Sleepycat, which makes and sells mattresses to consumers through online channels, has raised Rs 11 crore ($1.56 million) in its Series A funding round led by consumer-focused venture capital firm DSG Consumer Partners and the family office of Marico Group’s Harsh Mariwala, Sharrp Ventures.
Early-stage investor Gemba Capital and some angel investors also participated in the company's first external round of funding, Sleepycat said in a statement.
The company, which is operated by Sleep Management Pvt. Ltd, will use the funds to invest in technology, strengthen its team apart from developing new products and enhance marketing division.
Sleepycat, which was founded in August 2017 by an alumnus of Indiana University, Kabir Siddiq, has a manufacturing plant in Mumbai. It has another factory in Kolkata, which is used for packaging and warehousing purposes.
Siddiq, who previously worked with Deutsche Bank, told VCCircle that the Mumbai plant has the capacity to make 150 mattresses per day. The company is currently selling 1500 mattresses per month and the sales could touch 3,000-4,000 in the festive season.
The company's product portfolio includes variety of mattresses such as memory foam, latex foam, and waterproof. It delivers mattresses in compact boxes which makes logistics efficient. The products are currently sold through the company's own website and Amazon, and it plans to sell through other channels such as Flipkart and FirstCry.
Deepak Shahdadpuri, managing director at DSG Consumer Partners, said that Sleepycat simplifies choice for customers at the time of purchase and employs lean distribution channels that enable attractive pricing and offers a 30-day trial period.
“The company has exciting new sleep solutions products in the pipeline. It is a rare specimen for a startup in being profitable at the time of our investment,” he added.
Hariharan Premkumar of DSG Consumer Partners and Chaitanya Deshpande of Sharrp Ventures will join the board of directors of Sleepycat.
The mattress market is highly unorganised in India but has established players such as Duroflex, Sleepwell mattress maker Sheela Foam Ltd and Kurl-On.
These companies are seeking a pie of India’s mattress industry, which is estimated to grow at an annualised pace of 8-10% to Rs 13,000-14,000 crore by 2020-21 from Rs 8,500-9,000 crore in 2015-16, a recent investor presentation by Sheela Foam shows.
Late last year, mattress maker Wakefit Innovations Pvt. Ltd raised Rs 65 crore in a Series A round of funding from venture capital firm Sequoia Capital.
The investment in Sleepycat is 45th by DSG Consumer Partners, and the third investment from its latest fund, the venture capital firm said.
DSG Consumer Partners marked the final close of its third fund at $65 million (Rs 465 crore) last month, overshooting the target of $50 million.
The fund will make seed and Series A bets on around 20 consumer brands in India and Southeast Asia.
DSG Consumer Partners' investments include hospitality chain Oyo, from which it has exited, and yogurt maker Epigamia.
Sharrp Ventures, which is focussed on investments in equities in India, also invests in the early and growth stage companies in the unlisted segment. It is sector agnostic with a bias on consumer and consumption related companies, the statement said.