Online furniture marketplace Mebelkart.com, which had raised $20 million in a Series A funding from local search platform AskMe.com last August, will close a fresh round of funding from Indian and international investors by the month end.
According to sources, the company could raise between $25-40 million from investors, this time around.
The fresh fund raise in less than a year is because Malaysian firm Astro All Asia Networks plc, which has over 95 per cent stake in the AskMe Group, is exiting all its business investments in India as a result of some legal issues.
Confirming the development, but declining to disclose the fresh amount being raised, Rahul Agrawal, co-founder and CEO of Mebelkart.com, told BusinessLine that the AskMe Group has made a management buyout bid and the leadership team, which is working towards taking over the company, is in advanced discussions with a few strategic and financial entities for the next round of funding.
Founded in 2012, Mebelkart.com is the number three player in the online furniture market after Pepperfry and Urban Ladder.
Diversification Stating that India’s furniture market is expected to cross $32 billion by 2019, of which the share of online furniture market is pegged at 20 per cent, Agrawal said: “Besides rising demand for furniture and home décor, demand for home interior fit-outs, furniture rentals and luxury-class furniture is burgeoning on our platform.”
To meet this demand, the company has introduced a new category of luxury furniture and home décor line this month, priced from ₹4,275 for a crystal glass ashtray to ₹11.5 lakh for an elaborate, natural Indonesian-wood centre-table.
Interior fit-outs Home interior fit-outs are being piloted in Bengaluru over the last few months with a total of 20 homes completed to date.
“We are entering the furniture rentals business and have already done a soft launch in Delhi, Mumbai and Bengaluru.
“The market for furniture rentals in India is pegged at $800-850 million by 2025,” said Agrawal.
Most of the growth for online furniture companies over the next two years will come from home furnishings/décor and services such as furniture rentals and home interior fit-outs and not from big-ticket furniture items which customers would love to touch and feel before buying, noted Anil Kumar, founder CEO of RedSeer Consulting.
While Mebelkart has grown its revenue run-rate from ₹4.8 crore last August to ₹120 crore in May 2016 — despite spending ₹2.5 crore in marketing last Diwali — it took a knock with festive sales yielding just ₹1.5 crore in sales.
“We are working on improving customer experience, and unlike our rivals, who incur 20 per cent in logistics and shipping costs, we incur just 8-9 per cent as we have local partners in every city and do not incur huge transportation and storage costs,” Agrawal said.
Mebelkart has over 500 sellers, attracts 80,000 daily visitors, of which 15,000 are organic and the rest are paid for through Google Ads.
The website offers 3,50,000 SKUs (stock keeping units) (1 lakh are furniture) to 20,000 pincodes covering 200 cities in India.