The Sleep Company, a direct-to-consumer mattress brand, has secured INR 184 crore ($22.1 million) in its Series C funding round, with participation from current investors Premji Invest and Fireside Ventures.
The funding will be utilized by the startup to enhance brand presence, expand its omnichannel reach, and drive product innovation.
It’s worth mentioning that The Sleep Company secured INR 177 crore ($21 million) in its previous Series B funding round last year, with Premji Invest taking the lead. The round also witnessed contributions from Alteria Capital and ongoing support from Fireside Venture.
“Our valuation has more than doubled since the last round, and since our launch in October 2019, we’ve achieved remarkable 3X year-on-year growth,” stated Priyanka Salot, co-founder of The Sleep Company.
Based in Mumbai, the brand competes in the fiercely competitive sleep solutions and mattress market in India, alongside rivals such as Wakefit, Sleepyhead, Sunday, and SleepyCat. In August 2022, the company expanded into offline retail by inaugurating exclusive stores in Bengaluru and Hyderabad.
The distinctive selling point of The Sleep Company revolves around its patented SmartGRID mattress technology. Since its introduction, the company has expanded its product offerings into categories such as work and gaming chairs. This diversification has led to the non-mattress segment contributing to 35% of the company’s total revenue.
At present, the startup operates 60 stores spread across 22 cities in India. Its goal is to expand this number to 100 stores by March 2024.
“We are technically opening one store every four days in the country. We want to keep the same momentum, and the same pace going forward. Over the next one year and four months, we will expect 200 outlets spanning 35-40 cities in India. Hence, a substantial chunk of fresh capital will be used there,” cofounder Harshil Salot said.
Presently, the key offline markets for the startup include Bengaluru, Hyderabad, Chennai, Mumbai, and Delhi-NCR.
Half of the startup’s revenue is attributed to offline channels. Direct-to-consumer (D2C) sales contribute 30% of the revenue, while the remaining 20% is generated through various marketplaces.
Last year, the direct-to-consumer (D2C) brand expanded into the markets of Japan and the UK. According to the founders, international markets currently contribute 7-10% of the total revenue. Their strategy involves increasing this percentage to 20% before embarking on aggressive expansion into new markets.
The Sleep Company has reached an Annual Recurring Revenue (ARR) of over INR 350 crore and aims to conclude the ongoing financial year with an ARR of INR 500 crore. Additionally, it is striving to achieve Earnings Before Interest, Depreciation, Taxes, and Amortization (EBIDTA) profitability by the next year.
