HomeLane Witnesses Strong Revival In Business Post Lockdown
Home interiors startup HomeLane, which had announced a Rs 60 crore fund raise from Stride Ventures and others in August this year, has also become EBIDTA positive, with monthly revenue currently at about Rs 27 crore. The startup further eyes Rs 300 Cr revenue in FY21.
HomeLane on Sunday said it had seen strong revival in business after the lifting of lockdown, with its order book growing 5-7 percent month on month, and expects to close the current fiscal year with gross revenue of more than Rs 300 crore.
The home interiors company, which had announced a Rs 60 crore fund-raise from Stride Ventures and others in August this year, has also become EBIDTA positive, with monthly revenue currently at about Rs 27 crore. "The pandemic has been a mixed bag for the interior design industry.
On one hand, we have had customers spending more on their home decor/interior needs and on the other hand, movement restrictions due to regional lockdowns have led to shortage of labour and other logistics complications," HomeLane Founder and CEO Srikanth Iyer said.
However, recovery since July-August has been better than expected, he added. "On the fixed cost side, there have been unprecedented opportunities to cut costs and get towards profitability ahead of time. In a way, the pandemic has shown us ways which we would not have discovered on our own," Iyer said.
He noted that the company has witnessed a "much stronger than expected rebound in revenue" with demand picking up after a brief lull, and its supply chain getting back to near full strength.
Iyer said the company was eyeing stronger growth in monthly order volumes from fourth quarter onwards as the consumer shift towards branded offerings picks up momentum, and is looking at exiting the current fiscal with 600 new monthly orders.
"Today, we are delivering 500 projects a month. Growth in business was also driven by bundling new services, growth in the renovation category and new market entry. "The bundled services introduced by HomeLane increased the average order value by 10 percent, which now stands at Rs 7 lakh per order," he added.
Bundled offerings include end-to-end products and services including core modular furniture, loose furniture, appliances, and services such as painting, false ceiling, home automation, among others.
From 12 cities to 25 cities "Bundled offerings are expected to contribute 40 percent of the incremental revenues from Q4 onwards.
We expect to close the current fiscal year with gross revenues of more than Rs 300 crore," he said. Iyer further stated that the company aims to be profitable at EBIDTA level (Rs 15 crore by March 2021) from losses last fiscal. EBITDA (earnings before interest, taxes, depreciation and amortization) is a measure of a company's financial performance and profitability, and is often used for comparison with peers in the industry.
In FY20, HomeLane had posted operating revenue of Rs 230.4 crore and had received orders from about 6,800 customers (up from about 2,900 customers in FY19). Iyer said HomeLane's fixed costs had declined by 30 percent (aided by corporate cost reduction of 90 percent).
"Currently, we are present in 12 cities and are expanding our operations to 25 cities by the end of 2021. Our expansion plans are significantly focused on tier 2 cities. Additionally, we are ramping up focus on renovation and growing focus on bundled offerings as consumers seek end-to-end providers," Iyer said.
He added that HomeLane's customer conversion has increased from 18 percent during pre-COVID period to 20 percent during the pandemic. HomeLane has raised over Rs 370 crore in funding from Growthstory, Aarin Capital, Sequoia, Baring, Pidilite, Evolvence, Accel, JSW Ventures and Strides Ventures.
Promoters, founders and ESOPs totally constitute about 37 percent of the total holding. India's interior service market is estimated to be around $18-20 billion, and is largely driven by demand from renovations, followed by new homes.
The organised component is estimated to be just 10 percent. Growing internet penetration and adoption of tech-led services are expected to drive growth for the segment as well as expansion of players.
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