The Sleep Company raises ₹184 crore in Series C funding

MUMBAI : The Sleep Company, an omnichannel leader in the comfort-tech business, has raised ₹184 crore in Series C from existing investors Premji Invest and Fireside Ventures. The company, which provides both sleep and seating technology, will use the funding to grow its offline presence, expand in other regions and widen its product basket, the founders said in an interview.

This is the second funding round in 12 months from the same set of investors. The company raised ₹174 crore in November 2022 and it has grown 2.6x in revenue since then, the founders said. Before that, it had raised ₹13.4 crore in pre-Series A. Through the current funding round, the company is also looking to buy back employee stock options to offer them some liquidity.

“Our aim is to be across 30 cities with almost 100 stores by end of the current financial year and another 100 stores by FY 2025,” said Priyanka Salot, cofounder, The Sleep Company. According to her, the company’s valuation has grown two-fold since the last funding round.

With this omnichannel approach, the company now earns around 50% of its revenue from offline channels while the rest comes from online.

The company has reached an annualized revenue run rate of around ₹350 crore as of September 2023 and is expected to close the current financial year at ₹500 crore in ARR, Harshil Salot, another cofounder, said.

The company, co-founded in 2019 by the husband-wife team of Harshil and Priyanka Salot, achieved contributory margin profitability and is looking to achieve Ebitda (earnings before interest, taxes, depreciation and amortization) profitability by FY25.

The company is aiming for a ₹1,000 crore revenue run rate over the next two years, according to Harshil Salot.

The Sleep Company produces patented SmartGrid mattresses and has also diversified into seating comfort solutions. The direct-to-consumer company claims to have around 200,000 customers.

The company brought its burn rate down and is currently gearing for expanding its presence globally. It is present in the UK and Japan and is aiming for pan-Europe expansion in the near term. Currently around 10% of the company’s revenue come from outside of India.

“The company’s remarkable journey since 2019, marked by aggressive omnichannel growth and strong unit economics, has solidified our confidence in their capabilities. In line with our investment thesis of omnichannel across consumer brands, we are reaffirming our support to The Sleep Company by doubling down on our initial investment,” said Varun Khandelwal, Principal of Investments at Premji Invest.

As on date, the company is 54% owned by the founders while the investors together hold around 46% stake.

“We are thrilled to see their exceptional growth trajectory, their drive towards a powerful omnichannel strategy and their consistent profitability. This all-round performance reinforced our confidence in them,” said Dipanjan Basu, Co-Founder & Partner at Fireside Ventures.

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