Last December, omni-channel furniture retail start-up Urban Ladder shed its marketplace model to start selling its own branded products.

“It has been a game changer for us,” co-founder and CEO Ashish Goel told BusinessLine . It brought much-needed clarity to the start-up which, for most of its six-year journey, was floundering to a point that not many gave it much of a chance to last the distance, he recalled.

“If you look at the RoC reported numbers, it doesn’t tell you the right picture. After we got the licence we turned our business model from a marketplace to a buy & sell model from December 15 2017. When you see the financial numbers of FY19, it will give you an accurate picture,” said Goel, who once worked with consulting major McKinsey & Co.

The furniture market in India is worth about $18 billion, of which nearly 90 per cent is unbranded. Players like Urban Ladder and Pepperfry are trying to get a slice of the remaining 10 per cent and, over the next few years, expect to increase the share of the branded market by another couple of billion dollars.

Since the change of model, Urban Ladder seems to have received a new lease of life and its co-founders are busy trying to raise $25 million from new investors. “We have got our business to a point where we have done all the brand investments. We are at a very, very good place actually. We have the cash for the next 18 months but the new funds will go into investing in the retail rollout. We will be raising $25 million in primary capital, which will take the total investment to $125 million -130 million,” said Goel.

The founders are looking at an IPO in three years. “We will be nine years old by then and I believe it is the right time to go public,” said Goel. By then, he expects Urban Ladder to post PAT of over ₹50 crore (from a ₹160-crore loss in FY17) and revenues of ₹800-900 crore from the current level of ₹300 crore. The company is looking at offline stores in 30-50 cities by then.

Urban Ladder, which counts SAIF Partners, Kalaari Capital and SteadView as investors, is also willing to join hands with foreign companies if there is a strategic fit. The partner should bring to the table strengths in sourcing, category management and technology; a mere financial arrangement will not do, said Goel, who is quite well aware of the challenges domestic players will face once the Swedish furniture giant IKEA opens shop in India.

At the ground level, Urban Ladder is taking one city at a time and to an extent it has paid good dividends. The company expects revenues of around ₹15 crore plus every month from the Bengaluru market. Delhi is another market where it expects huge returns as customers there are slowly turning towards branded furniture. “Delhi has traditionally has been an unbranded furniture market but with GST kicking in, opportunities for the company have grown,” said Goel, who is credited with reviving popular children’s comic book Amar Chitra Katha during his stint with India Book House.

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