Wakefit is one of the few growth-stage startups that have managed to cross Rs 400 crore revenue mark within 5 years of its inception. The sleep solution cum furniture company has registered 2.07X growth in its operating revenue to Rs 408.59 crore in the last fiscal year from Rs 197.44 crore in FY20, Wakefit’s annual financial statements show.
Wakefit has made 94.74% of its income through the sale of manufactured mattresses, pillows and accessories which shot up 2.07X to Rs 387.1 crore in FY21 from Rs 187.16 crore in the preceding fiscal year (FY20).
Sale of traded goods, which includes pillow protector, neck pillow, study chair, cushion and comforter, has increased 55% to Rs 11.95 crore in FY21 from Rs 7.69 crore in FY20.
Revenue from the sale of services stood at Rs 4.51 crore during the last financial year which was nil in FY20. Sale of scrap also added a small portion to the company’s coffers in the fiscal year ending March 2021.
Keeping in line with the income, expenses of the company grew 2.47X to Rs 454.22 crore in FY21 as compared to Rs 184.22 crore in FY20.
As the revenue increased more than 2X, the major cost center for the mattress manufacturing company is cost of materials. It has constituted 54% of the total expenses during FY21. This cost grew 2.52X to Rs 245.23 crore in FY21 from Rs 97.32 crore in FY20.
Employee benefit expenses are the second major cost for Wakefit, accounting for 12.71% of the total cost in FY21. This expenditure grew 3.42X to Rs 57.75 crore in FY21 from Rs 16.88 crore in FY20. Out of total employee benefit, Rs 7.1 crore is spent on ESOPs-based payments.
Cost of customer acquisition has also increased substantially for the six-year-old startup and this is evident from its increased marketing and promotion costs. These costs grew 62.8% to Rs 43.13 crore in FY21 from Rs 26.48 crore in the preceding fiscal year.
Due to growth in scale, Wakefit’s commission on sales and warranty cost on claims grew 2.18X and 3.76X respectively to Rs 17.75 crore and Rs 22.22 crore in FY21 from Rs 8.14 crore and Rs 5.91 crore in FY20.
With the rise of 2.47X in its total expenses, the company has slipped into losses in FY21 from a profitable fiscal during FY20. Wakefit has booked a loss of Rs 37.06 crore in FY21 against profit of Rs 10.15 crore in FY20.
Almost all the cost centers of Wakefit have recorded a 2X growth, which pushed it into negative cash flow. It has recorded a negative cash flow of Rs 69.38 crore in FY21 from a positive cash flow of Rs 7 crore in FY20. On a unit level, the company spent Rs 1.11 to earn a single rupee in FY21.
Wakefit has demonstrated impressive growth in its revenue in FY21. The company has crossed Rs 400 crore in operating income with sound units economics and if we compare this with other startups of its age, it’s quite commendable. If it maintains this momentum, it will surprise no one to see Wakefit turn unicorn in the second half of the year, considering its last fundraise in November 2021 was done at a valuation of Rs 2800 crore. The only thing stopping it is the immense competition in the segment now, besides the legacy players that are also trying to up their game against the nimble new startups. They might call it the sleep business, but it’s anything but sleepy at Wakefit for the near future and beyond.