Furniture and Home Marketplace Pepperfry.com has raised Rs 250 Crore in a fresh round of funding from State Street Global Advisors, the asset management business of State Street Corporation (NYSE:STT), which is one of the world’s largest investment management companies with $2.78 trillion in Assets Under Management.
In its capacity as an advisor and manager of private equity, State Street Global Advisors joins marquee names such as Norwest Venture Partners, Bertelsmann India Investments, Zodius Capital and Goldman Sachs who have previously invested in Pepperfry. Including this current round, Pepperfry has raised over Rs 1200 Crore of capital since it began operations 6 years ago. This is the highest amount of capital raised by an e-commerce Furniture and Home products company in India.
Home Furniture and Décor is amongst the largest consumption categories in India, expected to reach Rs 350,000 crore in market size by 2020. Pepperfry identified and leveraged the opportunity presented by the highly fragmented nature of this category to differentiate across the value chain, building supply and demand side differentiation by working with thousands of Small Manufacturers, developing an extensive portfolio of Private Brands, establishing an omnichannel footprint of over 25 Pepperfry Experience Centers and building India’s largest consumer-facing Big-Box supply chain serving customers in 500+ Indian cities.
Pepperfry is today well positioned with deep moats providing significant competitive advantage, the ability to command superior product margins on its marketplace and top of mind brand recall. Pepperfry’s revenue has grown at a CAGR of over 83% in the last 5 years and with this fresh round of investment, it aims to accelerate past the break-even point and become a profitable business over the next 12-18 months.
The fresh funds will be deployed to expand Pepperfry’s Experience Centers in Tier II Towns, invest behind developing AR/VR technology for virtual touch and feel, and enhance the Private Brand franchise in preparation for its next financial milestone of an IPO.
Ambareesh Murty, Founder & CEO of Pepperfry, said, “We have been fortunate to have partners who believe in our business, are aligned with our strategy and value our execution capabilities. I welcome a marquee investor like State Street Global Advisors to Pepperfry and look forward to their partnership in this new phase of our journey.”
Anandh Hari, Managing Director Private Equity, State Street Global Advisors, said, “We are excited to enter the Indian e-Commerce market through our investment in Pepperfry. India’s large Furniture and Décor market is ripe for disruption and we believe that Pepperfry’s unique strategy, proven execution capabilities and passionate team are the perfect ingredients for success.”
Niren Shah, Managing Director, Norwest Venture Partners and Pepperfry’s earliest investor, said, “We believed in Ambareesh and Ashish’s vision for Pepperfry 6 years ago and it has been great to see that vision crystallize and grow through the years. It has been a fantastic journey.”