Home design and renovation platform Livspace has raised about $60 million from Hong Kong-based Tahoe Investment Group, and Singapore-domiciled Mercer Investments and EDB Investment, along with Kharis Capital, a European investment management firm and Venturi Partners’ managing director Nicholas Cator in his personal capacity, according to regulatory filings sourced from Singapore.
The investment has been made across multiple allotments and is likely to close next month in a round which could go up to $90-$100 million, people familiar with the matter said.
Livspace has raised about $150 million till date, according to share allotment disclosures made by the company. The company last raised$70 million in 2018, led by private equity firm TPG Growth and Goldman Sachs. Livspace declined to comment.
The round closure indicates that investors are increasingly betting on specialized vertical marketplaces to place large bets as they believe these companies are better poised to deliver profitable returns. It also comes at a time when the market for a horizontal player has, more or less, been capped with Walmart-owned Flipkart and Amazon.com.
From FirstCry, Lenskart, UrbanClap to CarsDekho, and the latest entrant Livspace – over the last year, most vertical market leaders in the consumer internet space have raised close to $100 million in growth capital.
“The laser focus and sector specialization helps these businesses engineer the user experience on a category… and enables them to go lower down in the value chain leading to better margins, and economics,” said a partner at a top venture fund who has backed three such businesses.
Livspace connects designers with customers as well as suppliers and, at the backend, operates a very complex supply chain to maintain delivery timelines. The company takes end-to-end ownership of a housing project, right from design to manufacturing to installation. The business also operates brick and mortar design studios.
In October, the company said it had launched in its first international market — Singapore — and plans to make the island city its base for all Asia-Pacific markets including Malaysia and Australia.
IKEA’s largest franchise partner, Ingka Group, has invested about $14 million in the company, marking the Swedish home furnishing company’s first financial investment in India.
For the fiscal year ended March 2019, Livspace-run Home Interior Designs E-Commerce reported revenue of Rs 80 crore on a loss of Rs 146 crore, of which employee benefit expenses stood at Rs 90 crore and marketing at Rs 50 crore, regulatory filings show.
Livspace was founded in 2015 by former Google executive Anuj Srivastava and Ramakant Sharma, who was earlier with Myntra, along with Shagufta Anurag, founder of architectural design consulting firm Space Matrix.