Wooden Street, the omnichannel furniture company, is in advanced stages to raise around Rs 200 crore (about $25 million) from Premji Invest, people aware of the development. The Series C round values the company at Rs 1,500-1,600 crore or $180-200 million, they added.
The funding comes at a time when omnichannel, which combines physical stores with digital platforms, is becoming an important strategy for investors in the consumer space. Venture Capital funds are pushing digital-only startups to also create an offline channel after they achieve a certain scale to increase revenue streams and tap a larger customer base.
Rajasthan-based Wooden Street, which sells home décor items and other customised furniture, has over 100 stores across India and is launching around 10 more each month as it doubles down on its omnichannel strategy. Overall, including online channels, the company has over 350 delivery points.
It plans to further increase those touchpoints. In April, the company said it is investing Rs 50-70 crore to build its manufacturing facility in Jodhpur, Rajasthan. The 10-lakh square feet plant helped push up its production capacity to 4-5 lakh units per annum. Wooden Street hopes to enhance its total output with the latest fundraise, a majority of which will go towards business expansion.
The interest is also because Wooden Street has displayed financial prudence. In FY23 the company, founded by Lokendra Ranawat, Virendra Singh Ranawat, Dinesh Pratap Singh and Vikas Baheti, clocked a revenue of Rs 194 crore and a profit of Rs 1 crore.
On a year-on-year basis, while the topline jumped around 48 percent, its profit reduced slightly from Rs 1.2 crore from the FY22 figure.
Wooden Street, which also raised $30 million in a round led by WestBridge Capital in 2022, competes with Swedish giant IKEA, Peak XV-backed Wakefit, Furlenco, Pepperfry, Urban Ladder and other furniture makers.
All these companies, similar to several other consumer companies, are focusing on their omnichannel strategy in India by growing their network of brick-and-mortar stores. Even IKEA, which was primarily an offline-heavy business, is increasing focus on sales from online channels to go beyond the top Indian cities and reach more customers.
An increasing number of brands are also focusing on a mix of online and physical channels because of higher customer spends. An omnichannel shopper spends 2.5X more than a single-channel shopper according to a recent report by Redseer, Accel and Fireside Ventures. Digital will also influence a significant part of the purchases that happen offline, the report added while emphasising on the need for an omnichannel approach.
