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Sheela Foam Ltd, the Delhi-NCR-based furniture maker known for Sleepwell mattresses, has acquired Kurlon Enterprises Ltd and Furlenco parent, Kieraya Pvt Ltd, it said on Monday.

The company acquired a 35% stake in Furlenco for Rs 300 crore, aiming to enter the branded furniture market, it said in a regulatory filing. The deal will also enable Sheela Foam to expand its online furniture catalogue through Furlenco’s modern and youth-friendly selection.

Furlenco’s acquisition is expected to be completed by August 31, 2023, subject to working capital and other adjustments, the filing read.

Founded in 2012 by Ajith Mohan Karimpana, Furlenco rose to be one of the top players in the online furniture rental space alongside rivals Rentomojo, Guarented, Pepperfry, and Rentickle. It has raised upwards of $96 million so far from marquee investors, including Lightsoil, Blacksoil, and Eudora Ventures.

In 2019, Karimpana told YourStory that it was on track to becoming the first furniture rental company to hit Rs 100 crore in revenue, owing to its positive unit economics.

However, last year, the Bengaluru-based company let go of 180-200 employees as part of a cost-cutting measure, joining several startups, including BYJU’S, Unacademy, and Pristyn Care.

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Sheela Foam also acquired a 94.66% stake in Kurlon Enterprises Ltd (KEL) for an equity valuation of Rs 2,150 crore for 3.46 crore shares. The deal will help Sheela Foam consolidate the fragmented mattress and foam-based products market in the southern and eastern parts of India, it said.

Sheela Foam is also likely to benefit from KEL’s diverse distribution network and create manufacturing synergies.

KEL’s acquisition is expected to be completed by November 30, 2023.