Online interior design startup Design Cafe has raised $25 million as part of its extended Series B round led by existing investors WestBridge Capital and joined by Sixth Sense Ventures. The Bengaluru-based startup’s early investor Fireside Ventures also participated in the round along with a few family offices.
The fresh funds came after a gap of 33 months for Design Cafe which raised $28.5 million in the first tranche of Series B in December 2018.
The company will be using the fresh round of capital to expand to 10 new Indian cities, said Design Cafe in a press release. Currently, it operates in Bengaluru, Mumbai and Hyderabad, with new centres being launched in Chennai and Thane.
As per the company’s regulatory filings, Design Cafe has approved the allotment of 12,713 Series B1 preference shares at an issue price of Rs 66,475.61 to raise Rs 84.51 crore or $11.5 million. Sixth Sense Ventures and WestBridge have put in most of the funds, investing Rs 43.3 crore and Rs 30.51 crore respectively.
The company may receive more money in this round.
According to Fintrackr’s estimates, Design Cafe has been valued at Rs 365-370 crore or $50 million. As per the valuation report submitted by the company, it was valued at Rs 286 crore or $40 million (pre-money) as of Jun 30, 2021.
Following this new allotment of shares, WestBridge has acquired an almost controlling stake in Design Cafe with 49.64% stake followed by Fireside and Sixth Sense Ventures which have 15.83% and 11.68% stake, respectively.
The collective stake of the company founders—Gita Ramanan and Shezaan Bhojani — has been diluted to 12.12%. This kind of dilution is unusual for a company at a Series B stage. That said, the company is also in its sixth year of operations.
Design Cafe offers an online customised design and decor solution to consumers which also include budget management, home cleaning among others. It’s worth mentioning that the company manufactures all their products in its Bengaluru-based factory.
According to the company, it is near break-even and targeting a gross annual order booking run rate of 600-700 crore within the next two years.
While Design Cafe has not filed its annual financial report for FY21, the company saw its revenue from operation grow by 64.1% from Rs 33.7 crore in FY19 to Rs 55.31 crore in FY20. Its annual losses blew up 4.2X to Rs 59.8 crore during the same period.