Sleep and home solution startup Wakefit announced on Thursday that it has raised $28 Mn or INR 200 Cr in a Series C round. U.S. based SIG led the round while existing investor Sequoia Capital and Verlinvest also participated in the funding round. The company commanded a valuation of around $375 Mn or INR 2,800 Cr in the latest round.  

Notably, the Bengaluru based startup had raised INR 185 crore in a series B round earlier this year. In the series B, the company was valued around INR 1,900 Cr.

The company said that it will use the capital infusion for setting up its offline experience centers, streamlining supply chain, managing logistics and ramping up hiring. Additionally, it will use funds for increasing its product offering across different verticals. The company had recently forayed into home furniture and sleep accessories market while it has plans to foray into home interior market.

Started in 2015, Wakefit was launched as an online mattress seller that manufacture mattresses and sells them directly to the end customers. Since then the company has seen its brand equity rising despite having many legacy player competing in this market.

Wakefit is a rare breed among Indian startups as it claims to be a profitable company. A rare distinction that it claims to have achieved merely six months after the company started its operation. As for 2021, the company claims that its revenue has touched almost INR 410 Cr.

Wakefit’s profitability is even more praiseworthy considering that the company manufactures its own mattresses. For manufacturing startups it is never quite easy to achieve profitability, more so in a market that has many established and legacy players.

Wakefit’s second funding this year sums up investors upbeat mood around D2C brands. This year two big D2C brands MyGlamm and Licious have turned unicorn.     

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The company did not disclose the names and identities of these 15-20 employees. The Bengaluru-based company will allocate 6-7% of the company’s shares to the ESOP pool. The company further added that it will also add another 50-60 employees into the existing ESOP pool, which will give benefit to early employees of the company.

The allotment of ESOP pool has come on the sidelines of the Series B round, where the company raised a whopping INR 185 Cr at a valuation of INR 1,900 Cr. European investment firm Verlinvest and Sequoia Capital India spearheaded the bumper round.

Speaking about this development, Chaitanya Ramalingegowda, Co-founder & Director, Wakefit.co said, “At Wakefit.co, we have always believed that our employees are one of our biggest assets and the best ambassadors of the brand. Promoting and protecting their interests and keeping them motivated is paramount to our success, as we go about achieving our growth targets.”

He further added “During the Covid-19, we ensured that our employees felt secure in their jobs and had the financial and moral support needed to battle the pandemic together. Our workforce has stood together to set us on course to reach INR 450 crores by FY 2021 and we felt it was only fair that we make senior members of our team part of this growth journey. We hope that the ESOPS buyback option will continue to add value to our employees’ lives and keep them motivated, as we venture into a new year poised with exciting challenges.”

Ramalingegowda on the impact of pandemic & 2021 projection

Ramalinegowda shared his thoughts on the impact of COVID 19 on Wakefit’s business…

“The year 2020 has been unexpectedly tumultuous for everyone. Brands that showed resilience, invested in innovation and creatively engaged with their customers, emerged out of the crises successfully.”

“The first two months of the lockdown were undoubtedly hard but with businesses gradually resuming from May onwards, we were able to revive demand successfully and have now exceeded pre-Covid numbers. This year was an inflection point for D2C brands and truly tested the way they continued their customer outreach, seamless deliveries and constant focus on innovation, despite all the fear and uncertainty. In fact, 2020 saw Wakefit.co crossing multiple milestones – from expanding our product portfolios, entering newer markets to ending the year with funding from investors. This is testimony to our vision of being India’s most loved D2C brand in the sleep and home solutions space.”

Commenting on 2021 projection, he said “Wakefit aspire to maintain the same pace in 2021 and will continue to delight our customers. We will be expanding our workforce by 400% by March 2021 and accelerating our efforts to reach every Indian across the country.“

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The company said that it is hopeful that this fresh investment will help in clocking INR 450 crore in FY2021. The Bengaluru based startup further added that it is in the process of hiring nearly 200 people in the upcoming months for speeding up its growth.

The latest investment will be mainly catered in helping the company in strengthening its presence in the home solutions space – mostly constituting of ‘home furniture category.’ The company is planning to achieve this ambitious goal by ramping up its manufacturing capabilities, in-house R&D and Direct-to-consumer DNA and a continuing focus on engineering products.

Currently, Wakefit has 5 manufacturing facilities including two in Bengaluru, two in Jodhpur, and one in Delhi.

Following the fresh investment, Wakefit is planning to unveil new manufacturing facilities in Jodhpur and Delhi.

The company said that its success in online mattress and sleep solutions will help in inspiring its efforts to create a niche for itself in the home solution space.

Commenting on the Investment move, Chaitanya Ramalingegowda, Co-founder and Director, Wakefit.co, said, “National and International trends indicate the rise in demand for sectors such as home solutions, digital services, gaming, and in-home entertainment. Our move to enter into a challenging but incredibly opportune market has come at the right time since e-commerce is at its inflection point given the headwinds faced by the traditional offline segment due to the pandemic and the changes it has brought in consumer behavior.”

“We believe that home is now truly where the heart is. A lot of emotion and thought goes into creating a home, and at Wakefit.co, we are committed to enhancing this experience by providing people with quality products at optimal value,” added Ramalingegowda.

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