Pepperfry may file IPO by next June

The omnichannel retailer claims it was at the peak of profitability last year, but instead focused on growth.

While the company has started working towards public listing, it is also expanding its offline presence by expanding its store network in metros and smaller cities. Pepperfry stores are primarily experiential centers and not for selling products.

“We are raising a pre-IPO round between $50-100 million. While we have enough money in the bank, we will raise more money to get a good group of investors on our side before going for the IPO. Ashish Shah, Co-Founder and Chief Operating Officer, Pepperfry said in an interview, “We are fortunate to have large investors on our board and we would like to have more such great names.

In the relatively young online furniture market, Pepperfry competes with vertical e-tailers (who specialize in one category) and horizontal players such as Amazon India and Flipkart (who sell products in different categories), which are expanding their furniture offerings. are.

There has also been considerable consolidation with Reliance Industries Limited’s (RIL) acquisition of Urban Ladder Home Decor Solutions Pvt Ltd, an online furniture vendor. Ltd. last year expanded its presence in India’s fast growing e-commerce market.

Since 2018, Pepperfry has been working to become profitable and has focused on reducing costs and minimizing losses.

“In August last year, we were close to profitability. Until the second wave, we had a very good ride in business. But we also realized that we can profit from our will. This year, we decided to expand the business significantly. Hence, the focus is now on higher growth,” Shah said.

Pepperfry registers 26% growth in revenue ₹260.61 crore and reducing the deficit by 33% ₹122.31 crore in 2019-20.

Earlier this year, Pepperfry received ₹35 crores from InnoVen Capital, venture loan into the online furniture market and third investment by the specialized firm.

In September 2020, Mint first reported that Pepperfry was looking to launch an IPO within 12-18 months. Co-founder and CEO Ambareesh Murthy then said that for an IPO, a track record of at least 6-9 months of profitability is crucial to show that the business can make money.

According to a report by RedSeer Consulting, the online furniture business has increased its share due to experience stores and various models offering quality furniture at affordable prices.

The online furniture market is growing at a CAGR of 80-85%, dominated by metros and tier-1 cities and driven by the ease of comparing products and offering low prices.

Furniture sales reached $700 million in 2019-20, but online accounted for less than 3% of the total furniture market, which is estimated at $17 billion.

With furniture being a non-essential category, business was affected during the lockdown due to the first and second wave.

After the second wave, Shah said there has been a boom in business since July. The company has launched its 100th studio in Lucknow to increase its offline presence.

“Omnichannel is an important strategy for us, and with these stores, we are also activating new and smaller markets,” he said.