Sleep and home solutions company Wakefit maintained its growth trajectory and surpassed Rs 800 crore in revenue during the fiscal year ending March 2023. However, the Peak XV Partners (formerly Sequoia Capital)-backed firm’s losses have outpaced its revenue growth and neared Rs 150 crore in FY23.
Wakefit’s revenue from operations grew by 28.4% to Rs 813 crore in the last fiscal year (FY23) from Rs 633 crore in FY22, the company’s annual financial statement sourced from the Registrar of Companies (RoC) shows.
The six-year-old company manufactures and sells mattresses, pillows, accessories, and furniture from the website and marketplace. The sale of sleep solutions including mattresses and pillows formed 75% of the total revenue. This income surged 23.4% to Rs 606 crore in FY22. The rest of the collections come from the sale of furniture, decor, dinnerware, and storage.
See TheKredible for complete revenue breakdown.
The cost of procurement and manufacturing of home solutions was the largest cost center for Wakefit, accounting for 48% of the total spends. In line with revenue, this cost increased by 24.9% to Rs 466 crore in FY23.
Other major overheads including employee benefit, transportation-freight, legal, advertising-promotional costs catalyzed its expenditure to the tune of 29.8% and stood at Rs 966 crore in FY23 as compared to Rs 744 crore in FY22.
Check TheKredible for the detailed expense breakup.
- Cost of material consumed
- Employee benefit expense
- Cost transportation
- Legal professional charges
- Advertising promotional expenses
When it comes to bottomline, Wakefit’s losses jumped by 36.4% to Rs 146 crore in FY23 from Rs 107 crore in FY22. Its ROCE and EBITDA margin stood at -21% and -10% respectively. On a unit level, it spent Rs 1.19 to earn a rupee.
At the end of FY23, Wakefit had a cash reserve of Rs 174 crore while the other current assets including receivables and investments stood at Rs 212 crore.
|Expense/Rupee of ops revenue
The over $2.5 billion mattress and related markets in India have seen the kind of excitement in recent months that is guaranteed to lead to sleep deprivation for many in the sector. From Sheela Foam’s acquisition of Kurl On followed by the Rs 300 crore bet on furniture rental firm Furlenco, to Wakefit’s own aggressive moves to grab share, even as other incumbents and newcomers spruce up for the changing market, it’s all happening after seemingly decades of soporific growth. Wakefit will probably consider FY23 numbers a little behind its own expectations, going by the aggressive projections made last year.
Even as it beats industry growth rates of 10% or so, it is increasingly, the only major player at scale that is making losses. While its investors seem fine with that for now, they will know that profitability is hardly an arms length away, especially when or if biggies like IKEA, or even Amazon drop their own brands into the mix. That’s no longer speculation, and increasingly, the issues remains of when, not if. For Wakefit, that will mean doubling down on what it has done well so far, building a brand that is seen as modern, responsive and capable of being used across more segments beyond mattresses and pillows successfully. Can that happen without lots of growth capital? The jury is out on that.