Another round of funding please, says Urban Ladder as it talks to its new and existing investors for Rs.170-200 crore ($25-30 million). Two persons aware of this development stated that the existing investors, Sequoia Capital, Kalaari Capital and SAIF Partners, will provide the online home décor solutions company around Rs.100 crore. The remaining amount is expected to come from new investors.
With fresh funds from investors, Urban Ladder is expected to fuel its offline ventures. These funds are also likely to give it an edge over its competitors, Livspace and Pepperfry.
“The existing investors had already committed about Rs100 crore to fund the offline expansion. The company is getting one new investor on board in this round who will invest another Rs100 crore,” said one of the sources stated above.
Where does Urban Ladder stand against its competitors?
In April 2015, Urban Ladder Home Décor Solutions Pvt. Ltd raised its last equity funding of $50 million. Since the time it was founded in 2012, it managed to raise $77 million in equity and $3 million in venture debit.
Pepperfry is well funded on the other hand with about $159 million as funding.
The online furniture etailer, Urban Ladder saw a 3 fold rise in losses according to Registrar of Companies (RoC) records, back in March 2016. The total losses incurred were Rs.181.3 crore from the previous fiscal year’s Rs.58.5 crore. These losses were a result of high employee and advertising expenditures. In spite of this, the etailer’s revenue grew 2 and half times more from Rs.13 crore to Rs.34.4 crore.
Competitor Pepperfry, showed much higher revenues and lower losses in comparison for the fiscal year 2015-16. RoC documents show that in the last fiscal, Pepperfry earned Rs.98 crore from Rs.25 crore, which is a 4 fold increase. In terms of losses, from Rs. 80 crore in 2015-14 its losses grew by Rs.154 crore.
What is Urban Ladder doing to increase investor interest in funding?
The online furniture retailer launched a new brand identity and has shifted its focus on bettering quality and customer services. It is also working on broadening its offline distribution channels, beyond the centres it owns.
It is looking at launching 3 experience centres in Bangalore and forming partnerships with large format retail stores. At the same time, the company is planning on gaining assistance from local furniture stores. Through kiosks, it wants to display the Urban Ladder catalogue.
Based on an earlier report, the company is also eying partnerships with paints and white goods appliance brands. The company has its products listed on Amazon and Flipkart as well to increase visibility and exposure.
In addition to all these steps, the etailer is also looking to cut down its list of products. In October, one of the founders, Ashish Goel said that Urban Ladder reduced its product numbers from 5,000 to 4,000 about a year ago. Now, it is looking at further refining its list to about 3,500- 3,000 in another year’s time. He believes that this move should give the company the ability to focus better on customer service and delivering high-quality goods.