Omnichannel home interior and renovation platform HomeLane has grown its revenue by about 35% and crossed the Rs 570 crore mark in FY23. However, the Peak XV Partners-backed company could not rein in losses in the last fiscal year.
HomeLane’s revenue from operations surged to Rs 574 crore in FY23 from Rs 426 crore in FY22, according to its consolidated financial statements filed with the Registrar of Companies.
HomeLane provides interior solutions and claims to have over 1,400 design experts who service over 20,000 customers. Collection from these services was the sole source of income for a Bengaluru-based firm. The startup reportedly delivered services to 9,500 homes last year and handled 25 to 30 homes on a daily basis.
The cost of material consumed accounted for 55.5% of the total expenditure which grew by 26.9% to Rs 420 crore in FY23. Its employee benefit cost increased by 60.5% to Rs 191 crore in FY23. This cost also includes 8.94 crore as ESOP costs (non-cash).
Expenditure on advertising and promotion remained flat at Rs 71.3 crore in the previous fiscal year. The company added another Rs 9 crore and Rs 6 crore towards IT costs and legal and professional fees which pushed its overall cost by 30.1% to Rs 757 crore in FY23.
HomeLane somehow managed to control its expenditure in the last fiscal but its losses grew 15.1% to Rs 173 crore in FY23. Its ROCE and EBITDA margin worsened to -1108% and -26.07% respectively. On a unit level, the company spent Rs 1.32 to earn a unit of operating revenue in the last fiscal year.
Amid a tight funding environment, the company closed its bridge round of $9 million from existing investors in June this year. With this, the startup has raised $115 million to date. According to TheKredible, Accel is the largest external stakeholder in the firm with 17.43% of the stake followed by Peak XV (formerly Sequoia Capital) and IIFL, which hold 11.55% and 10.86% of the holding in the company.
Its major competitor Livspace is yet to file its financial statements for FY23. Livspace’s revenue from operations grew 54.9% to Rs 570 crore in FY22 while its losses soared 55.1% to Rs 645.2 crore in FY23.
The home interiors and renovation market is huge, as one would expect in India, and growing fast on the back of a booming real estate market. However, like most of the home market, competition is intense, especially from organised players or freelancers as one could call them. While the organised market offers access to builders who will seek large block deals for interiors sometimes, the larger market, of individual buyers seeking advice and execution, is a tough one to crack. Be it issues of marketing, conversions, or simply the time taken for a project to be completed, every step can be a challenge.
Much like another services company Urban Company, there is always the possibility of listed designers deciding to close a deal directly.
HomeLane has done its bit to showcase strengths, be it in the form of 10 year warranty, a fixed time to complete jobs, or the use of technology to preview possibilities. But the firm still requires a bigger market shift towards trusting large, organised players for numbers to go its way. The market beckons, but the road to success is not easy.