Sleep solutions startup has secured $22 million (Rs 184 crore) in Series C funding from existing investors Premji Invest and Fireside Ventures. The fresh infusion of capital comes a year after it had raised nearly $21.3 million from the same investors.
The Mumbai-based company is now valued at more than 2X of its previous funding round, Co-founder Harshil Salot told YourStory, without divulging absolute numbers.
It aims to turn profitable by the end of FY25, affirmed Co-founders Harshil and Priyanka Salot. The company witnessed business growth of 2.6X in the last 12 months.
The Sleep Company will use the funding to diversify product offerings, including expanding SmartGRID-based products in additional product categories and marketing efforts to enhance brand visibility. Its mattresses are equipped with a patented technology called, ‘SmartGRID’.
Started as a D2C brand in 2019, the company also sells pillows, cushions, sheets, and chairs. In March 2022, The Sleep Company expanded to have an omnichannel presence, with its first offline store in Bengaluru. To date, it has over 60 retail stores, along with 16 experience centres across more than 20 cities.
In the next six months, the company aims to open a total of 100 stores, with a special focus on Tier II and Tier III markets, Harshil told YourStory.
“The offline stores are working very well for us and are already contributing 50% to the business. The idea is to maintain the momentum of expansion and touch 100 stores by March 2024 and 200 by March 2025. A significant portion of the funding will be used to improve distribution and footprint expansion,” he continued.
The sleep solutions company logged a revenue of about Rs 130 crore in FY23 and expects to earn nearly Rs 350 crore in FY24, he added.
Priyanka attributes the strong growth story to three main factors.
“Firstly, we have always had a strong focus on innovation and have not created a me-too product. Our customer-acquisition costs (CAC) remain a plus point and don’t bleed money with every order. Secondly, our omnichannel focus has helped bring better conversion rates since mattresses are a touch-and-feel category.” Lastly, laser-sharp focus on backward integration, complete in-house manufacturing, and the absence of middlemen help in offering better prices to consumers, Priyanka said.
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“Our journey is defined by remarkable growth and expansion. We have witnessed an impressive 6X growth in two years; reaching an ARR of over Rs 350 crore, as of September 2023; a significant leap from Rs 60 crore in November 2021. We are confident that we are building a long-term, sustainable, and profitable business,” she added.
Speaking on the investment, Varun Khandelwal, Principal of Investments at Premji Invest, said, “The company’s remarkable journey since 2019, marked by aggressive omnichannel growth and strong unit economics, has solidified our confidence in their capabilities. In line with our investment thesis of omnichannel across consumer brands, we are reaffirming our support to The Sleep Company by doubling down on our initial investment.”
“At Fireside Ventures, we recognised the immense potential of The Sleep Company, and in a year’s time, we are thrilled to see their exceptional growth trajectory, their drive towards a powerful omnichannel strategy and their consistent profitability. This all-round performance reinforced our confidence in them. It has, therefore, been an easy decision for us to support them in this financial round,” Dipanjan Basu, Co-founder and Partner at Fireside Ventures, added.
Edited by Suman Singh
