Mumbai-headquartered TrendSutra Platform Services Pvt. Ltd, which runs furniture e-tailer Pepperfry, said on Wednesday that it has raised Rs 250 crore ($38.4 million) in a fresh round of funding from asset management company State Street Global Advisors.
State Street Global Advisors is an arm of State Street Corporation, one of the worldâs largest investment management companies with $2.78 trillion in assets under management.
With this round of funding, Pepperfry has raised more than Rs 1,200 crore ($180 million) in capital since it began operations six years ago, the company said. It added that its next financial milestone would be an initial public offering (IPO), but did not mention a timeframe for that.
"Our investors are aligned with our strategy and value our execution capabilities," Ambareesh Murty, co-founder and chief executive of Pepperfry, told VCCircle. "The size of the round was determined by our cash requirement and we are inching closer to profitability.â
Pepperfry said its revenue has grown at a compound annual rate (CAGR) of over 83% in the five years. With this fresh investment, it added, the company has enough capital available to accelerate past the break-even point and become a profitable business over the next 12-18 months.
The fresh funds will be deployed to expand Pepperfryâs offline stores called "Experience Centers" in smaller tier 2 cities, Murty said.
He added that the company will also invest in developing augmented reality and virtual reality for virtual touch and feel.
Anandh Hari, managing director of private equity at State Street Global Advisors, said Indiaâs large furniture and dÃ©cor market is ripe for disruption.
âWe are excited to enter the Indian e-commerce market through our investment in Pepperfry," he said.
This development comes a week after Pepperfry's biggest rival, Urban Ladder, raised Rs 77.43 crore ($11.87 million) in a fresh round of funding from existing investors.
The startup was founded in January 2012 by Ambareesh Murty and Ashish Shah. It started with categories such as home, lifestyle and fashion, and now specialises in furniture and home products on its managed marketplace platform.
Pepperfry now generates 50% of its sales from its private label brands.
Last year, Pepperfry had raised $31.3 million from existing investors including Goldman Sachs Group, Zodius Technology Fund, Norwest Venture Partners and Bertelsmann India Investments.
In mid-2015, the company had secured $100 million in funding from Goldman Sachs Group Inc and Zodius Technology Fund with its existing investors Norwest Venture Partners and Bertelsmann India Investments also participating in the round.
Pepperfry managed to narrow its losses in the financial year 2016-17 even as revenue grew 25.3%.
The company reported a loss of Rs 128.9 crore for 2016-16 compared to Rs 154.9 crore in the previous fiscal. Revenue from operations grew to Rs 114.9 crore in 2016-17, up from Rs 91.5 crore in 2015-16.
Murty had told VCCircle in December that the companyâs omni-channel strategy had paid off.
âWe have offline presence in more than 10 cities, and that has enabled us to grow the business without making superior investments. We have tightly controlled all expenses. As our business has grown, the efficiencies of scale have come through,â Murty had said.