Softbank invests $231 mn in Lenskart at $1.5 bn valuation

SoftBank has finally made its first new investment this year. The much-awaited capital has come for hybrid eyewear retailer Lenskart where the Faridabad-based company has received $231 million from Softbank Vision Fund's investment vehicle — SVF II Lightbulb. It values the Peyush Bansal-led firm at around $1.5 billion.

The company was in talks with the Masayoshi Son-led group for the last seven months.

This comes at a time when SoftBank has been asking its current portfolio companies to cut costs while it had paused all new investments.

According to regulatory filings with the MCA, Lenskart has issued 22,976,465 Series G compulsorily convertible cumulative preference shares to SoftBank Vision Fund II Lightbulb (Cayman) at a price of Rs 713.95 per share. The total consideration for this subscription amounts to Rs 1,645 crore ($231 million) for a 20.14% stake.

As part of this transaction, Softbank will acquire the firm's stake from Lenskart existing investors.

Just three months ago, the company had raised Rs 392 crore from Kedaara Capital in its Series F round. That round also saw a secondary transaction where the Mumbai-based private equity firm had bought shares of existing investors such as Chiratae and Premji Invest.

The new infusion comes at a time when Lenskart is planning to scale operations to more locations in small towns in India and is also eyeing overseas expansion. The company recently forayed into Singapore.

Over the next five years, Lenskart has a target to set up 2,000 stores in India.

One of the leading players in vertical e-commerce in terms of funding, Lenskart has managed to improve its unit economics and is likely to taste profitability in the next fiscal.

For context, it recorded a 63.2% surge in revenue to Rs 474.31 crore in FY19. During the financial year, it also controlled losses by a whopping 73.2% to 31.6 crore.

On the back of production in the domestic market, Lenskart has been able to improve its margins significantly in the past few years. Previously, it was done through a strategic partnership with manufacturers in China for sourcing most of its stock in trade.

Hat tip: paper.vc