HomeLane Acquisition Boosts Rs 225 Crore in Funding

The home interior and renovation platform HomeLane has announced its proposal to acquire its smaller rival DesignCafe. It is one of the leading players in the home interior market.

The acquisition, awaiting its functional approval, is anticipated to be one of India’s largest interiors companies.

The combined entity will cater to more of niche premium target market, and affordable home interior division. Doowup, will continue to function as separate brands, catering to different segments of the market.

Uniting with HomeLane to its profit journey

The company also announced a Rs 225 crore ($27 million) funding round, which includes investments from existing backers of both HomeLane and DesignCafe, along with new funding from Hero Enterprise.

This news has brought a glimmering scope for the company to achieve a fantastic revenue of up to Rs 1000 crore approximately ($120 million) in the financial year 2025 which will bring an amazing hike of 33% increase from its initial Rs 670 crores (approximately $92 million) in the financial year 2024, and to become EBITDA (earnings before interest, taxes, depreciation, and amortization) profitable.

Ebitda, or earnings before interest, tax, depreciation, and amortization, is a key metric of functional efficiency of a company.

Companies of scale

The country’s home interiors segment which has been marked to be a $20 billion industry is largely driven by unorganized local players and has witnessed a small number of businesses emerging.

Although, companies like HomeLane and Livspace have fortunately been able to achieve some scale as they have crossed the Rs 1,000 crore mark, many other firms have struggled tremendously to grow their businesses successfully.

The companies that were able to manage the storm and beat it are highly benefiting from a boom in real estate sector as enormous projects were launched during the COVID pandemic which have begun materializing and are expected to produce a stable pipeline for the next coming years.

The managing partner of Westbridge Capital, Sandeep Singhal had commented that both the teams have demonstrated strong execution in the past, and together they plan to deliver industry-leading performance for all their stakeholders.

Westbridge Capital have also participated in HomeLane’s recent fundraising round.

Logistics of the company

HomeLane had been founded 10 years ago and also operates Cubico for corporate interiors and Wrapzap. It consists of 45,000 customers over 30 cities.

Design Cafe was founded in the year 2016 by Gita Ramanan and Shezan Bhojani, and it has raised nearly $30 million in funding till date, which is inclusive from WestBridge Capital, Sixth Sense Ventures, Mirabilis Investment, Alteria Capital, and Fireside Ventures.

The company that also manages the Qarpentri brand of mass home interior solutions and is present in 10 cities through the country.

Future of Funding

Even though the combined entity will be catering to a more of niche premium target market, Doowup will be continuing to operate as different brands and will cater to distinct segments of the market.

This acquisition is prepared to unlock major synergies across areas such as design, manufacturing, procurement, and technology. This will be enhancing operational and functional efficiency, drive innovation and customer satisfaction across the combined offerings of the entity.

Srikanth Iyer and Tanuj Choudhry, co-founders of HomeLane, jointly said that the combined entity is already at a revenue ARR of Rs 900 crore and it is cash profitable and at -2% EBITDA.

Conclusion

HomeLane has announced its proposal to acquire its smaller rival DesignCafe. It is one of the leading players in the home interior market.

The merged entity will cater to more of niche premium target market, and affordable home interior division. Doowup, will continue to function as separate brands, catering to different segments of the market.

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