Leading home interior brand HomeLane’s parent company, Homevista Decor & Furnishings Pvt Ltd, is set to acquire Westbridge Capital-backed DesignCafe in a share-swap transaction for an undisclosed amount. At the same time, HomeLane, which is backed by investors such as Peak XV Partners, Evolvence, Accel, JSW Partners and Pidilite Group among others, has also raised ₹225 crore in a new funding round. The combined entity is being valued at ₹3,000 crore.
Srikanth Iyer, Co-Founder, HomeLane, told businessline, “The combined entity will aim to achieve revenues of ₹1,000 crore and be EBITDA-profitable in FY25. This move is poised to unlock significant synergies across areas such as manufacturing, design, procurement and technology.” He added that the combined entity is already at an ARR of ₹900 crore and is cash profitable. The acquisition is subject to regulatory approvals.
“In the near term, we are looking to accelerate the growth of the combined entity leveraging on the combined strengths. We are also looking at the potential to go for an IPO in the next one-two years. In the long term, we will be building the largest player in the home interiors space. Looking at trends in home-buying and home renovations space, we believe this business can grow at 25 per cent year on year,” he added.
Shezaan Bhojani, Co-Founder, DesignCafe, added, “Becoming a part of the HomeLane family will enable us to maximise outcome for our shareholders, which includes our investors and consumers. The larger and more stable entity that will be formed will leverage on a lot of synergies including our design expertise and enable us to grow faster.”
Funding round
The funding round of ₹225 crore for the combined entity saw the participation of existing investors of both HomeLane and DesignCafe. It also saw the participation of Hero Enterprise as the new investor. Sunil Kant Munjal, Chairman of Hero Enterprise, said, “Our investment reflects confidence in their business model and it also presents meaningful synergies with Hero Realty.”
HomeLane, Doowup and DesignCafe will continue to operate as distinct end-to-end home interiors brands, each catering to different segments of the market, the official statement added.
Iyer said that the funds will be used for expansion, brand-building as well as technology. “The combined presence of both the brands is spread across 25 cities. So we will focus on going deeper in these existing cities as well as adding new cities,” he added.
DesignCafe was founded in 2016 by Gita Ramanan and Shezaan Bhojani, and has designed and delivered over 15,000 homes across the country. Established in 2014, HomeLane has served over 45,000 customers across 30 cities through its over 60 experience centres.