Lenskart.com, run by Noida-based Valyoo Technologies Pvt Ltd, is an e-commerce platform for spectacles and lenses. Last week, the company bagged $22 million in its Series C round of funding from TPG Capital, Hong Kong-based TR Capital and existing investor IDG Ventures that valued it at around $100 million.
Valyoo, which also operated Jewelskart.com, Bagskart.com and Watchkart.com, recently brought the curtain down on these businesses.
VCCircle spoke to Valyoo’s founder and CEO Peyush Bansal to know what led to the shutdown of these businesses, the firm’s future plans and more. Here are the edited excerpts:
Why did you decide to shut down the other three business units? Were they reporting lack of transactions or were the VCs not willing to back them?
Lack of funding was definitely not the reason for the shutdown. Indeed, eyewear business itself is huge and we are seeing massive opportunities in the space. The growth we are looking at from this segment is phenomenal. So, we are planning to spend more time and energy on this business.
How did your investors react to your decision to shut down these verticals?
It takes a lot of maturity to take decisions like this. However, given the huge growth opportunities in the eyewear domain, everybody agreed to close down other properties.
When did the closure happen? Were all the three properties shut together?
No. They were shut down over a period of time. We had informed our customers about the impending shutdown, and it happened over the last three months.
Why didn't you plan to sell them out instead?
We are not really losing anything by shutting them down. We want to focus all our energy on Lenskart and thus selling them out might lead to distraction. Though the business was doing good, we felt that there was a lot of opportunity in what we are doing currently.
Can you take us through the numbers that these verticals were reporting?
They are not there, so it doesn't matter. We were not focusing our energies on these portals for quite some time now.
How did you rope in PE firm TPG Capital which typically don't do VC deals? Who is joining the board from TPG?
Overall, it happened after they approached us last year. Our model is slightly different from the regular e-commerce model. It is quite a unique and a complex model as we do all the way from manufacturing to front-end. That was exciting for them and they approached us.
At that point, we were not looking for money particularly. We were not interested till the last moment because we did not want to raise a round at that time.
However, TPG has a very strong history of strategic investment and very strong capabilities of growing companies to the next level. That’s why we decided to get them on board.
Manas Tandon, director of TPG Growth, is joining the board of our company.
Why did Ronnie Screwvala, one of your existing investors, opted not to participate in this round?
It is not about whether he wanted to participate or not but it’s that we as a company did not want to raise so much of capital. We wanted to give the opportunity to TPG since they have a minimum ticket size. So there was not enough space to accommodate everybody.
Screwvala was interested, but we could not accommodate him. Besides, we did not want to raise more than what we needed.
Where will the capital raised be invested?
The funds will go into building the team and core technology platform, in addition to increase the efficiency of the eyewear making machines. A part of the capital will be used to expand our home eye check-up service.
What is the current staff strength at Valyoo?
At present, we have 150 employees. We want to hire more strategic people. It’s not really about volume, but quality. We would add lot many people in the technology space. That is the core area we are focusing on right now.
We are looking to get at least another 100 engineers in the next one year. Besides, we will be looking at some senior hiring. We will be looking at some strategic people to lead our key initiatives like home eye check-up, etc.
We are also planning to aggressively expand our home eye check-up service. We currently have around 100 eye technicians, and we are planning to grow it to at least 1,000 in the near future.
What is the size of the monthly transaction on your platform?
We are not disclosing any numbers right now. We generated Rs 100 crore in gross revenue in the last calendar year, and we are growing 15 per cent month on month.
What is your target for FY16?
We are targeting close to Rs 250 crore by March next year.
What innovations are you bringing to the platform?
We are coming up with a lot of innovation in the technology. We will introduce 3D virtual trials in the next six months. This will enable users to try out specs much more real than they do it today.
Which cities are you getting the maximum number of transactions from?
Delhi and Bangalore are two cities from where we are getting good business. But we are doing a lot of consumer engagement activities in tier 2 and 3 cities. We have opened stores in a lot of smaller cities, where people can go and experience our brand and place order online.
We are also doing local advertising in smaller cities. We will also launch home eye check-up services in these regions soon.
We will cover 40-50 cities by the end of this year.
(Edited by Joby Puthuparampil Johnson)