Bengaluru-based D2C furniture and mattress startup Wakefit’s net loss widened 1.3X in the financial year ended March 31, 2023. The Investcorp-backed startup reported a net loss of INR 146 Cr in financial year 2022-23 (FY23), an increase of 37% from INR 107 Cr in the previous fiscal year.
Founded in 2016 by Ankit Garg and Chaitanya Ramalingegowda, Wakefit sells varied sleep and home-related products like mattresses, pillows, bed frames, mattress protectors, sofas, study tables, bookshelves, shoe racks, and TV units. Besides its own website, the startup sells its products through its retail stores and ecommerce marketplaces like Flipkart and Amazon.
The startup’s revenue from operations increased 28% to INR 813 Cr during the year under review from INR 632.5 Cr in the previous fiscal year. Wakefit primarily earns revenue from sales of its products. It earned INR 796.8 Cr from sales of its products during the year under review.
Including other income, Wakefit earned INR 820 Cr in FY23, a jump of 28.7% from INR 637 Cr in FY22.
Zooming Into Wakefit’s Expenses
The startup’s total expenses increased 30% to INR 965.6 Cr in FY23 from INR 743.5 Cr in the previous fiscal year.
Cost Of Material The Biggest Contributor: Being a D2C brand, cost of procurement was the biggest contributor to Wakefit’s expenses. It spent INR 471.7 Cr on procurement of materials during the year under review, accounting for 49% of total expenses. Cost of materials consumed rose 24% from INR 380 Cr in FY22.
Advertising Expenses See Steady Rise: Advertising expense is one of the major expenses for a majority of D2C startups. However, at INR 95.9 Cr, it accounted for just 9.9% of Wakefit’s expenses in FY23. However, advertising expenses did rise 57% from INR 61.2 Cr in FY22.
Employee Benefit Expenses: Wakefit’s employee benefit expenses rose 16% to INR 105.7 Cr from INR 91.5 Cr in FY22.
The startup’s EBITDA margin improved to -10.4% in FY23 from -11.7% in FY22
Wakefit, which initially sold only mattresses before foraying into the furniture segment in 2020 during the pandemic, has raised a total of $145 Mn across multiple rounds till date. Earlier this year, it raised $40 Mn in a funding round led by Investcorp, Peak XV Partners, VerlinVest, and SIG among others.
In the mattress market, Wakefit competes against the likes of Sleepwell, The Sleep Company, and Sleepyhead. In the furniture segment, it is pitted against Pepperfry, Woodenstreet, Urban Ladder, among others.
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