March 2016, Wakefit is a direct-to-customer firm that provides sleep and home solutions.

With a portfolio that includes mattresses, pillows, bed frames, mattress protectors, comforters, neck pillows, and back cushions, it has recently expanded into home solutions to include furniture such as study tables, bookshelves, and TV units, among others. It sells its products through its own online portal and other online marketplaces.

The firm claims that it has been profitable since its inception, with revenue growing from 800 million rupees (US$10.9 million) in FY 2019 to 1.99 billion rupees (US$27.1 million) in FY 2020. Wakefit is also targeting to reach 10 billion rupees (US$136 million) in revenue by 2023.

With factories in Pune, Delhi, Jodhpur, Hyderabad, and Bengaluru, it plans to use the fresh funds to expand into Tier 2 and 3 markets, which take up 30% to 35% of the demand for sleep and home solutions across India. Wakefit is also planning to set up experience centers in a few cities to pilot its expansion.

With a team of about 600 employees, it will increase its workforce by 400% to 3,000 employees by March 2021.

“The home solutions segment in India is largely unorganized with a broken customer experience, thereby providing immense potential for disruption. Current tailwinds have created a systemic shift toward online shopping, which offers potential for a digital-first player like Wakefit to organize the market,” said Verlinvest investment professional Manvitha Janagam.

According to Wakefit, citing a Redseer report, the furniture segment in India is currently worth US$16 billion. Meanwhile, the sleep solutions sector in the country is growing, with the mattress market to reach US$2.5 billion by 2022.

Currency converted from Indian rupee to US dollar: US$1 = 73.58 rupee.