Wakefit posts Rs 1,274 Cr revenue in FY25; losses widen

Home and sleep solutions brand Wakefit recorded nearly 30% year-on-year growth during the fiscal year ending March 2025. However, its net losses doubled in the same period even as it gears up for its IPO.

Wakefit’s revenue from operations rose to Rs 1,274 crore in FY25 from Rs 986 crore in FY24, according to its annual financial statements filed with the Registrar of Companies (RoC).

Founded in 2016, Wakefit operates as a direct-to-consumer (D2C) brand offering sleep and home solutions, including mattresses, pillows, furniture, and home improvement products. These are sold through its website, offline stores, and third-party marketplaces. Revenue from product sales forms the company’s sole source of operating income.

The firm also earned Rs 31 crore from interest on deposits and profit from the sale of investments, taking its total income to Rs 1,305 crore in FY25, up from Rs 1,017 crore in FY24.

The cost of materials consumed accounted for 43% of total expenses, which increased to Rs 573 crore in FY25. Employee benefit expenses grew 23% to Rs 166 crore, while legal, advertising, IT, postage, and other overheads pushed total expenditure up 29.8% to Rs 1,340 crore.

The increase in advertising, postage, and employee costs widened Wakefit’s net loss to Rs 35 crore, against Rs 15 crore in FY24. Despite this, the company remained EBITDA positive at Rs 59.5 crore during the year. Its ROCE and EBITDA margin stood at 4.67% and -5%, respectively.

By the end of FY25, Wakefit’s total current assets were valued at Rs 537 crore, while it spent Rs 1.05 to earn a rupee of operating revenue.

Last month, the company received SEBI approval for its IPO, which includes a fresh equity issue of Rs 468.2 crore and an offer for sale (OFS) of 5.84 crore shares by promoters and existing investors. Founders Ankit Garg and Chaitanya Ramalingegowda, along with investors such as Peak XV, Verlinvest, Investcorp, Redwood Trust, SAI Global, and Paramark, are expected to partially offload their holdings through the public issue.

While the benefits of being an early mover in the online space for ‘sleep solutions’ and more have long dissipated for Wakefit, the firm has done well to expand without quite tripping over in a treacherous market.  The higher losses are probably linked to the move into offline stores, but the firm has controlled expenses well, even as it sustains growth at a healthy clip. The new categories it has added also seem to be adding value, and from anecdotal evidence at least, the portfolio offers a quality option for many consumers. One only hopes it doesn’t quite treat public markets like VCs, and offer a price that delivers value to new investors as well, unlike some of the recent startups that have simply spread out the risk to a wider set of investors while benefiting their earlier backers and founders. Offer for sale, a new lexicon that has become common for the markets over the past two years might yet become a byword for ‘overpriced’, if public offerings continue  at the current pace and structures.